Why the Best Builders Think Like Manufacturers (Ep 295)

Want to build a better business? The next step is to create a system!

Today, Max talks about how to shift your mindset from running your business like a carpenter to running it like a true business owner.

Drawing inspiration from what Henry Ford did with his business, Max explores how those same principles can be applied to create more efficient, scalable, and successful companies.

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

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Transcript

SPEAKER_00 0:00

Guys and gals, you can build a house but you struggle to build a business. On today's episode, I'm going to talk to you how I adopt a production line mentality to oversee operations within my business to make more profit, have a better lifestyle. Enjoy. How old are you going to be before you start to experience life like you want it? I want to tell you right now, whether you like it or not, there is a better way to do business. Hi everyone, welcome uh to the Business for Builders Podcast. My name is Max, I'm your host. Welcome to you if you're in uh podcast land or if you're joining us from YouTube land. Uh great to have you along. As usual, want to uh make sure we can get some value into your ears, into your head, and uh hopefully some uh more cash into your bank account. That'd be cool, more profit, better lifestyle, all that kind of stuff. Right, um, on today's episode, it's um, you know, as I do business as a builder, general contractor, um, as I coach builders, general contractors, you know, we're all about problem solving. Whether I'm over there as a builder dealing with issues like you do, um, or whether I'm in a support role, you know, as an advisor to builders and general contractors. Um, it's always it's part of my DNA. What I help my EBA or lead business advisory coaching clients with is probably the same as or similar to what I deal with every day in my own business. So over here, me and Jed are all about solutions and getting shit fixed and getting it done, making more money. When I'm with EBA clients, exactly the same thing. I am not there to uh waste anybody's time or money, including my my own. And so what we want to do is we're gonna have maximum impact. And so, out of the operation, you know, I know there's business coaches out there and that's all they do and bless their hearts. But, you know, for me as an operator, what makes me the more challenge I have in my day job as a builder, the better business coach I become. Because I know that if I can refine that or I can analyse that situation and I come up with a remedy or a solution, it's only a matter of time before one of my EBA clients comes across something similar and I can say, Hey, I know you feel I felt the same way. This is what I did to remedy that. This is what I did to get through that, you know. And I tell you what, that's pretty powerful. And this is what I will do because clearly I'm not on the tools. Well, I was I was on the tools a couple of days the week before last. Um, but obviously they don't rely and I did that because I kind of got greedy and started a job too early. So someone needed to get that frame ready for uh for drywall. So I uh backed my truck up and did a bit of work. Funny that I should have sent you guys a bit of a selfie uh, yeah. But you know, it's all about making your business better, continuous improvement. We're gonna talk about that today, right? So, what I think about my mindset as a builder is I want my building company to operate like it was a massive auto manufacturing plant, right? And that just doesn't mean where they start to put the car together, it's all about before that even happens, right? Branding, you know, sales, all that sort of stuff. And so what I'm gonna quickly cover off is I'm gonna look at some similarities between what Henry Ford did as an automotive sort of juggernaut, or someone who was a pioneer in that respect, and now today it does what it does, and and what you know, how we can apply some of that thought thought processes. And so I think the first thing I need to do to check off with you, if you're sitting there in your brand new or you're sitting there and you're 100 years old, somewhere in between, and you call yourself a builder or general contractor, what I need you to understand is that you've got to become more systematic and clinical in your approach to starting, running, growing a business. That's the first thing. Okay, and and I guess if you make it through to the back end of this episode, you're legitimately someone that says, I want to build a better business. Okay. So I guess when we're talking about point number one, the design plan and price process, if I was going to look at the similarities, what it would be is that it would be equivalent to auto, what have I got here? Automotive engineering. Right? So obviously, whenever you and I know nothing about automotive engineering, so um, but I would understand that there's got to be what what what Henry Ford did back in the the first motor vehicle