Sustainable Builders Yak
For Australian construction professionals building high-performing, sustainable homes and homeowners looking to create their own sustainable, high-performing home.
Sustainable Builders Yak
Ep #59 How to Build a Profitable Construction Business | Alex Campbell
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Episode Description
Alex Campbell, director of Tallwood Custom Built Homes shares his journey from a two-way radio room to becoming one of Western Australia’s most awarded builders. In this episode, he unpacks the realities of building a profitable construction business—covering growth, client selection, insurance challenges, and long-term sustainability.
Episode Covers
- Building a successful construction business without a trade background
- The importance of profit, systems, and smart client selection
- Navigating home indemnity insurance and growth limits
- Scaling teams, managing downturns, and industry challenges
- Planning succession and creating a business that lasts
Episode Highlights
- From two-way radio room to award-winning builder
- Why not being a tradie can be an advantage
- Scaling from 3 to 42 staff—and back again
- Lessons from COVID and industry shifts
- Why profit is essential, not optional
- Winning projects and building a strong reputation
- Creating a clear exit and succession plan
Perfect For
- Builders growing or starting a business
- Tradies transitioning into business ownership
- Construction leaders and developers
- Anyone interested in building a sustainable, profitable business
Learn more:
Sustainable Builders Alliance
Welcome to the Sustainable Builder Jack, the podcast that gives you the confidence to build high performing sustainable homes.
SPEAKER_00We're here to cut through the noise with honest conversations from the front lines of the industry. Talking with builders, designers, consultants, and the change makers driving a more sustainable future.
SPEAKER_01Whether you're on the tools, behind the drawings, or just curious about what makes a home truly sustainable, you're in the right place.
SPEAKER_00Get comfy, get curious, and let's have a yak about the future of building better.
SPEAKER_01The info shared in this podcast is the icing on the cake. Sweet but not substantial. For the real deal, tap into the wisdom of experts who can provide advice on your specific situation. Stay sharp and say sustainable. We'd like to acknowledge the traditional owners of the land on which we meet today and pay our respects to elders past, present, and emerging. G'day folks, and today's podcast, we were joined by Alex Campbell from Tallwood Construction, right here in Western Australia. Now, I've known and worked with Alex for quite a few years, and I'm fortunate enough to have had a bit of advice and mentoring from him along the way. Also, uh, unlike others, his journey started from humble beginnings in a two-way room all the way through to him becoming the most successful builder in the southwest of Western Australia. Yes, I said a two-way room. That is a first for me. I didn't know these places even existed. So have a good listen to that. That is a good laugh. It's it's a good story. Now, we uh we went through a lot of business in this particular podcast, which we didn't expect to, but I thought it was quite good. Um, Alex gave us a rundown basically of what it's like to become a builder when you work in business rather than being a tradeie. So um how he actually explained how being a tradeie differs to not being a tradeie and the positives that's from that. That's something that we're not used to in our little echo chamber. Most of us are tradies that go on to be builders. Uh we then had a rundown of his business over the years, and the manny challenges faces, and he has faced plenty, um, including going from 42 staff down to just three in a very short period of time. Um, he spoke to us all about that and how he dealt with it and the challenges he faced, is a great story. Uh, we then touched on the COVID pandemic a little bit. Um, he was quite I wouldn't say upset, but like many of us, um, smaller builders, uh, we didn't get a whole lot of pile from the government, whereas the big end of town got a lot. So he had a few words to say about that, which I completely agreed with. Um then we went in and we had a chat about you know staff, materials, client challenges. Uh, we touched on the apprenticeship program and how Alex uses that to suit his company needs. Uh, the usual staff materials issues since COVID seems to have died down, but he did have quite a chat and quite a lot to say about that. Towards the end of the podcast, then we then went into his accolades, and believe me, there are many. Alex has won over 88 awards in the industry, and many of them are state and national awards, so not just local. Alex has absolutely excelled in what he has done. Excelled. We spoke many times about business, which was fantastic, but one of the nuggets that we would um I would say would benefit everyone would be business coaching and particularly the integration of a secession plan into his business model some years back, allowing him to take a stress-free retirement and no outgoing responsibilities and liabilities. This is a great conversation. I have great time for Alex. He is a stall word of the industry, and I I really I really think you guys will enjoy this. Right, good morning, Alex. Thanks for joining us, mate. It's very good to have you on. It's been a while. Thank you very much. Pleased to be here. Good.
unknownRight.
SPEAKER_01So, Alex, as we always do, let's start off with a little bit about yourself. Who is Alex and where did you come from? Where did you grow up? Siblings. Tell us all about yourself, Matt. No problem at all.
SPEAKER_02Uh, I'm 61, 62 this year. I'm the youngest of five children. Um grew up in Western Australia um and uh wanted to be an architect uh through high school but didn't have the the marks. And uh watched the bullet there, you did. Yeah, I did indeed, I know. But then I went to the other side of uh uh studied civil engineering. Oh and I worked in a engineering company a couple of years, but I was drawn to the building industry, I guess, um following my passion but through a different uh avenue. And I started off in um whole j uh here on here. It was called a two-way room. So this is before mobile phones. So we had uh I think it was six supervisors, and they would call in on the two-way from their cars to uh to little old me uh in in an office, and they would say, you know, please call up the window frames for this project, whatever. Um but what it really taught me at a very young age is the art of scheduling, of being organized and programming projects. So those uh supervisors would have had 30 or 40 projects on at any one time, and it was my job to make sure that everything was ordered and everything flowed smoothly.
SPEAKER_01Sorry, hang on. You're in a room with what? UHFs. Uh yeah. Yep, a little two-way, yeah. Roger, over and out, all that. Really? Yeah, yeah. That must be unique to WA. I've never heard that before. Hmm.
SPEAKER_02That was it certainly was a thing. Um rather famously, one of the um uh supervisors was on the two-way radio um when his car got run over by a truck. So but yeah. So talk about um the uh the pitfalls of handheld technology. Wow.
SPEAKER_01Yeah, well I'm not even gonna ask you when that was. So you're in a room in an office somewhere, and you're just taking orders out to two-way.
