Stop Guessing Your Margin with Jeremy Sloane

Reece sits down with Jeremy Sloane of Sloane Construction Company to talk about job costing, cost codes, and why clean data is the difference between protecting margin and getting blindsided. They get into hiring lessons and the simple systems that keep projects on track. You’ll walk away with practical ways to tighten up billing, align your cost code “language,” and price future work with confidence. If this helps, subscribe and share it with a builder friend who’s tired of guessing.

https://www.sloaneconstruction.com

Show Notes:
00:00 Intro and why job costing matters
01:12 Jeremy and Sloane Construction
06:12 Luxury costs explained
09:04 What scale takes
13:13 Hiring burn story
17:36 Builders helping builders
21:31 Daily logs system
24:31 Remote coordinator shift
35:41 Growth without chaos
44:34 Rebuilding pay apps
50:31 One cost code
55:07 Burden rate reality
56:54 Wrap and takeaway

Find Our Hosts:
Reece Barnes
Matt Calvano

Podcast Produced By:
Motif Media

Transcript

0:00

Job Costing and cost coding is probably, single handedly, the most important piece of the financial puzzle. If that money is in the wrong bucket, when I go back and look at my historical data, I could be off when I budget a job by 1000s and 1000s of dollars, knowing your numbers really matters. Welcome to builders budgets and beers. I'm Rhys Barnes and I started this podcast to have real conversations about money in the building industry, the wins, the mistakes and everything in between. I believe builders deserve to feel confident about their finances, and that starts by hearing from others who've been through it too. This industry can be slow to change, but the right stories and the right tools can make profitability feel possible. Let's get into it. All right. Mics are hot. Jeremy rollin, awesome. Thanks for jumping on the show, dude. Of course, happy to be here, yeah, we didn't it was, it wasn't that long ago when we saw each other last build show live. Was that middle of October, yeah, middle of October, yeah, almost exactly a month. That was great. Almost exactly a month. Okay, well, cool again. I'm really excited to have you on the show. I think you've got a lot that you can offer the audience here in terms of just the experience that you have accrued over the years, but as normal, let's go ahead and jump in and give a listeners little background on Jeremy Sloan. Sure, so I'm Jeremy Sloan at Sloan construction company in Palm Beach, Florida. We've been in business for 43 years now. My dad started the company in the early 80s, been involved for the last 11 years now, which is crazy hard to believe it's been that long. Started as a superintendent, actually, way back when started as labor. Worked my way up through the ranks. Superintendent worked in the office, project management, now sort of an ownership role and business development and all the good stuff we do, high end luxury residential work, remodels, new construction, and yeah, we're happy to be here. I love it. I love it. And for the listeners, you need to check Jeremy out. Jeremy, what's your website? Sloan construction.com, it's s, l, O, A, N, E, construction.com, I love it. And you guys got to check out Jeremy's work was when he says high end luxury is 100% high in luxury especially. And I always get this mix up, is it Palm Beach or West Palm Beach? Or is that there's two different things, two different things. So we do most of our work in the town of Palm Beach, which is a small island just east of West Palm Beach. Our offices in West Palm but now we're expanding up to the northern part of the county and into Martin County, which is the next just north of us, and we're doing work as far south as Delray next year as well. So we've expanded a bit in the last couple years. You guys are growing, moving and shaking. What? What do you attribute the growth to, and why those counties? Why those different areas? So our area, specifically, since covid has really seen an enormous amount of population growth, growth, and a lot of it has been in the high net worth individuals coming from New York and Chicago and all kinds of different places up and down the East Coast. And so I think Palm Beach used to be Palm Beach Jupiter Island. It was very limited as to where that kind of work existed for a long time. And now it's just exploded. And it has moved off the island, off the islands. It's Gone West, it's gone north, it's gone south. There's just a ton of there's a ton of money in our area. And it's we're just trying to, you know, grab our little piece of it and go with it. I think that the islands themselves, both Jupiter Island and Palm Beach, have a lot of restrictions around building, and it's been a little bit challenging to sort of navigate those changes and those restrictions as they've occurred and gotten, you know, more and more restrictive. And so we're just, we've kind of looked other places. We've had some success in other parts of the town or other parts of our neighboring towns, like, it's, it's just part of it. It's been, it's been fun to kind of expand and get out of just the island of Palm Beach 100% and so, okay, so this is just largely