he ever produced, engineering automotively has come a very long way, right? And so, you know, for us, um, Ford doesn't start building, say, um, a vehicle before the design and engineering are complete. So I've seen, I've watched enough, you know, Top Gear and you know, those types of shows where they maybe show you, talk about clay models and things like that. And so there's a lot of that um, you know, the design plan and price and the automotive engineering that goes into that. So again, everything that I'm gonna list here is an introduction and it's a little bit of a prompt, and it's to start getting you into the habit of thinking like a business owner, not as a carpenter. Right? I'm a carpenter by trade, is what I did to feed my kids for a quarter of a century. I get it. But I think if we want to then step out of being a carpenter like I did and get a builder's license like I did and become a builder like I did, you know, to do it better, I think I should have taken a little bit different of a mental approach. Okay, so I'm I'm begging you today to just tone it down a bit and go, okay, there's clearly a lot of stuff over here in the business sector that I don't know about because I was never taught it. So just be patient with yourself, allow it to come to you a little bit, but always be pushing the envelope around your learning. The more you learn, the more you earn. You've heard me say that a dozen times. So they don't start to build the vehicle until the design and engineering is sorted out. Uh, builders, you and me, we shouldn't start construction before sufficient planning, selections, and pricing incomplete. Okay, so this is what we have to do. We've got to be very proactive and we've got to be very intentional about what we do in our business and and how we do it, because we're hoping that if we are doing it well and more efficiently, we can expedite money love speed. Okay, if I can get a lead, if I can get a lead from a first phone call to a contract in three months, and it's the same job, is that is that better or worse than getting a phone call and a lead to a contract in in nine months? Well, of course it is, because if you can get it to contract in three, that's it you're bringing forward the payments. So it's better for the business, but you want to make sure your pricing model's right, okay? So everything has got to be thought about. Let's just say that. Better planning creates better outcomes and fewer surprises. Nobody likes surprises unless it's their birthday, correct? Right. So what we need to be across is everything in our business as far as operations. I guarantee you, Henry Ford didn't just get bogged down in the design of a vehicle. He was probably the first guy in automotive engineering or automotive production that got the whole production line thing happening. And this is where I got thinking about it, you know. And so what I'm going to cover off, you know, in the rest of this little chit-chat we're having here is it wouldn't it be remarkable if I could build houses now? I'm talking about on site, right? So it's not possible because we can't bring that back in. I know some guys are doing modular homes and things like that, and I guarantee you they're very systemized in what they do. But because we've got this remoteness going on, whereas you're on site, it's very hard to get that in your mindset and change our view of how we run our business. So whether it's out in the field, like at an address out of a homeowner's location, or whether it's in a warehouse, our approach should be the same or similar too. Right? So we need to start thinking about all of the different phases of play, right from branding and marketing right through to post-construction, you know, customer service, right? Um number two, the construction phase, which is equivalent to manufacture, right? So what's our what's our uh our delivery method like? Like how do we operate? You know, it's funny because I get what let's say I've got one trade or a carpenter in my system guaranteed that if he's if he's ever come to me and he's sort of going to do some work, there's always a PO that goes out. So if I go into that carpenter's vendor account in my job tread, it'll tell me all of the POs that I've issued to that guy, all of the bills that have been created, and inside that bit it'll tell me whether I've paid that guy or not, and when did I do it? Because it's all got the notations down there. Now that's nice, but does it take time? Absolutely. Does Jed want to do that? Absolutely not. That's my job. Right? And so, you know, I I think that we've got to be understanding around our approach to say manufacturing, it includes things like purchase tours. Max, why do I want to do that? The guy does gives me a quote, he does the job, and I give him a check. Well, what happens is it gets lost in the paperwork, it doesn't get consolidated in one area, so you're not building that catalogue of quotes that you can refer back to quickly. Okay, it's it's all about improvement. That's that you're gonna talk to the bottom end, you