SPEAKER_02Yep, indeed. And then from there I I progressed on to uh actually doing estimates and and scheduling. Um and after being in that company for about 18 months, um, I went and saw the general manager or the owner of the company and asked what my future would be, and they said, Oh, doing the same thing. And I thought, no, that's that's not what I had planned for my life. Um and then I moved on to a a uh a more bespoke two-story building company and uh felt completely out of my depth. I thought, well, they made a terrible mistake, I have no idea what I'm doing. But as we all do, you you just uh make it until you well fake it until you make it. Tried by fire. Hmm, yeah, yeah. And I was with that company for six years, and then actually in that interview, when I interviewed for that job, the two owners made the terrible mistake of asking a young eager man what uh well where they where I would see myself in ten years' time. And I had said off you know without knowing the question was coming, I'll starting my own building company. And uh pretty much that's exactly what I did. I stayed with them for six years, the partnership um um broke down, and one of the one of the owners started his own another building company. I went and joined him for four years and then I left him to uh start toured. So you didn't have a trade background of any kind? No, no, I am I'm a unique builder in particular in Western Australia. I have no trade background. Um personally I see that as an advantage, not a disadvantage.
SPEAKER_01I'm beginning to realise that, you know.
SPEAKER_02And and the reason my observation of of um most builders when they start, when they have a uh carpentry background, is they find it really, really hard to give up the tools. Um and no one can do it, do the carpentry as good as what they could, and it just holds them back for a long time. And the the facets of being a builder are so numerous and um no one's ever prepared for it. Yeah, you learn on the on the uh on the run out all the time. Yeah, on the fly, yeah. Yeah, even today, every day's a school day as a builder. Yeah, yeah. So I see my um uh I guess my apprenticeship being inside a builder's uh at a volume builder's office where I was exposed to a lot of different uh styles um by supervisors um and um uh just different people, different clients, but was a really good grounding.
SPEAKER_01Yeah. Where where was all of this based if you don't remember? Oh, it was in Perth, right? Okay, yeah.
SPEAKER_02So you weren't always in the Southwest? No, no. So when I uh the last four years I worked for someone um that was in a project or for a company doing work in Dunsborough, which is where I started Torwood. Right. Okay. So it it taught me all the facets of running a building company, including sales, um finances to a certain extent. Um I did everything other than sign the checks. Once again, checks were a big thing back in the day.
SPEAKER_01Yep.
SPEAKER_00Yeah, right. So Alex, so you've you started Torwood 1998, is that right?
SPEAKER_02Correct, yes. That's correct.
SPEAKER_00So so how long were you working prior to to that then? Before you started in building companies for twelve years. Oh, twelve years. So you had a reasonable yeah, apprenticeship in in overseeing or seeing how a building company operates.
SPEAKER_02That's correct. The last four years, uh, I was the only representative in the Southwest. I was supervising and doing um at all facets other than signing the checks.
SPEAKER_00Gotcha. So to talk to us from it it is fascinating from a perspective of somebody that's uh well not in the trade, um, how you started a building company. Talk to us about your role as as you first started and and how it's evolved to where you are today. Yeah, thank you.
SPEAKER_02Uh so as I was the only person in the company, so I was fortunate that I had uh three clients who wanted to build with me, and they uh they convinced me that it would be better that they wanted to build with me, not with the company I was working for. Uh, relatively simple to start a company back then, um, and I effectively had the seed money of the three deposits, um, and that's all I needed. Days when indemnity insurance was a lot simpler. Um, I remember I think I was 18 months into it, and I went to apply for another um homeowners warranty, and I was told that there was a limit. I was absolutely dumbfounded. I could couldn't it would have never been mentioned, and it was just after the um uh there's a building company called Mansard in West Australia in the 80s that collapsed. I think they had 500 homes under construction, so things changed dramatically after that. Um, so that's the whole homeowners warranty um obviously limits how fast a a building company can grow. Um, but it uh three or four projects on at any one time and just steadily uh grew from there, and then after probably three years uh employed a supervisor. Um but then I still did everything else and then uh probably around the same time a part-time bookkeeper. Um but I remember uh it would have been about the third year, and for the number of checks that I was writing having and then doing the envelopes myself, um I calculated took five minutes per per transaction, and that alone was in a uh 40-hour week would have been four weeks just writing checks of the year. For any in the year. That's how the volume of yeah, so t technology is a blessing and a curse. Yeah, wow.
SPEAKER_00How many rows were you doing at that time?
SPEAKER_02Probably um eight to ten a year at that time. Yeah, yeah, that's a little bit too. Yeah, eight. That's early on, man. Yeah, and building was a lot simpler process and also a lot faster than it is now. And well, that's because of what you're building too. Yes, indeed. Um clients and trades love a new builder. Um, so you get a lot of support. Well, I I found that. And I I've into a lot of um young builders now, and on the whole, um yeah, people really like to try and support the new guys coming through. Yeah. Um, which I'm not quite sure is the best idea sometimes, but anyway, there are there are reasons why.
SPEAKER_01So I'm gonna go a little bit left field already. I was trying not to, but I'm going to. You you brought up the home indemnity insurance, right? So um for everyone else out there, I've known I've known of you for quite a long time, Alex, but I've known you personally for probably four years now, three or four years maybe. Um Alex has mentored me quite a bit in the past. Now, a little bit towards, I would think one of our mentoring phone calls was exactly that. It was um home indemnity insurance. So can you can you take a second to talk to builders that are starting out and give them some advice on how to approach the home indemnity when they're trying to grow their business? Because that's I think that's something that's completely ignored and it can make or break a business.
SPEAKER_02Thanks, Brian. It's even further than that, it's how you set up your company at the start. Yeah, absolutely. Yeah, I had absolutely no idea. Look, I had an I've still had the same account I had when I started. Um I don't think he knew much more than I I did. So I can play any game if I know it know what the rules are. Yeah, I think a lot of uh people when they get their um builders' registration don't really even understand the constraints of homeowners' warranty. In short, um you require five uh five percent of fixed or of solid assets, could be cash, could be property, to be able to get the insurance you require. So if you um want two million dollars, uh what's the mass on that? You've got to have um sorry, yeah. $100,000. Um when you're first starting, they're gonna want more than that. So um the typical builder will probably put assets in their partner's name um so that yeah, should anything ever happen, they're they're not their family's not left destitute. Um I can un uh being a builder is a bit like um uh um coffee uh uh martini, effectively. You have to be profitable, but from a tax point of view, you don't want to be too profitable. But to satisfy insurances and banks, you need to make sure you you uh you get that balance right. So you are actually making a profit um and to allow you to grow. It's a fine line. It's a very fine line. So um through at the start of the GFC, so not the GFC, so the um uh COVID boom, uh my accountant and I went and saw our broker just to really understand what it is that uh QBE require from our books to make sure that we could increase our um our loss of turnover. Yeah. Um and that that's a real game changer. So my advice to anyone is seek the advice from people who have been there and know. Um, and if you have any concerns that your broker or your accountant don't know, you better, like any relationship, you better to make the changes early. Yeah, absolutely. That was probably the best advice that you gave me at the start. Yeah, and the other thing, of course, is profit. And um most people become builders because I in my my belief they actually like to help people. Um that's really the the driving thing. We are people pleasers and there is no greater honour to build people's houses. But there's no shame in actually making a profit and doing so, and in fact, it's our responsibility to make a profit because when there are financial um pressures in a building company, it's it's bad for everyone. So you're not doing yourself, your family, your staff, your tradespeople, or your clients any um any favors, past, present, or future clients, it affects everyone. Yep, absolutely.
