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Construction Pals
Construction Pals
Building Together: Empowering Contractors Through Homeowner Financing
Ben Barrick has come a long way from working out of his 2007 Toyota Prius. As Strategic Partnership Manager of Hearth, he now focuses on allowing construction pros to offer financing to homeowners, thereby helping contractors sell more, have happier homeowners, and provide a better experience.
Connect with Ben Barrick on LinkedIn here, and find out more about Hearth here.
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Welcome to the construction pals podcast. Brought to you by blue tape. Your source for the latest in the construction world hard hats off, headphones on. And let's get started.
Rick Butler:And I'm your host, Rick Butler, from blue tape. In today's episode, we're speaking with Ben Barrick strategic partnership manager at Hearth about the challenges contractors and renovators face when offering financing to their customers. Hey, Ben, welcome to the pod man. It's exciting for you to be here. And it's almost like old home week for free you and I How you doing, man?
Ben Barrick:I'm good, man. How are you? I'm excited to be here. I really appreciate you guys having me on here. And it's always good to catch up with you too. So
Rick Butler:absolutely. Absolutely. Yeah, we see each other trade shows and stuff like that. And it's always fun. A you got such an interesting background. You're an Indiana boy.
Ben Barrick:Yeah. You know, grew up in small rural Indiana. I absolutely loved to Nana, you know, my wife and I both spent a long time there. Were actually you know, we grew up together in high school, went to prom together, reconnected down the road, eventually got married, had kids moved down here to Puerto Rico, where we've been here for the last two years, kind of a benefit of working remotely. So I can get some ways when I need to. And it's a little different life than Indiana.
Rick Butler:Should you do have a you have a background in the construction field also, right?
Ben Barrick:Yeah, yeah. So right after. So right before I graduate college, I took a job at a commercial maintenance company in the southeast United States. I graduate from Troy University, I was there for about a year and a half before the company was sold. I was in sales and a little bit operations there to get kickstart, then I started my own business, right. Maybe not a perfect timing couple of weeks after Bear Stearns ran us in trouble. So right at the beginning of a great recession, I started my own business ran that and over five or six years, my brothers still operate, you know, the business has kind of gone through a couple different iterations. I kind of pivoted from there and got into, you know, sales and management. And it kind of became my sales career, which eventually landed me you know, here where I am today at hearth, where I get to work with 1000s of contractors, and construction pros every single day, helping them grow their business and really loving what I'm doing. And really the the journey to get here has been really great for me as well.
Rick Butler:What sort of helped you to more towards seeing financing for contractors, builders in the construction industry, something that you sort of gravitated to what pulls you toward this financing niche, if you will.
Ben Barrick:Yeah, I think it really goes back to when I was in sales. I remember sitting in a sales room. You know, we had a group of like, 30 people 30 sales guys out there. And each month, we come and have a meeting. And I told the story a couple of times. So it's almost heard this before, I'm sorry, but I'll call him Alex, Alex was, you know, young kid, kind of the bottom tier sales guy. And we had financing in place, like we were selling very expensive things 60 to $100,000 jobs, you know, every every single week of that we were selling, but Alex was always like a lower performer. There's guys in that room that have been selling, you know, for 25 years really, really seasoned really great salespeople. We had this great training once about offering financing. And the very next month, reports come out the scoreboard goes up in that sales room. And Alex is like number two. He's traditionally like number 27 He's number two, and I sold like the second or second or third like biggest month in company history. Overnight basically like within 30 days have done it. And people ask them like man that Alex you know, the hell did you do? This month it closes many deals. And it really subtle, simple answers like just start asking people they need financing. So the monthly payments is representing monthly payments to I think it was like right, then I realized how impactful it is not just for businesses, how convenient is for homeowners, but what it can actually do to like a sales professionals life, how they can actually change their life for the better by helping close more jobs held close bigger deals, having happier customers and just making the sales process so much easier and less stressful. And Alex went on to I think he paid for his graduate school in cash paid versus tuition in cash at Purdue University. I know he's got a couple of kids now to really set up like for the rest of his life. He said that he learned how to sell better. And financing was such a huge plan that
Rick Butler:Well, so when, when financing sort of that light bulb and looking at Alex and listening and seeing his story, you've seen it firsthand. And using financing as that light bulb moment goes off in terms of a builder or renovator? What issues are they facing financially now here speeding up to 2023? That, that they're showing and telling you about problems they're having?