know, continuous improvement is our competitive advantage because it's hard, it's not convenient, it's not easy, it hurts my brain. But again, when you start pushing the weight, over time your muscles will get bigger and you can handle it better. Okay, auto manufacturers, follow, listen to this repeatable processes and quality standards, repeatable processes. See, if your guys are dictating to you how you run your building company, that is the tail wagging the dog, and it is not repeatable because every time the wind changes, they might have a change of heart. Now they're dictating terms to you. And if you've got that across half a dozen trades, you're going out of your mind and you're not running a business, the business is running you. Great builders should strive for consistency, high levels of communication, and process-driven delivery. Process-driven. This is how we do it. Right now, Jed's got an issue with a painter who told us one thing, oh, these are my three stages, and we're like, great, sounds like he's on point. Well, obviously, shit went awry with him and his whole operation, and now we're just getting dragged through the mud. And now Jed and I have to be very uh, what's the word, diplomatic, but uh, you know, we're not sure of the future of that trade, you know, with us going forward with now other projects because we don't like the double standards. The mouth says this, the actions map to a different direction. That does not suit us, and uh, you know, I've uh I've had to let more than one guy go mid-project. So uh right, great builders. So we strive for the consistency. Um, the systems that we create reduce mistakes and improve profitability. So if you go, Max, I want more profitability, and I'm like, well, tell me about your systems, and tell me about how many mistakes happened in the last 60 days that cost you money. Because what I'll find is if there's mistakes that have cost you money, a lot of money, then there's there's obviously areas within your business that are not systemized well enough. Uh, what was I saying? Yeah, there was, I just had a thought. So a real, a real, a real life example, and I'll get to that. But guys, um, you know, I think as I build my business, and admittedly, me and Jed have only been at this two years, and you know, we're in excess of 1.5 for this year, um, you know, there's there's always things, there's a ha moments, you know, where I look at it and go, all right, that was an oversight. I assumed that he would get it. Ha, yeah, here's one. Okay, so Jed texts me on Sunday because we had cleaners in on the weekend, and he was telling me that on Saturday that there was there was some cleaners in the project, in in cleaning up this project for clients are going to arrive, you know, two days later. And he said, Um, one of the cleaners used the facilities, and he said it was so bad. And it's just like I had to send a specific text to the boss man cleaner to go, for you know, professionally, of course, I said, under no circumstances are any trades, including cleaners, to be using the facilities in the house, they are for the client. There is a porta potty out the front. Now, he then responded and said, Well, next time you've got to give me guidelines. And everything in me just went batshit crazy. I wanted to just respond a certain way, and I I don't think that I ended up responding to that message because it was just, it was just, it wasn't worth it. But one would assume that if there's a porta potty out front, you don't get to use the facilities in the house. The clients paid for a new toilet, don't you go shitting in it? Like, you know, everyone knows that, but clearly the cleaners don't. So, and maybe they're cleaning it, they think they've got luxury, you know, uh the choice. But, you know, guys, I think we've just got to um uh take responsibility for stuff that happens, and next time I will. And then the next cleaner I get in will probably say, Oh, yeah, we never do that. If there's a port-a potty on site, we use it. I'm like, okay. So, you know, there's that kind of you've got to close the loop on a lot of this, and guys, never be backwards in reaffirming to a trade or somebody or vendor about something they think you think they might already know. And if they come back in and say, Yeah, Max, that would be typical procedure for me. Like, great, I just wanted to make sure. You are the boss, you are the builder, you take ultimate, uh, all you take responsibility, you are responsible, and therefore, to be competent or viewed to be confident, you must you must take actions that are going to guarantee as best you can that you will be deemed as a reliable and competent builder. Sometimes that means telling guys and gals things twice trades. Okay, you are the boss man, you've got to really handle it with grace, but with firmness and courtesy at the same time, okay? Right, so uh number three there, post-construction phase. So we're talking about after sales, right? We know that. What do you do for after sales? After sales service. Now, I talk about after sales service right