SPEAKER_01Um yeah, so the the the one thing I would add to that is that um when a company becomes successful, the liability kind of fades, it doesn't fade away, it's always there. But when you start out as a builder first, whoever's listening, if you're starting out as a builder, you will be asked to and you will have to personally indemnify that insurance policy. Correct. So QBE will give you the policy or through your broker, whoever it is, but you will not get home indemnity without personally indemnifying that insurance. So there's a whole we we'll go through this. We have an insurance guy coming on in a couple of weeks again. We had one two years ago, but we have another one coming on to go through this. Sorry for going sideways, but I did want to get that from you, Matt. That's a very important thing if you're starting a business. Yeah. Oh, it's it's huge, bro.
SPEAKER_00Like, like yeah, yeah, you as a builder, you do you put your livelihood on the line. Yeah, anything, any asset you've got, yeah, it's there to support your business and the way you can build homes. And and then, of course, the 10 the uh I don't know, the seduction in um getting a job early as a young builder is to go in low, and then it these pressures, if it's not handled right, can really pile up on a on a building company, like we've seen so many collapse in the last what two or three years.
SPEAKER_01Yeah, but taking on too much work is a is is a problem too. Well again, taking on too much work.
SPEAKER_02Yeah, that's a problem too. Particularly if you take on too much work, if you've if you get screwed on a job and you end up doing it for agreeing to a lower margin you should do, then the you think, well, okay, well, I'll take on another job so I can make more money, but it just gets harder and harder. That's right. I've been in that spiral. That's that's hard. That's really hard. Yeah. There is absolutely no doubt from my point of view that the biggest change um since COVID is the fact that um no builders that I know of in uh Western Australia are quoting against another builder. No. Because we are so uh so sought after by clients that particularly if you have a good reputation, um, it's more so when can you start and um not how much is it going to cost. The cost is the cost. The cost what it costs. Yeah, yeah. Just for for anyone, uh anyone listening to this, um, particularly QBE in New South Wales, put out a one-page fact sheet. There clearly states, and this is to go to the clients and builders, if you're um if a builder is making less than 20% margin, they are deemed by the insurance company to be at risk. High risk. Yep. So anyone out there who is uh um a builder um and you're charging less than that, basically you'd stop it now because you will never be able to grow because the insurance company will always look at your books and think, well, um you can be the best builder, but if you're not profitable, they don't want to take your risk.
SPEAKER_00And that'd be 20% gross profit, they're expecting.
SPEAKER_01No, so they're saying margin, they're listed as margin. 20% margin is only I think is it fifty 15.7 or something percent? I don't know. Profit? That's gross profit. So your margin.
SPEAKER_00Sorry? That's gross profit, though.
SPEAKER_01Yeah, but the the percentage of the total amount is less.
SPEAKER_00Yeah.
unknownYeah.
SPEAKER_01It does hurt your brain. Yeah.
SPEAKER_00Yeah, it does. So are you saying markup?
SPEAKER_01But your profit and your markup are two totally different things, they're different percentages. Yeah, I know. So what what are you saying? Their sheet says markup. And it's to do with it's to do with the Home and Building Contracts Act.
SPEAKER_00The reason they say that is because Well that that's sort of that's pretty low, really, isn't it? Yeah, it's ridiculous.
SPEAKER_02Uh but they're saying that's the minimum. Yeah. I I'm been uh mentoring a a young builder who I can't get him to believe that he's worth more than 15%.
SPEAKER_00What? Yeah, wow.
SPEAKER_02Well he won't last shitting himself in the foot because he he's got a limit of 1.5 million and he can't grow.
SPEAKER_01Yeah, he'll stay stagnant. Yeah. Yeah, that's too hard. Yeah. Yeah. Alright, let's let's move on. Sorry. Um, so listen, you you're specialising in uh high-end architectural luxury homes, and if you drive anywhere around, you know, you're from Witchlift Margaret River, Dunsborough, you're basically the southwest of Western Australia. Um, what I want to talk about is how in God's name you get through some of the sites you get through. So the complexity of some of these sites, not not alone with the ball ratings, but the cambras on the site and the rock. Talk to us a little bit about that. How why does a builder do that? What's the incentive?
SPEAKER_02Why wouldn't a builder do that? Um love the challenge, and um it's the conditions in which we live. Uh what would make me more um scared would be building in uh in a city where the blocks are so tight and traffic management is um is a killer. So give me a um a difficult rural site any day of the week because at least you have the space and you can make the noise and the mess that you need to do when you're building a home. Um that's a bit of a trade-off. I never put it out. I never thought of it that way. Um at the start of COVID, there was myself supervising and my mother. We now have uh six supervisors, so the growth in the last six years has been um quite phenomenal. And every one of my supervisors is a registered builder in their own right. Uh Brian, you're aware of my secession plan. Two of the two of the gentlemen are buying the company from me next year. So I'm very fortunate in that all of the uh the supervisors who I have could run their own companies if and they have the ability to be able uh able to, but they love building and I Give them the opportunity to work on the best projects.
SPEAKER_01So you said there you're very fortunate. I'm gonna call bullshit. You make your own luck. You absolutely do. You chose those people. Like you make your own luck, man. Like, yes, you're fortunate that those people are out there, but at the same time, you took your time and you're not it's not like you're paying them bottom dollar either.