driven by your customer base, like your customers coming to you, saying, hey, like, I want to build in this area. Or do they have lots bought? Or is this, like, are you pushing down original structures and building where they were, like, what's the makeup there? All of the above. So we, we don't do anything on spec. We are 100% custom builder. We don't own lots. We don't, it's none of that. We are 100% like custom infill. You know, client has a lot, or client has a. Else they want to remodel. We have two new projects starting beginning of next year. One, we actually just tore down an existing structure on which finished yesterday, and then one that we tore down earlier this summer that will probably start a new build that will start in about February or March. So, yeah, it's just, it's just been expanding the client base. I think the like when my dad started in the 80s, I think that high end super demanding, like quality work was, was was very, it was very focused in Palm Beach and Jupiter Island. There were some areas further south, some areas, you know, further north. But it was, it was less when you were in West Palm Beach, or were you in Palm Beach Gardens, the towns hadn't fully developed yet back in the 80s. So, like, it just wasn't. It wasn't as popular as it was, as as it is today, and therefore this kind of luxury work didn't exist yet, and now it's just, it's like taking the world by storm. That's insane. Okay, so when you say, like, the luxury work, like, I guess, how do you like? How do you put a thumb on it? Like, what? Like, what have you seen from a gross from a gross game? I mean, is it like that? Like, the average home price is like, 3 million, 4 million? Are these like, 10 million? Like, how big are these homes? What makes them that much different than what they were? I mean, our I mean, when I first started, the first house that I built as a superintendent was on the island of Palm Beach. It was probably a 4000 square foot house was an infill lot like a small pool, beautiful, you know, high quality construction. We built it for $500 a foot plus or minus, including a pool like all the, you know, site work and all that stuff. We just did one that was over 3000 a foot. That's insane. So, like, it's, it's just, this was 10 years ago. No, the first stop. So that, that house I did in 2011 15 years ago. Yeah, so 15 years ago, I built the house out of the ground for like, 500 foot, 510 a foot. And like my, you know, we're we're now averaging somewhere around 1000 to $1,200 a square foot. We don't price on a cost per square foot basis, but like after the job is done, that's sort of when you, you go back and figure out, like, what it actually cost per square foot? And that's kind of where we're at. There are guys that are doing their average is 2500 square, 3000 a square. I know of a job that's going around like 5000 a square. I mean, it's insane. It's insane. Dude that is nuts. How do you even get there? What like? I'm thinking like $5,000 a square foot. What like? What do you what are you putting I don't know. I don't know that those numbers to me even blow my mind, like I can't wrap my head around that. We haven't gotten to that point yet. I mean, it's just and I don't think that we will. I'm not, I'm not pushing for that, that part of the market, honestly, it's not my ideal client, so to speak, yeah, but some of these other guys that are around us in our market, they're, they're huge machines, and they can service that client and, and it's just starts with size. I mean, these places are, you know, 25, 30,000 square feet, sometimes bigger, big properties, multiple buildings, lots of site work, expensive landscaping, like, it's, it's a lot, yeah, okay, cool. Um, I was gonna ask, like, what do you think goes like, I guess I'll just ask, what, like, what does it take, from a business standpoint, to go to that level manpower, just hiring depth in an organization? Yeah, you can't like, it's like, when you have a job that's of that size, you can't manage it with one superintendent. You might have three. You have to have to have a dedicated project manager, a dedicated Assistant Project Manager. There's just, there's so much information that is flowing to you and through you, to subcontractors and material suppliers and all this other stuff, and it changes hourly, in some cases, that you just have to have good manpower to be able to handle the inflow and the distribution of information. I mean, that's literally what our business boils down to, is bringing in information from designers, architects, owners, whoever else, owners reps. Right? We have owners reps involved in our businesses. Then digesting that and then pushing it out to the people that actually are doing the work or responsible for providing materials or things totally well. And I think that's like where we can go from here, just with like the amount of growth that you have seen, albeit you're not building 5000 square foot homes, you are building houses that are 1000 square foot, 1500 a square foot, like, when you're looking at that growth over a relatively short timeline, again, 10 years, call it that you've been, like, really involved. We'll just start the conversation