at the point, right up to the front end when I'm delivering what we call an estimated price range document. So we we make it, it's very uh it's outlined. There's a 12-month workmanship guarantee. All of the manufacturers hold their own warranties, which we we don't back those up, but we will facilitate communication because of the product that we supplied, and we can help you with that communication and help you get that sorted. Okay. I'm not going to charge them for doing some legwork, right? But I'm ultimately not responsible if that dishwasher shits the bed. Okay, that's on the manufacturer. Okay, so uh the customer experience doesn't end when the keys are handed over. We all kind of assume that we know that. However, the challenge is we don't give that the attention when if if and when it came in, we don't give that the same level of attention that we do to a new lead when you actually should. Because they've maybe had a good experience, and if you let them down in the in the in the uh post-construction, after sales service area, that can kind of taint the great experience that they've had because they were like, Well, he he told me that he's got a good warranty. He, whilst he was making money, he was good at service, but his after-sale service is pretty shitty. Guys, you need to start well, finish strong until you hit that 12-month or that, you know, wherever you are, two, five, 10-year warranty period, you have to operate at the highest level. Okay, start well, finish strong. Warranty communication and client care, strengthen your brand. Like your ability to handle things where there's, you know, without strings attached, where there's no payment coming back, where there's nothing that's you know really gonna benefit you in the here and now, you've got to start thinking reputation-wise. Okay, you've got to start thinking what is you've got to start thinking three-dimensionally. I think a lot of builders they get caught up in the just one dimensional, got to make money, got to have a good profit margin so I can go camping and buy a new truck and whatever. Guys, we've we're going to be. I'm already thinking generationally. I'm 53, I don't plan on going anywhere anytime soon, but we've got two families in the business now. Um, there's two kids over there, I've got six kids over here. They are going to essentially inherit the business if they so if they so choose. So our goal is to make the business operate independently. Like Jed and I want to master the art of running a building company, so it can from today onwards, it can be a generational um, you know, uh business that does get handed down from us to our kids and to their kids. And that's a great legacy. And I that motivates me a lot, you know, because then my great-grandkids, when I'm not on this earth anymore, they can circle back to good old the YouTube's and watch old great-granddad Maxi just parrot on about how to build a big business, you know, and they know that this was the origin of it all. So we're sort of recording it on the fly, you're right. Okay, um, happy clients become repeat customers and referral sources. I think I talked to I talked a little bit about a couple of weeks ago about the the re the referrals that you get are a cherry on top. Guys, if you want more referrals, treat your clients with the highest level of respect in the in the uh you know the after sales part of it, post-construction, because it it helps really uh really wrap up the whole experience and put a bow on it when clients go great in the f in the first part in the sales, love the design aspect of how he carried me through that. The construction phase just went like clockwork, and then we had a few little niggling bits afterwards, you know, a couple of months down the road, no problem to deal with. Everything as far as dealing with Max and Jed was just on point. Now we get a referral. Now I'm not competing on price, okay? Because new customers want the experience of my past customers. Is that experience pre-construction, during construction, post-construction? Is all of it A plus, A plus, A? Or is it kind of like he was mediocre B at the beginning, good in construction A, after sales service was a C. Guys, we've got to keep our grades up. Okay, so what's this number one here? Mindset. We've got to think. So we're not just builders, we've got to think like business builders. So this is where, you know, I think the previous episode we talked a little bit about, you know, how we approach, you know, what's our approach toward the business, like our mental attitude. You know, if you've got this, she'll be right, mate. I know everything. And I know most guys and girls don't have that, but you've got to be careful because the this the teacher will appear when the student's ready. So you will only be prepared to learn what you think is important to you in the future of your business. There's nothing I can say. I can try and bring some awareness, but we may never ever move, well, we may not move to education immediately because you're like, I don't need that, don't need to