SPEAKER_02No, no. You get what you pay for. Yeah, and so it's really important from my point of view for every any contact that anyone has with Tollwood, whether it's my staff, uh, our clients, our trades, it's a positive one. Um that's so critical in ensuring that the company's success and uh I guess everyone's happiness.
SPEAKER_01Yeah, one thing you've taught me is forget the bullshit. It's it's a straight shoot. Like if the client doesn't have the money, don't deal with it, move on. And it's it's it's doing everybody a favour. I I had it took me a while to get over that. I was working through with my business coach, and then you and I had a couple of conversations, and that's that was kind of the change for me which pushed the the company forward. So you need the A-grade client type thing. So when you're talking about I'm talking about the difficult blocks, and I'm like, why in God's name would you take on? The houses are beautiful, Alex, but man, like a head fuck. Call it what it is.
SPEAKER_02It's just um yeah, thanks, Brian. Um look, our our ideal client is someone who has m money, um, probably an ego for those particular difficult sites, yeah. Um, and time pool. And we uh we make sure that um we are if there is a problem that we either have the solution or they don't even know there's a problem to begin with. Yeah, yeah, yeah, yeah. We've got philosophy as well. And and uh um particularly post-COVID, I think 99% of our clients are just so grateful. Because it's been highlighted um through the media and and uh people's experience how bad a building experience you can have. Yeah, there's some horror stories out there for sure. My my observation in the last little while of um talking to to younger builders or less experienced builders who are having difficulty either financially or unfortunately um through the state arbitration tribunal, it it is where they take on a client who doesn't have the money to do the project that they've contracted. So that's the other piece of advice I'd I would give. It doesn't matter how how desperate you are to take on a project if you're a builder, or how attractive it is, if the clients can't pay for your services, don't do it. You're better off finding another project to do than take on one that you shouldn't do. That's a hard thing. It's great advice, but it's a hard thing, Alex. I know, but but as a builder, if you if you don't hone your radar on people and who they are, then you it's always going to be hard. Yep.
SPEAKER_00Alex, I have to just touch on your succession plan and also sort of revert back as well to you know you coming not from a trade background. So it seems like you've built a business, which is you know sounds obvious, but a lot of builders do fall into the trap when they've got a trade background, they fall into the hands-on element of it, they give themselves a job, whatever it may be, site supervision or whatever it may be. So, what's your role in the business? I mean, you you're talking now about how well you qualify clients. I wouldn't imagine you're the one qualifying them, are you? You sound like you've got a team behind you that do that.
SPEAKER_02No, one of the other things that's um okay, so I'll just take it back a slight step. When you you have a building company that that doesn't have the scale that we now have, if a client comes to you and says, Look, I've got this idea for a project, if you don't have um a drafts person or architect or either in-house or a really good relationship with, it gets really hard because the clients have come to you because they've got a problem and they're asking you to solve it. And in the past, there are plenty of times where I've either just had to turn them away because I you know you don't have the resources to be able to do it, but you can send them to an architect or a drafts person or designer, and all of a sudden they're their clients and then they're no longer your clients, and then you lose the control of the process. So following through from the boom of of COVID, we've um well sorry, GFC. I had we had an in-house uh design team um after the GFC. Basically the company um constricted greatly, so everyone was let go. So I had a uh an interior of uh Jenna, an interior architect, joined me about three years ago. So she initially came on to do contract administration. Uh she ended up designing the house I'm I'm now living in. So she's now our um chief designer, and we have um two draftspeople who work with her. So we now are doing full design and construct. And um until very recently, I was also doing the estimating, so taking off the quantities for the projects that that we were building, and now have a full-time estimator scheduler. So I finally feel that the company has got the scale that is allowing me to have um the key personnel in in accounts, estimating, scheduling, design, and then the the building infrastructure around it, that it is a company. It's no longer just a job, it's a company. So I still supervise myself uh for geographical reasons. I live uh 35 minutes from the office, and it doesn't make any sense. And every all the other supervisors live south of the office, and I'm north of the office, so I still supervise myself, and then basically I I guess the um over oversee all the other departments. And because of the uh design and construct, I until 12 months ago, I would be the one talking to every client. Now that's shared between myself and uh the um Jenna, the interior, or the the designer and Jamie, who's the the general manager. So and that's part of the tran yeah, transferring of leadership um and taking it not just being all in my hands, um, and letting uh Jenna and Jamie develop their own skills.
SPEAKER_01Can you talk to us about that or is that private, um Alex, about your succession plan?
SPEAKER_00Yeah, just Brian just got to give a shout out to a sponsor of ours, Exit Strategy Group. So who specializes in um exit strategies, but yeah, who have you worked with? We'd love to know more.
SPEAKER_02Uh look, we I worked with three um lawyers before we finally worked at that. And in fact, um it was really worked out between uh myself and my accountant. Um and then once we had the framework of that together, found another lawyer who could actually um put it together. The best thing that I have done was buy the office and our um uh yard in the company name. From a financial point of view, um, yes, not not so much, but it underpins all of the um the financial requirements that the building company requires. There's no debt on it. So and it it also means that Brant and Jamie are buying 50% shares of the company, so they're not having to put their uh um their homes on the line because the comp the company owns owns the um the business. So that has been the um uh the the best business decision I've made um for a long, long time. Um it also means that when it comes to the builders registration and um the change of insurance, effectively they sign a form and everything just transfers to them and I'm removed from it. Yeah. So it's really, really smooth. And the the main ad um attraction to me was otherwise as a builder and you have a six-year warranty, even if you close well, when I've got enough volume to have six supervisors, how do you wind a company down? Yeah, yeah, yeah. You'd you'd lose the key staff when you want to. Yeah, yeah. And um, yeah, 61 now, I'm still um physically fit and active, but at some point in time that will change. And I didn't want to get to the point where either my um staff or my clients are starting to think, well, you know, he's a bit old. What's going on? I'd hate to if I was a client spending four or five million dollars uh with a builder, would I want to be doing it with someone where there is no plan? So having a plan was really, really critical. What was the time period on that, Alex? Uh it's been in plan now for uh about two and a half years. And um it um the the boys will buy the company from me um 30th of June next year, 2027. So it's quite a quite a long burn, but yeah, but it's not no, but I I really I really wanted it to be as seamless as possible.
unknownYep.