around what does that change look like? How have you had to change how you look at your business and where have you focused? So in the last, I'd say, really, five years, is when we started to transition from my dad's business into mine. Okay? And it was, it's not that, you know, he was doing very high end work. I think it was just a period of the time as to why it's gotten more expensive, I think details have gotten more complicated. Over the years, there's been a lot more architects, a lot more contractors, a lot more designers in our, you know, in our market. So there's more competition. So I think, you know, it's been a combination of a lot of things, but my dad ran a very lean business. He had one. He had a VP of Operations, which is basically as a project manager, traveling superintendent. That was with him for 30 years. He taught me everything I know technically about construction. He was a great resource, great friend. I mean, I grew up with him. He was, you know, another, another part of our family. And then as he got to the tail end of his career and his retirement, we had to bring in new people. I brought in bookkeepers, I brought in project coordinators. I brought in other superintendents, and like we've had, I'm not gonna say we've done a lot of hiring, but we've done enough that I've had a couple of bad experiences, learned from them, and, you know, honed in on the things that I look for now when I hire somebody totally and have really just focused on making sure that we bring in good people to do the work, and then I'm extremely involved in all of our projects. From a project management standpoint, I'm not on site every day, all day, like I used to be as a superintendent, but I'm, I tell every client I am your project manager. Like I'm involved in your project, I'll know everything about it, you know, if you call me, totally, that's how we operate. Okay, cool. So I think there's two things. First, I want to hear some of the, some of the burns that you've experienced. And then I want to, I want to know, like, your perspective on building processes, systems, as you've brought these people in, but we'll start with, what are some of the burns? Dude, what were some and, I mean, obviously we'll keep names and like stuff like that. You can share as much as you want, but I think the burns are important for people to be able to associate with. So I had I during covid, so 2020, 2021, we I we we saw an extreme growth in a number of projects, like everybody did, right? We took on six condo renovations in one summer and just so you know, condos in our area have a six month, essentially a six month window of when you can do construction. So you're not allowed to work in the season. You have very limited hours. There's no place to park there. They're complicated projects. Just from a logistical standpoint, I had no people. We had no superintendents to run all the work that we had. And so I went on a hiring spree. I hired three superintendents in that that year, one of whom I did not know he was, you know, came from the construction world, but came from a different arm of construction. Said all the right things. Knew all the software's, you know. And I don't want to say I bought into something that he wasn't, that he was selling, but like I I took him at his word. It didn't go well. It wasn't a great it wasn't a very well managed project. I'm also not gonna lie and say that I've had no responsibility in the matter I left him on an island. Sure thought, based on the the experience that he had, that I could Yeah, and the reality was, I learned very quickly that, like, I will not do that again. I There's a reason that I don't take on you. You know, 20 projects a year. It's because I can't be involved in 20 projects at one time, right? And that experience taught me that, like, I don't want to be, we keep it small, we have a team of six, and I get to be very hands on and all of it, and I enjoy that part of it, which, yeah, yeah, that's great. Um, when you say that you left them on an island, is that safe to assume that you mean like, there wasn't a lot of like, structure or outline, there was no there. We didn't have any systems in place. We were new to using a project management software that I didn't have enough experience on at the time. It was a new designer that we were working with. The project started late because of just, you know, when the client purchased the apartment, when they got their plans finished, and when we were in for permit. So we were we took a six month window and we shortened it to five that first season, it was a very detailed project, hard building to work in. It was like the perfect storm, and I and he and I didn't communicate enough on a daily basis for me to know that there was anything wrong until it was too late to fix. Yeah, we got through it. He finished that job. He ended up, he ended up leaving after, like, he kind of worked on that job for about six months, and then he he left a couple months later. We ended up finishing that condo the following season, and everything worked out fine, but it was just, it was a learning curve for me to go through. I had never, we had never missed a condo deadline