know about that. And there's still things that I do, though I brush it off, I go, I'm not interested in that. But then over time, I might go. I recall an email being sent to me, and I do file a lot of these, you know, a lot of stuff that I think will be relevant, just not now. So it's not a no, it's just not now. Okay, because remember, your capacity, you might be in a stage where you've actually got to pump the brakes on the business development side, and you've got to figure out and clean house a little bit so that you set the foundation to move the business forward. So a step back before you start moving forward again. Not a bad plan. So Henry Ford's legacy wasn't the automobile, it was the process. What do you think? I'm standing here talking. I'm not talking about Ford motor cars. Today they all seem like they're friggin' plastic anyway. So I don't know what's going on. But you know what we're what we're talking about today is is the development process of the business, the production line, everything they did around a brand, right? Okay, the greatest value in your company may be the systems you build, not the projects you complete. You know it's funny. When I'm talking to anybody these days, I often say to them, look, you know, what you want is a job done well. Of course, I want to do a job well and I want to make you happy. Okay, you want to get as much as you can, okay, for the dollar that you spend, and I want to try and maximize the profitability to uh keep the company going. So I've got two masters, the homeowner, okay, and the business. Right? And I but I say to people, I say, but look, we want to give, we want to turn you into a raving fan. Okay, we're not here to retire on your project or the finances we receive from your project. Okay, so it's just it's another job where our primary focus is actually making you happy without losing bucket loads of money. We want to do that, so we've got to balance this, so it's a fine line, right? And so that's how we make people feel. They go, okay, fair's fair. And most people are they they just are very standoffish when you're talking too much of a big game, and you really don't convey to them the mechanics of what it is that you you why you do what you do, which I tell you is very hard for me to even teach that because it's a cycle, it's when I'm dealing with a client, I'm a counterpuncher. I'm I'm saying something, I watch how they react, and then I will just return serve with something that's very appropriate, that really picks up on the psychology and the the demeanor and the in and the body language of that individual. Um, yeah, that's a little bit of a developed craft over time. Um sustainable growth comes from improving the business behind the construction. And I really think that that's probably what separates good businesses from great businesses. Guys that are very, you know, consumer-centric, guys that are very uh, you know, you know, looking at the business and where can we iron out some of these wrinkles? Where can we make things better? Right, so what have we got here? The last one. What's your competitive advantage? Continuous improvement. So when old uh Henry Ford developed the Model T or the Model A, I can't remember which would come first, but whatever. Um, you know, the motor cars that we have today, you know, if he produced the first SG. Well then the SUVs we've got today, the Ford Expedition, it's it's a it's a magnificent piece of machinery just for a you know uh a grocery getter, right? I mean my cabinet maker drives a couple of year old Expedition. It's it's a beautiful vehicle. Leather interior, the whole nine yards. Um even my old girl, 2025, you know, the the technology that's wrapped up into that vehicle is uh yeah, it's pretty it's pretty amazing. So what was happening was their competitive advantage was making the product better, but behind the product was the development process, the manufacture process, the sales part of it, the after-sales service. Like everything that they were doing was right, who can improve continuously the best? They always became, you know, the the front runners in that competition, you know, whether it's Ford, Chev, Dodge, Toyota, the big players, right? So it's all around getting, you know, getting the nose out in front because the competition is so tied close together, there's no massive standout. So if you're going to fall back into oblivion as a builder and get disillusioned because you can't keep up, it'll have something to do with your lack of understanding around I've got to get better. If I and for me to get better, it means I'm open-minded as to what our business is doing well and what's not doing so well. Where do we need to start troubleshooting? And that's what you are. You're a troubleshooter, you're a problem solver, you're a creator. Every completed project provides lessons and data, and that's what Jed and I will sit down and do. We will just not have a specific agenda, but we will have on my iPad, we'll have Job Tread opened up, and we'll just go through all of the POs. I mean, there's, I