SPEAKER_02Um that Brian, as you would know, I I am fond of um taking holidays. Um I would you know what I really want is by about September next year for people to look around and think, oh, I haven't seen Alex for a while.
unknownYeah.
SPEAKER_02I was gonna ask, what what what what's what's your plans after um anyone who uh who has a builder in their life knows that their family suffer probably the most. Um and I like doing adventures that my wife doesn't like doing. So um goes an inside scoop. Uh no, look, I like um bushwalking and um whitewater paddling and yeah, some people call them adventure, but I just um getting away from technology and yeah and people, I guess.
SPEAKER_00Even a beautiful part of the world to do that. Indeed.
SPEAKER_02Yes, yeah, but so it'll be more travel with my wife. Um ideally, we'd like to um uh rent a villa in Italy or s or um France for two or three months and you know then just immerse ourselves in that culture for uh and of course be irrelevant. Yeah, yeah. Looking forward to being a good one.
SPEAKER_00How good would that be?
SPEAKER_02Oh, yeah.
SPEAKER_00Put the phone down, yeah. Buzz, buzz.
SPEAKER_01It's it's one thing that struck me when when we first started talking and you first started mentoring me. We were having a coffee in, I don't know where it was, we were having a coffee somewhere in town here, and you were talking about the succession plan. And I had never I had a business coach at the time, nobody ever said anything about a secession plan to me. It was the first time I've ever heard of it. And I needed to be like I being honest, I was like, holy shit, that is actually a really, really good idea. A really good idea. But if you as you've done, if you plan this way ahead, it's actually easy.
SPEAKER_02If you plan it correctly, yeah, and certainly I'm selling the uh the company at a greatly discounted um amount. But after the uh through the GFC, I I had a staff of 42 people and finished up 12 months later with a staff of three. So I'd I'd already been through descaling a building company and the uh the toll that that takes on you um emotionally, yeah. And I wasn't prepared to do that again. Yeah, yeah. I don't blame you. That is the same thing. It allows me uh you know the the old um dropping the the mic and walking off the stage. It it is it should be that simple. That's the plan.
SPEAKER_03Yeah, yeah.
SPEAKER_02And that's what we're we're welcome to working towards.
SPEAKER_01It's a very businessman approach more than a builder. Yeah, because that's what I noted about it. Because I'm not a carpenter. Yeah, yeah. Well, maybe you're right, yeah. But it's yeah, it's it's changed my approach in my view, for sure.
SPEAKER_02Well, um, Brian, as you know, I've worked with Kirk from Builder's Coach for I think 11 years now. So um what I've really liked from and respected from Kurt is just you can't do everything that a coach uh thinks you should do or you you work through, but you pick up the you pick up what you can and you do you work with what you can. Yeah. Yeah, yeah. One of his yeah, one of the uh earliest teachings would be start with the end in mind, um, which is really, really hard because once you've already started, that's too late. So then you've got to try and make it formlet. You've got to manipulate what you've got. Yeah. Don't do something that you can pay someone fifty dollars an hour or less to do. Um, and that's one that chippies don't really quite understand. Um I like to say to my supervisors, they need to have soft hands. You can achieve more of an hour of thinking than you can do uh from an hour being on the tools. Yeah, yeah.
SPEAKER_00So um that's that's good advice, I think, for many, many listeners out there.
SPEAKER_01Yeah, yeah. It's to trust to delegate, though. That that's a thing. And and being a trader, you're a you're bang on like that's taken me a while, but now it's I don't mind. I will just delegate. Absolutely. Here you go. Have a crack.
SPEAKER_02Well, I guess if you if you're a carpenter and you think of all the other trades that are involved in your building sites, you're not a plumber, you're not a plumber, you're not an electrician, you're not a styler, you're not a concretor. You trust the people who you employ to do those aspects. What's the difference?
SPEAKER_01Yeah, yeah. Oh, yeah. Don't have to convince me anymore. Yeah. I'm there. I'm sitting right next to you.
SPEAKER_00Alex, have to go and ask, you know, you've obviously ridden the many highs and lows of the industry, of course, you know, the pre-GFC and then the the downfall thereafter. Um what's your advice, I suppose, to a builder when things are going well?
SPEAKER_02Yeah, and God, it's great to be able to say that it's going well because what that's one of the fascinating things being in Western Australia, it often will be that our building cycle is out of step with the rest of Australia. Yeah. Um through COVID, I think it's become very obvious that the federal and state governments have very little control over our uh the forces that affect our industry. Yeah. And we are on our own. There's absolutely no doubt about it. If you think that anyone's going to come and yeah, with the GFC, uh, the federal government came out and helped the commercial builders and the um project builders. Yep. Uh bespoke builders, we were left high and dry. We got real, if anything. Yeah, we did. So um so in the time going over to uh Sydney and Melbourne with Kurt with Builders Coach, I was fortunate enough to be involved in um uh some high-level um meetings with other builders from around Australia. And yeah, they're singing the glory days that um they could couldn't get a um they had more clients than what they needed. In WA, I uh we were in a recession for eight years leading up to COVID. It was really, really tough, and that's why we have such a um a shortage of homes here now. Yeah. Um, so I know for a fact that if you uh you can be the best builder with the best processes, if the clients don't want your services, it's really, really so that has made me honed to make sure that we um we try and make sure that everyone who knows Tillwood knows the brand and can only speak highly of it, even if we can't if if we're not the right builder for them, we'll help them find a builder who is so that um and I one thing I I still receive all of the inquiries, and if I see an inquiry, I can't I ring them up straight away and talk to them because most it's not the experience clients get from most builders. And if you can't respond to an inquiry, what chance do you have of satisfying a client during their construction? So you've got to win their confidence straight away, and at least if you've if you're cutting them loose, they they are happy with that and they'll go and find the next solution. So uh Simon to answer your question on um the advice when things are going well, um keep your eye on the ball. Don't don't rest on your laurels. Um I have a an ability that I can read I I get CC'd on near every email that goes through the company. Um I can read them, under have an understanding of it, and then just delete them, and then you know it could be three or four months time later, it'll come up in conversation, and somehow my my brain has a hook on it and I can at least recall what's gone on. Um and I appreciate that's not a skill set that everyone has, and I think that might have you know that's probably why I I um I quite enjoyed the two-way room because I you know I'd have several phones going and the two-way, etc. Um yeah, and so through the the last five years, we've continued to grow as the um uh as the demand has come through. So yeah, and the the our inquiries are still very, very strong. And the um uh in um design and construct is yeah um very, very uh under pressure at the moment. Yeah. And and there's a pressure that we're all also putting on ourselves because uh we need to convert the uh make sure that that level of client um satisfaction is maintained. Yeah.