Ben Barrick:Yeah, I think, you know, I, we hear a lot of and stuff, I think it comes down to the individual contractor or the in the business. But something that really stands out to me is really the access is what I'm hearing a lot about right now. Things have really, you know, things have become really expensive, right? Supplies, labor, the cost the job, all those things have increased in price tremendously over the past decade, especially the last two or three years. We went through, like this hyper growth stage for a lot of companies, which had a lot of great things come from it, but also create a lot of cash flow issues. forcing companies to really think, you know, how are we going to pay for these things, how we're going to buy materials, how we're gonna buy supplies, infrastructure, personnel, and payroll, how's the customer going to pay for these things? So some of the best companies out there are, you know, they, they hire the best talent. And they use the best materials, they have the the best product out there on the market, right. But now, they have a lot of competition, because a lot of competition enter the marketplace last couple of years. So if you're in that position, you know, what do you do to help a customer justify paying more, while you trying to keep operating costs low as well. So having access to capital, having access to people that can help you access to the best talent, giving homeowners access to you and your business and make it easy to buy from you, that's increasingly expensive and challenging. Some of the best out there have decided, Hey, I know we've done a lot of things the same way for past two decades. But there's got to be a better way to do it. Then you get some like the new guys, on the flip side, you get some of the new guys out there saying, Hey, we've either got to catch up to the big boys, or we're not going to exist next year. So they need access to the same benefits and the same tools that traditionally reserved for like well established tenure companies. But they normally are cost prohibitive, which puts them at a constant disadvantage. So I think, you know, when I think about like access, I think about from like, almost two different standpoints, it's these well established businesses, they're trying to access, you know, new capital and can kind of keep their business thriving. And then the access being limited or becoming available for the smaller new businesses to catch up and actually compete.
Rick Butler:So let's, let's sort of land there on that small guy. You know, that's trying to catch up with the big boys. And so when when you're hearing feedback from those guys, and you know, they're trying to do the catch up, they're trying to expand what you hear, like, we're gonna do self financing. And for that guy that's coming from that approach. What's an obstacle obstacles, probably more like it that they're running into when you hear that type of feedback, hey, I'm gonna do this on my own.
Ben Barrick:Yeah, I think that I mean, we, let's think about financing from kind of both our standpoint from like the blue tape and like the heart standpoint, consumer and like, you know, material financing, to buy a lot of material to sell a lot jobs, you have to put a lot of money. That's very hard for a new company. I've been in that position before I remember I started my business our back in like Prius the, the go to vehicle for all construction, seven Toyota Prius and a rear view camera that was nice. That's pretty early on adopter of that. But you can't go out there selling job after job and expect, hey, we're gonna get paid in 30 or 60 days and it'll float that money. You can't do that it's too burdensome for you. So you have to like slow it down to schedule things out really far. You have to take increasingly larger deposits for people putting their money at risk too, because you might need to use up other things. When you think about like how the consumer is going to pay for then. You know, traditionally there's a lot of go back to access. Traditionally, small guys don't have access to offering financing to the customers. There's basically saying hey, go figure out how to get the money yourself. Here's my price. And the big boys advantage has always been we can do this in your home without you leaving. I can see Secure the contract right now, not to worry about coming back here next month, secure the money. And that playing field is getting leveled. It's getting leveled every single day. There's so much new technology out there so many new products out there that are helping those small guys win. And really, really the guys that are very serious about it are taking advantage of it. And they're starting to see, like the fruit from that really bear out right now.
Rick Butler:So it's a time factor as much as it is a cashflow factor. So if I, if I see someone and I'm trying to close the deal, I guess time kills all deals is been a problem. And this is sort of I love that level in the flat playing field just to repeat what you said.
Ben Barrick:Yeah, yeah, I mean, I think it's definitely timing. And that's timing for your customer. That's timing for your business. If I have to go buy material, you know, how do I get deposits for that? If I'm self financing it. I can't name anything more risky than putting everything on the line and self financed, people still do it, people still will allow payments over the next two or three years out of their own pocket. That seems way too risky for me like you don't you don't have to take that on anymore. This is not Mayberry. As much as I would like the world to be Mayberry, it's not very anymore. And we know you can't take on those risks like that anymore.
Rick Butler:No. Cash flow is you know, in all we are I just say to everybody around here at Blue tape, we're problem solvers. And that's something I learned from you. I was listening to you and it seemed like you're always solving a problem and I hear cash flow that phrase being kicked around sort of define that from not from Webster's from but from spinsters dictionary from your dictionary, shorter defined for, for the folks here cashflow? why that's a problem. How you're looking to solve that.