until that job. Damn. Okay, so, yeah, definitely, like an eye opener, just a shot to the ego, which, I mean, frankly, is well, and you correct me if I'm wrong. But what my experience is, after talk to 1000s of builders across the country like, it almost seems that that experience has to happen, oh for sure, in order for the business owner, builder, to take action, right? Yes. Or do you think that there's a way that we can help the industry prevent from going down this like path of I've sold a lot of work. I need to get someone in here to manage it, and I'm not prepared from a business standpoint, so I'm just gonna cram someone in, and you're just, it's you're gonna lose, like, is there a way to prevent that from happening? So we've kind of talked about this a little bit off. I think you really like the building industry as a whole. We all want to help each other, like we all want each other to be successful, at least in what I've experienced and witnessed here in the last six, eight months. I think as builders, there's a lot of guys that are you get this reputation of being this, like, keep it all close to the chest. Don't share anything. Like, we're not going to talk to anybody, because somebody's going to come in here and steal my work. The reality of, like, even our local group of builders, I have, you know, four or five guys that I play golf with, we go to lunch, we're friends, like, and we're all in we compete against each other for work, but like And granted, we're not talking, we're not opening up the books to each other, but like, we're all sharing war stories about the same stuff with the same clients and the same projects and the same everything. And we learn from each other. And I think the other, you know, build show live was a great experience. I got to meet a ton of builders and talk to other guys, and they're in other parts of the country. There's no competition between us. If I can refer them work, I will find a way to refer them work, because they might have, you know, we might have a client in common. I'm part of another organization, Breakthrough Academy, right they it's a group of builders. I've already referred a client of mine that I'm building for right now happens to have a house up in the Northeast where another guy that was in my first little group works, and I said, Here you go. Like, you know, she's always complaining that she can't find a builder in your town. Like, talk to each other, I don't know if anything's gonna happen. Totally, that's what it's all about. So I think the more that we talk as an industry, the better chance we have of new guys coming up and not having to go through some of the growing pains that some of us have. Totally, I think it's I think you're totally right like opening up the conversation, which is why, thank you for sharing some of I mean, just the reality. It's just a tale as all this time, dude, it's like, you hire someone, you interview them, you go over resumes, you look at what they've built, they're all and they're selling. You're selling, you're selling the job, selling themselves, right? It's like, oh, there's gonna be great. There's. Gonna be a home run. And then it's like, Okay, now we get in and we have no standardization, no structure. You essentially, like, you start building a business with multiple businesses inside of it, meaning, and it's like, Jeremy's got a way of doing things. This guy had a way of doing things. The communication wasn't there. The process wasn't there. The expectation wasn't set. And that's where you feel the pain, yeah, and you have to learn some of that the hard way. But I don't think, I mean, we just have to listen and we have to talk to each other. Because I think if somebody had, if I had somebody, like, even my dad and I are in this business, or we're in this business together, right? Like, but even the two of us within our own business weren't talking about some of these growing pains and some of these things. It was just sort of like, this is the way we do it. And he had a great partner in a project manager that was with him for 30 years, right? Like, how often do you have guys that are with you for 30 years you? The reason you do things as a company is because of that great employee. Well, not everybody is going to be that great employee, so you have to be built for the sort of middle of the road, and then when you get somebody who's incredible, right? Like, then you push your standards and you push your systems and develop it further. Totally, totally, okay. Well, so let's talk about systems. So what have you like? What would you say is probably the most like, the important component of your business that you've focused on building processes and systems around. Man. So the the biggest, one of the biggest challenges that I think I cannot, I guess I can't speak for everybody, but that that we've had as an as a construction company, has been getting good information out of the field to the office, whether that be to qualify bills that come into the office, or to estimate the next job, or to justify to a client why X, Y and Z had to be done on their project that was beyond what we originally budgeted, or to an architect or to A