SPEAKER_01So we can't drop the ball at any state. Simon and I were talking about this before we came on life. It's like when you go from you have to forget about the trail, but when you become a business owner, you have to be across everything. You don't necessarily need to be doing everything, but you need to be across everything, and you can never take your finger off the pulse. No, and then when I started business coaching, right? I was always looking for the silver bullet, and there's no silver bullet. No, there's like so many facets to what we do. You have to be good enough at all of them, but not perfect at everything, right? No, you just need to be good enough at all of them, and it's not like oh your brand is successful now, boom, we've done it. No, you haven't. If your brand is successful, that just means that you might get the right client in the door, right? If you get the right client in the door, that's just the start of a very, very long process from when that you start talking to that client till that client moves in, and then how does that client speak to people after you're gone? Correct, because your last client is your next client, essentially. Yes, so how you're describing it is is is is like it you have to be a business person, you have to be across everything, but more importantly, as a businessman, you can never take your foot off the gas. No, so even when things are good, you you're still working hard. You're looking instead of looking previously, we used to look three to five months ahead or six months ahead with projects, we're now looking in mid-2027. That's the difference for me. It's like now I've got time to look at the business rather than like I'm working on it rather than in it, if you know what I mean. Yeah.
SPEAKER_02Yeah, and my other observation is um make the hard phone call first. Don't you know, but it's always something that you don't really want to have to deal with as a human being, and our spokes are worse than women, um, in that we'd like to avoid things if we can. Um you're better off pulling the the band aid off and and dealing with it. And it's never, never as bad as what you think it's ever going to be. No, you just get into it. Yeah. Whereas over quicker than you expect it. Yeah. So many people get caught up in the inertia of of worry. Um, and you're better off, you know, once again, being the professional and people appreciate you for it.
SPEAKER_01Actually, touching on that, I'll go sideways again. One thing I would say to younger builders, right? I learned this the hard way. If you have a fuck up on site and something's wrong, right, don't dwell on it. Get stuck in and fix it. The longer you leave it, the more money it costs. That's a fact. You can procrastinate on it and you can argue about it and you can go around in circles on it, right? You know in your heart and soul, if it's wrong and you're responsible, just fix it. Stop messing around, get in and fix it. The quicker you fix it, the quicker the problem goes away and you can move on with life. And the less the will cost you. Absolutely. It it it the problem is not going to go away. Nah. It is not going to go away. The problem will be there. So just jump in, get it sorted, move on. Like, yes, it's going to cost you money, but it's going to cost you more the longer you leave it. Like, and your gut feeling will tell you, no, this is not my fault. I am fighting this. Your gut will. But if you're procrastinating, it's most likely that it's probably your fault and you're probably going to fix it anyway. So just get on with it. That's something I had a problem with for the first three, four years. There are any small issues. You know what I mean? Small, small things. There was never a major. I was very lucky, but those small, small things, they're in your head. They're here and they're taking up space that you just don't have. Yeah.
SPEAKER_00And Alex, can I go on about awards now? Yeah, mate. I was at the uh HIA Future Homes Forum and Green Smart Awards last year and saw you bikes clean up. So tell us, what's your secret? What's your secret source? How are you winning all these awards? Yeah, I want to know this.
SPEAKER_02Yeah, look, I I was actually involved with the awards as a judge before um we were at entrance. Um once again, I it's doing the the homework before you you start anything. So I really enjoy judging for the HI. I would have judged with probably 10 different other judges. Um in all of that time, I've no the judge and I have never disagreed on any project being the best project. Um so it's just understanding that there is uh value and integrity behind the program and being a member of the the HIA uh as you guys are with the uh Sustainable Builders Alliance, unless you're active within the industry, there is no industry. Um so um I think the first anyway, I I really only started um entr entering in 2008, and in it's in 2008, or since 2008, we've won the HIA Southwest Home of the Year Award six times. Um I think the most in the other builders won is twice. Yeah. Um fortunate enough in 2024 one of our homes then went on and won the state award. Yeah, the international award. Yeah, that was uh the home the um state award. And then um as you alluded to, um we hold the HIA Sustainable Home of the Year Award at the moment for this for Australia.
SPEAKER_01Yeah, it's some feet. You've won won over 70 awards.
SPEAKER_02Uh 88. I did the count for it.
SPEAKER_01Holy shit.
SPEAKER_02Yeah. That's insane. Hmm. And yeah, that's all since 2008. Are they all HIA? Yeah, all HIA. I I made the decision early in the piece to um that uh whilst I initially was also an MBA member, it was more towards commercial than residential. Um, and we whilst we were originally Torwood Constructions, I have rebranded about 10 years ago to Torwood Custom Built Homes because um I wanted to people have no misunderstanding what we do. Yeah, gotcha. Yeah, yeah, right. Don't ask me to explain what the Torwood part means. That that I have no idea, but I don't know. We are custom home builders. Is it your name?
SPEAKER_01You branded the company, yes. Originally, yeah, yeah. Yeah, yeah. Okay. So let's delve into like over the years, you're gonna have seen some changes, man. Like tell us what's what's the more the major changes. Talk to us about a few major changes you've seen in building trends in Western Australia. Obviously, you're you're based here. So tell us about trends. Where's that at?
SPEAKER_02Uh yeah, the trends, a lot of uh concrete being used, and certainly uh reliance on double brick construction um has changed a lot, particularly in the southwest. Perth with uh project builders, still very much double brick, but in the southwest, um it's a lot of uh composite construction. Yeah, uh probably the biggest change, Brian, from a uh rural builder's point of view, is that timber sub floors construction is really almost obsolete now because of bushfire and energy efficiency reasons. So nearly everything is is slab-on, Phil. Yeah, yeah. Big cost difference or not? Um depends on the site, I guess. Yeah, not really. I think it's no, I don't think so. It's just a different it's just a a total change in the um the romantic look of a um of a residential of a rural rural home.
SPEAKER_01So if you go from 1998 to 2026, architecturally, so you've won so many awards, you will have seen the difference in architecture as to what's winning and what's not.