Ben Barrick:Yeah. You know, the, again, not Webster's, but Ben's simple Indiana terms is, do I have money tomorrow for the things that I need to do today? So is it is it that I am doing something right now, that's gonna strangle me or my business. In the next couple of days, next couple weeks, next couple months, they got I think a lot of us, myself included, fell into the trap of I'll figure this out in a few months. Like, it'll come together, it'll work out. And sometimes it does, and sometimes it doesn't. And so a lot of what we're trying to do, you know, a lot of what I get to do each day is helping people really solve that problem of, hey, you need to be getting paid for your job and you get paid respectable prices for your jobs, you get a lot of work going into this, you need to be able to collect payment on your terms, you need to be able to not take the risk of financing a job. But you know, that's not your burden as a business owner. That is a added benefit you can offer to your customers to make it easier for them. That doesn't mean you have to take the risk on in that kind of scenario.
Rick Butler:So just to clearly differentiate what we do and what you do, I'm working with a supplier for materials to finance those materials. For that contractor, as an example, you're working with a contractor to finance that project for a homeowner or residential, would that be a good differentiator from what we do? Yeah, we're helping cash flow. To to okay to two different segments. When when my supplier or your contractor when the light bulb goes on this relieves cash flow. It helps, you know, get the deal closed. What do you think that light bulb moment is for that? For that small guy trying to catch up close more deals? Where do you think in terms of leveraging financing and offering it where does that light bulb go on for him or her?
Ben Barrick:Yeah, I think what I think there's so many misconceptions about financing. All financing does is create a cash paid customer for you. Whether you're a supplier getting having a contractor buy material from you, you're getting paid cash, like you're just that's all it does for you. As a contractor offering financing to a homeowner. All you're doing is turning them into a cash paying customer. The idea that financing and in credit those complicated subjects and I did not have an MBA. I've never worked on Wall Street. I've been there a couple times to visit, never held a job there before. There's a lot of financial people really smart savvy, what CNBC, you can understand half the things we're talking about. I think that's probably where a lot of people get their financial wisdom from it saying, Man, financing sounds complicated. Until it isn't, until you do it. And it's not really that complicated. The lightbulb moment usually is three things I'll say three things. Number one, when you realize that it's not doesn't have to be complicated, it's not complicated. at all it really does is create cash pay customers for you. Number one, your customers will borrow money from a 401k against their house from Uncle Tom down the street from your savings account, or from the bank, you just help them finance from. Number two was when you realize when you create that buying experience, I talked about experience and convenience a lot here. So tell me if I'm boring you with those. But no, no, we create a buying experience for a homeowner. You tend to sell more often, a good buying experience, you tend to sell more often. And for higher tickets. So who doesn't want to sell? When you offer financing, you're more likely to close the deal. Who doesn't want to be in that situation? You save time you save money, you sell more? Sell faster?
Rick Butler:Turn It In the coin. You know, you're talking to folks in the construction industry every day, you're hearing back from the people that work with you every day feedback, what's the thing right now? You know, coming from the bottom up from the small guy up, that's just pulling your hair out?
Ben Barrick:Yeah, there's a lot of things, I give you quite a few things. But I don't think a lot of them are new, I think from like the financial side. There, let someone just overall financial. A lot of people just don't know their numbers. They don't know the actual costs, the actual job cost, they understand what the material cost, and the idea of the labor that might be involved with it, but not pricing in fixed costs into the job. The cost of administration, the cost of fuel, you know, adding all your payroll costs and, and really understanding Okay, here is my profit, I need to hit each each job. And whether they're hitting it or not. They don't even know. They think they're making money, but maybe they're not making money. So that's like the overall financial thing I've you know, I always recommend, hey, if you're running a business, I know you love your trade, but you're but you've got to be business first to does it only or be able to continue doing it. You know, invest in yourself to learn that, whether you're hiring someone to do it for you, or whether you know, you're going to take time to learn from some kid on YouTube that can probably teach you it or you know, take classes but really understand. Understand your numbers today understand where your numbers gonna be in six months and a year kind of able to project those out. You have a lot more longevity as a business a lot more stability, too. We always talk about growth, I think companies always think about growth, and they neglect in our industry. We talk about growth, you know, we want to hire X many more guys, we want to grow into these new communities, yeah, so on and so forth. Without considering the stability. And we don't have stability in this industry. Going back to cash flow, you can be out of even be out of money, you'll be able to earn $1,000 pretty quickly. And if you're not stable, you don't have you know, the Financial Stability underneath your company. That's hard to climb out of, you know, if something goes wrong and things go wrong, our industry right wreck, things go wrong every single day on every job sites. And so you better know what those numbers are coming from in terms of like the financing side. Not going to name names. Am I going to speak disparagingly of anyone out there, because I think everyone has a place in the market. But I think the cost of offering financing has become so burdensome not just for companies but also for homeowners. I think a lot of the fees are involved with financing are putting companies at a disadvantage. People are starting to reject the idea of offering financing, which is going to hurt the bottom line in the long run. I think you know without giving like pointed advice about what to do. I would encourage people to just understand what they're offering better. Understand, like we know interest rates are kind of crazy, right? No bathroom round, right? Get an understanding of what that means for you know your sales process, evaluate where you are, understand how much money you're spending on that how much money you're making from that, and make the best decisions based upon those numbers. Not just because I've been doing it this way for five years, I will keep doing it.