don't know, over 440 now, you know. Um, and it will just go through the POs and we'll just talk, that'll be there'll be prompts that'll be like, right, would we use that person again, that company again? Yes or no? Okay, so what do they do? Well do they do not so well? Where do we let them down? Where do they let us down? Like it it's it's gonna be a couple of hours of a lunchtime, probably, you know, on a Sunday afternoon, just where there's no pressure, no calls, no interruptions, just kind of getting the job done. And it's where we can really document and I guess get out on the table where are the areas that we need to improve on. And that's not something we just do once, we'll do it on the next job and the next job and the next job. And that's what's going to get us into a polished, you know, uh setup whereby we are able to execute in the pre-construction, during construction, and post-construction areas at the highest level. Small improvements, compound over time. It's funny, you know. We you know, we've just uh we just picked up a dump trailer yesterday, or excuse me, last week, whatever it was. I obviously automatically I got that sign written. Um literally, I got the decals measured up the same on the way back from the trailer place and uh got them installed, you know, a day later. If you want to check that out, go across to Business for Builders uh on Facebook and um and you'll be able to see that there as well. Uh or even if you're in the private group there, uh the Business for Builders uh VIP, it's in there as well. But um, you know, it's those kinds of little things whereby, you know, as I'm driving around, people are noticing the brand, you know, and it's like on the back of my sides of my side windows of my truck, you'll see that in the photographs. It says thinking about renovating. And so what I'm doing, and what I'm thinking is I'm driving down the road, the truck needs a bit of a wash, actually, but is that you know, even even one of the advertisers in town said, I saw I saw you driving down Main Street, and the green stripe on black looks really sharp, you know, and so with getting that kind of feedback, why would I don't necessarily need to put decles on a dump trailer, but Jed's truck's not wrapped yet. He's got a bit of a fender bender up the back end, and we've got to get fixed before we can do that. But if he's towing that dump trailer, it's got the branding on. Great. You know, better than having a dump trailer with no branding on it. And it's all of these little things that you just keep chipping away, keep chipping away, small improvements compound over time. Um, the builders who improve their processes eventually outperform those who simply work harder. Guys, I'm I was raised in a household where working hard was just mandatory, right? My man grew up on 3,000 acres in in southwestern Australia in a little town called Esperance. And, you know, he brought that into the suburbs and just horse whipped us kids to have a good, you know, to the point where it was like sometimes challenging to deal with that, right? But I think the work ethic is definitely ingrained. I've not really met one lazy builder. I think we're all very motivated to get the job done. I get that. But unfortunately, hard work alone is not going to put it together that's going to give you the finished product as a business that you want. It's going to be process. How do we improve our delivery system pre-construction, during construction, and post-construction? Okay, to close it out, the best builders don't just build projects, they build systems and consistently deliver great projects and great experiences. Guys and gals, you've got to understand the cherry on top comes from the whole thing being enjoyable by the client. So they become massive referral mechanisms to you and your business. Um, you want to email me, maxelitebusinessadvisory.com, if you've got any questions. Um, if you want to have a 30-minute free consultation, complimentary coaching session, if you like, we'll look at what you're doing well, what you're doing not so well. Um, get across to the uh elitebusinessadvisory.com website, hit the big yellow uh book of consultation and try and find a space in my calendar because it's a little bit tough going at the moment. Um, we're pretty busy. But um, you know, if uh look, if you feel it in your heart too, and you're liking what you're hearing on this show, I'd really appreciate the five-star review. Helps us get the word out there because we want to we want to reduce that failure rate. Guys and gals, you deserve success, okay? And a lot of the time we the the failure that we experience is a little bit self-inflicted, okay. So we, you know, I think it's good karma to be able to put the word out and uh, you know, help guys and gals like myself and others that are trying to do this uh for very little cost to you guys and um really just get help us get the word out. So I I'd appreciate that greatly if you could do that for us. Um short of that, go build a kick ass business. See you on the next episode. Cheers