SPEAKER_02Uh I think as as I've alluded to, the best homes and the best product will win. So it's on quality rather than an aesthetic. Yeah, it's largely there are some anomalies on the um on the award forms, um relationship of a garage to a home, you know, you get three or four points for that. And on rural properties often don't have a garage. Yeah, yeah. Um so you can put so there are a few anomalies like that they probably need to to adjust. But once again, the judges will always see the and award the best product. Do you have a favorite favorite home? Yeah. Yeah, I think about that a fair bit because we we produce-the one you're sitting in. Yeah, it's pretty damn good. Hadn't thought of this one. Um yeah, there there are a couple, and we've been fortunate to work with Dane Richardson from Dane Design Australia, he's based in Dunsborough, and I think three or four of the homes that have won the home of the year he uh he designed. Uh so um, yeah, always very excited to uh to build a home that Dane's designed. Yeah.
SPEAKER_00Right. So Alex, you work at the generally the luxury custom end, it it seems clear. What sort of role does energy efficiency and sustainability play? And I suppose how's that emerged over the last well, few decades that you've seen?
SPEAKER_02Oh, certainly changed changed a lot. Um, and uh Brian's mentioned Witchcliffe, so we're very active in the Witchcliffe Eco Village, and that's been a real joy and honour um to be able to learn the building techniques that obviously people smarter than myself have spent a lot of time um researching and developing. It's just a simple thing of um having a a baton on the outside of a timber frame wall so that you can do the the thermal break correctly in the and the wrapping, and the wraps have obviously improved improved a lot, which allows for um uh greater R value in wall insulation as well. So the homes have become uh um a lot well they've been designed now to last 70 or 80 years, which is obviously the the best way of um increasing um the sustainability. Um if you're building a in the last five years I would have um we would have d demolished five homes that were only 20 years old. Yeah. Um and you know if you really care about the planet, um trying to s um build a home that will last uh 80, 100 years is is the best way.
SPEAKER_01Yeah, yeah.
SPEAKER_02This is the best form of sustainability. Yeah, and that and that comes down to designing them correctly at the start so that they are livable for generations to come.
SPEAKER_03Yeah.
SPEAKER_02And that could withstand the savages of the uh Australian climate.
SPEAKER_01Yeah, yeah. And then material choices and everything like that, is that something you guys really focus on, or is that a present to the client and see what they choose?
SPEAKER_02Yeah, it's interesting. Uh because a lot of our um the homes we have built have been designed by other people in the past, we will effectively build what anyone wants. Now that uh Jenna's on board doing the designs, that's really starting to change the focus of the company, and we're getting much more involved in um in our own uh design and research.
SPEAKER_01You seem to do like your your cladding systems, and you're you're predominantly timber frame, um, and your cladding systems you use a lot of natural timber claddings and everything, so you your your sustainability is pushing really hard, and they seem to be you know, they seem to be collecting awards as well. You know, those yeah, those those are beautiful looking homes. Um thanks, Brian. So I'm gonna go again a little bit left field. Tell tell us a little bit about the challenges of staff. So you had 42 people, and then you went to three people, and now you're back up to six supervisors plus. So I can't think of how many people you would have directly or indirectly employed. But can you talk to us about like the challenges of staff being in the Southwest? Geographically, that's difficult enough. Um, and then apprentices and trades. Tell us what the what's going on now? Like, how do you deal with that?
SPEAKER_02Interesting enough, because I'm not a carpenter, I've never thought we could have carpentry apprentices because basically we don't employ direct employee our uh carpenters. But through being um heavily involved in the HIA, if I finally twigged uh about five or six years ago how the HIA apprenticeship scheme works. Effectively, the HIA employs the apprentice and then they're a labour labour hire company to the builder. So we only pay for the the apprentices when they're on site. Um so normally we run about five or six apprentices since then, and certainly we've got most of the uh um carpenters who have come through the apprenticeship scheme now still with us. So it's been a really, really good way. Like every builder in in Australia says, you know, they can't find carpenters. So it's allowed us to to build our own loyal team. Yeah, they've been trained by our supervisors and our carpenters, and then they've uh matured and come on to uh um to run their own teams for us as well. So that from a a uh carpentry point of view, that's been excellent. As far as the um the staff, etc., one of the huge changes that has happened in the last few years is um how you employ people. We we're finding if we need a a staff member, we we run it through our social media now. Yeah, um seek replaced um print media, yeah. Um and now yeah, I I wouldn't bother with Seek ever again because you you just get so many um foreign people advertising and yeah, we we have a set skill set um of people who we need you know preferably to be in the southwest but also um who know the southwest and how to to build in the southwest. Yeah. So through our social media, you've you have a loyal um people who really love and respect your company and they want their um anyone that they know to be involved in tour would be a culture thing, isn't it? Yeah, it's a culture thing, and it it's been as a uh 61-year-old, it's certainly blown my mind a little bit, but um yeah, that I can't fight it, it's how it is, it's changed.
SPEAKER_01Yeah, yeah, yeah. It's it's a good feeling though. Yeah, it's a really good feeling when you get good culture. Like people want to succeed, and people want like fresh people coming in, they want them to succeed as well. And if they're not, if they don't fit, you'll know about it pretty quickly, you know. People will let you know, but it's a good thing. Um, and yes, I agree. Um, I think AI is an absolute scourge when it comes to looking for new people. So we don't like seek now is just AI generated CVs, and yeah, it's the same stuff over and over and over, and just it's the knowledge is not there.
SPEAKER_02So you can't even even with uh the last ads we've done on social media, we're getting applicants from all over the world that they're obviously using AI tools that are same that are doing anything. Oh, just yeah. So it's really yeah, we are always just saying WA based only.
SPEAKER_00Yeah, yeah, yeah. So so instead of using Seek, you're doing social media ads for roles.
SPEAKER_01Yeah, correct. We did the same thing, yeah.
SPEAKER_00Yeah, gotcha. Yeah, right.
SPEAKER_01Our last one was a scheduler because uhine's fortunate enough to be taking uh maternity leave. Oh we had 110 applicants through seek, and then we just closed it. Yeah, there wasn't one applicant. There was like 110 applicants through seek, not one of them. One, not oh really, oh man, and I can tell you, we looked at them, there was probably 55 of those CVs were identical. Yeah, yeah, yeah. The name at the top was different, yeah.