Rick Butler:Let's go back to you know, let's go back to Ben in that Prius. Back in the day, you said 2003, what's the what's the best thing you could tell that guy and, and relate it to what we've been talking about.
Ben Barrick:The two things I would tell myself is number one that quit talking so much. Just customers know what they want. Customers are buying for their reasons. You don't have to tell them everything. You don't have to have a plan, they already have a plan. You just got to shut up and listen, sometimes listen to what your customers are saying to you. Listen to how they're saying things to you, who's telling you those things. And listening to their buying habits. I think as business owners, and salespeople we think we know, it's this weird disconnect, I don't know why it happens. We have an idea about how people should buy from us. But we're also consumers. And for some reason, we have a hard time connecting our consumer brain to our business brain and realize our customers should buy from us this way. But our consumer brain says, but we like buying this way. And those never get connected for some reason or industry. Not sure why. But if we listen to how our buyers actually consume things, how they actually want to buy things. I think we're all at a huge advantage. We see a lot of companies out there like you can buy, you can buy roofs online right now, without a sales guy ever going to your house. It's incredible. What people are doing it, and a lot of homeowners are doing it. That's the That's the new buying habits of consumers. My number number two to pile on there. And this is more for the small guy, the small guy who I love. I love the small guy, the guy who has to overcome everything. We talked so much about growth and expansion. And we had this hyper growth stage, you know, those last couple of years. And I think the focus traditionally in construction and contracting is so much about being the big guy. And by being the big guy, you have to be everywhere, right? You have to cover all the geography. When I thought when I was in Central Indiana, I'm going to grow my business, which means I'm going to expand to six new counties. Well, turns out, it's a lot easier to sell 50 More jobs this year, in my own neighborhoods in my own community, versus traveling two hours away each day to sell those jobs. They get people really are determined to own their market, own their communities. You make so much more money, you spend so much less time you want to be the go to guy when someone has someone at church says hey, I need a new roof. You want the Minister to say Hey, Ben is the Best Roofer In town you should call him. Like that's what you should strive for. That's how you grow your business organically. It's a lot cheaper to do it, it's a lot easier to do it it's a lot more cost effective to do it. But I think sometimes we get stuck in a mindset where in order for me to grow my business I just have I just need more customers. But a lot of those customers are in your backyard already.
Rick Butler:Oh, good stuff, man. Those are such good nuggets. I hope the folks are taking notes and we're gonna you know, just review this. There's been so many good nuggets. I want to I want to go sort of store to start landing the plane here from this aspect. What I'm doing is I'm helping that guy on terms 3060 90 days that blue tape to use trade credit for supplies and materials, whether that's a supplier offering it or a contractor utilizing and leveraging trade credit helped me and a three story elevator pitch not the Empire State Building elevator pitch but the three story elevator pitch which you're doing As you guys are doing it hearth,
Ben Barrick:we are trying to make the selling process easier for contractors. And the hearth app is going to allow you to become the most convenient person to buy from, thus allowing you to sell more, sell more often had happier customers, give them a better experience.
Rick Butler:How can how can folks get in touch with you and you possibly help them or point them in the right direction?
Ben Barrick:Yeah, reach out, reach out to me on LinkedIn, reach out to us at heart. If you want to learn more about that as well.
Rick Butler:You don't know how much I appreciate your time brother and what I've always learned from you, and I know the folks are gonna, you know, get something so appreciate you, brother.
Ben Barrick:Yeah, man, I appreciate you having me here. I really look forward to hearing this all across the platforms here. And I've already liked and subscribed to you guys. So I love the podcast. We look forward to what you guys have in store ahead of us. Thanks, man.
Rick Butler:You got it, brother. Adios.
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