SPEAKER_02And you can imagine uh from someone of of of my philosophy that everyone's touch point retorta has to be positive. How do you know whether you're dealing with a real person or yeah, uh a bot, and yeah, in the end I just had to delete them all and because like you just can't deal with it.
SPEAKER_01We did that, we did exactly that. We ignored every single one of them. We just turfed them all, we went out on social media, and that's how we got. We got really lucky. We had a really, really good guy on board through social media.
SPEAKER_00We we we just did put an ad up on Secret Site Manager, we got 188 applicants. Um and yeah, I mean, yeah, the the we got we got the suitable applicants we needed, you know, shortlisted to there was about 10 or 12, yeah, really specifically suitable for the work we do have done similar work. Um so yeah, it seems to I think it works more for that. I don't know, the the more managerial type of roles, perhaps. Um where you can see yeah, where you know the sort of companies that they've worked for. You know, you you can identify local builders that they've worked for that are similar to us. You know, then they're not a bot, of course.
SPEAKER_02Also different when you're in a city of five million people as opposed to a region of yeah, right. Big difference, big difference, yeah.
SPEAKER_00Absolutely. But but that that also but that 188 applicants probably tells a story of where Melbourne's at in terms of you know amount of work out there, it's just not there. Yeah, yeah, yeah. We we ran an ad well uh had an ad on seek again for a similar position in 2022 or 2023. We've got about 30 applicants, the same role. So yeah, it's still very challenging times in this part of the world.
SPEAKER_01Yeah, but out of that 188, I honestly think that there's an AI and there's apps and all this kind of stuff now where you have like foreigners that are coming in, and I'm not having a go here, I'm just saying they're coming in and they need a job for a visa essentially. So they're just applying to everything through AI and apps, and you're getting 60 to 80 of those applicants.
SPEAKER_00No, we probably only had like 10 or 20 from overseas.
SPEAKER_01There was no, but they'll be no, they'll be here, they'll already be here, but they'll be in college.
SPEAKER_00Now that I actually stayed from the Philippines, Africa, there's a few. Yeah, yeah.
SPEAKER_01Yeah, yeah, anyway. We've got two questions left, plus our quick fire, so we need to be we need to hustle. Yeah, yep. You gotta go, right? All right, we'll skip to the last one. Um, quickly, uh Alex, if you can. What do you think needs to change in the industry, Matt? Be it culture, education, regulation, what is it? What do we need to change, Matt?
SPEAKER_02Uh I think more transparency on the home uh owner's warranty uh at all levels does need to be changed. Um you shouldn't have to ask what the rules of rules of the game are. They should be spelt out a lot better. Yep. Um if you I'm not sure on the NCC whether that's another question going to ask. One thing that I'm I'm still baffled by is why do we have um Australian standards that cover the building industry and the National Construction Code? Why isn't there just one document or one body that covers all of our industry? Because certainly um when the company was larger last time, we we really worked on trying to have to find all information together for our trades and our supervisors so we can have a document that we could build by. Yeah, but it's such a mindfield once you you think you've got the construction code nailed and then you start looking at the um the standards, the standards, and just it they conflict. That yeah, it's uh so I think that's a a no-brainer, and that the cost of obviously running both isn't logical either.
SPEAKER_01No, no, no. It it's it's that that is a tough one, man. There's there's no there's no easy answer to that. And I we've so often Simon have spoken about this several times. We've had a guy on talk about the NCC, but this is yeah, it's me, and it's only going to get deeper and worse. It's just going to get more and more complicated and convoluted, and it's they're just introducing more books and more rules, and yes.
SPEAKER_02And I don't mean to be pessimistic. Uh through my experience, I I'm of the opinion that um you have to be the master of your own destiny, and don't expect that anyone's gonna um make your life easy, you've got to be the best you can.
SPEAKER_01Alright. So we'll um we'll jump into the quick fire questions then, if that uh if that's all right, Alex. Absolutely. Alright, who's the most famous person in your phone book?
SPEAKER_02Uh the world CEO of Multiplex, who we had the fortune to build for, um, which obviously could have gone one of two ways. Um I reckon. Yeah, but um he and his wife and family are absolutely delightful people and just so full of gratitude for the the work that we did. Um, and uh that's a really good lesson to learn on how to be humble and appreciative no matter who you are.
SPEAKER_01Yeah, right. Favourite sporting team?
SPEAKER_02Uh Fremantle Dockers. Yeah, you go to Dockers.
SPEAKER_01This is our year, mate. Well, yeah, I was gonna say that's for my sins, Brian. It's it's hard being a Docker supporter. My goodness. It is hard. Uh passive host or passive solar design?
SPEAKER_02Uh passive solar. Uh right. And once again, in our climate, um, there are certainly parts of WA that um uh get much colder than where I live, so yeah, passive solar seems to be the most logical. Timber brick or alternative construction? Uh I'll go alternative. Um I'm a little surprised that I'm actually living in a double brick home, which every other home I've ever lived in has been timber framed. We uh we're in Bunbury and Bunbury does suffer from a couple of tornadoes every few years. Yeah. So I've actually got a uh a concrete roof. Um and um uh it's quite a Moroccan themed home. So it was the the look the aesthetic and also um something which will mean that I can uh be here when I'm in my old age and not be fearful that I'm gonna lose my my roof. And also it's a pretty cool box though.
SPEAKER_01Yeah, it's bloody hot. Um are you gonna enter that one in awards?
SPEAKER_02Uh yeah, it's it we're in an interesting stage and we've got um two other homes that we'd be up against from our own company. So I think pr predominantly we'll um nominate it for um the design. Okay. Because we uh favourite music? Uh look, I'll go with Colin Hay. Okay. Tim Tam or Anzac. Ah Brian, you're gonna like me. Definitely, um, definitely Anzacs. Absolutely. I'll agree. You strike me as an Anzac man. I don't I don't understand Tim Tams.
SPEAKER_01Yeah, I don't I don't know. Look, it's horses for courses, I guess. Indeed, yes. I'm just gonna say the more intelligent people that we have on tend to always pick Anzax. That's all I'm gonna say.
SPEAKER_02And free man or doctor support us, apparently too.
SPEAKER_01Yes, unfortunately. Alex, thanks so much for coming and have a chat with us, man, and thanks for taking the time out of your day. I know you're very busy. Thank you very much. Have a good one. Thank you. Really appreciate it. Thanks, Alex. See you soon. Thanks.
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