designer, etc, etc, right goes down the line before so we were we brought on a project management software in 2120 2020, and it just didn't. Nobody bought into it. We tried. It got better. We were, we were with that company until, actually, very recently. But one of the one of the most important systems that we developed is like, daily logs are no longer an option. Your as superintendent, your daily log is part of like, it's just, you have to put one out every day, even if something didn't happen. I want to know that something didn't happen and why didn't happen. It could be because it rained. But, like, I don't want to go back into the history of the weather report to figure that out, right? It should be in our software, right? And then from, sort of from that we put out a week we put together a weekly update for each project, which is a list of what happened, a list of what is going to happen the next week, and then any like hot button items that we need from the rest of The team is not us. So architects, designers, owners, decisions that we need. Why did an inspection fail? What does the town require out of us for X, Y and Z, that we need an architect to provide a drawing on or something to that effect? So it all kind of starts with that daily log, and then it spiders. From there, we have a project coordinator, Assistant PM, that works fully remotely, and she can't be on the job. She has to get information from the field in order to know what to do for her job. So without those daily logs, she can't put together her weekly update, which means our schedule doesn't actually reflect anything that's happening in the in the field. So that's, that was one of the biggest things that changed for us, I think, in the last two or three years. Do you think that you kind of, I mean, you've kind of brought this up at the like, the end of it, which all this is beautiful, like main or mandating, building into expectations, these very fundamental needs of daily logs, right? Just as example, but you kind of touched on quickly that you'd hired a project coordinator that has done remote was that done strategically to help enforce the. Capacity of software was that just more of like the outcome with this individual being remote. So she actually was not hired as a remote employee. She was she was hired as an assistant. PM, she worked in our office for two or three years, and then her life choices decided to take her out of our area. I was I, She's incredible. I absolutely love her as an employee, and she knows it. And so I was like, well, we're gonna try this. And I'm not gonna lie, I was extremely nervous, not because, like, she couldn't handle it, or she couldn't work on her own, but I was just nervous about how that was going to go to have somebody not here, she is still in front of her computer six to eight hours a day. She might work at some odd times that, you know we're not in the office, but she gets her stuff done. She we do zoom calls, we do phone calls, we text all we're still communicating as often as we were before. She's not sitting in the office, and it's worked really well. I think that I was very hopeful that she would sort of grow into a different role that I think she can't grow into, not being local, but I think she has developed a role that I didn't know I needed. And it's, it's just as valuable to me, totally, as where I thought she could go totally. No, I do. I think that's great. And I think that, you know, it doesn't always have to be calculated, right? It doesn't have to be like, this big, like, strategic thing of like, Oh, we're gonna hire someone remote that's gonna, like, force us to use software, right? But it just highlights, and then it accentuates the need for it. Correct me if I'm wrong, but now that your team is bought into software, right, and that they're using, again, going back to daily logs, daily right? And that's impacting all the other things downstream, feeding into a weekly, monthly, quarterly report and making sure everything's updated and we're much more aligned and communicative and sharing more knowledge. Would you say that you could have done that earlier than you did 100% Yeah. And what was even if, even if it was done on pen and paper, we could have done it right like then what kept me from doing it? Ah, people, I don't know. I mean, I don't think I so. I guess when I 567, years ago, before I sort of came into the role that I'm in now, where I really am. Pm to all projects. I don't really care what was happening on other jobs that I wasn't involved in. Those clients weren't calling me asking me questions. They were calling my dad and asking him questions. So it was whatever system worked for him. I think he still always wanted more information out of the field than he got, but he figured out what worked for him. And I've I've figured out what works for me. And I think as technology, like we as an industry, we as a construction industry, I think are really late to the Tech game, totally undoubtedly. I mean, like iPads and iPhones and, like smartphones and in the field, didn't exist, right, just a short time ago. I mean, the first, the first house I did as super, what, 15 years ago, I didn't have an iPad. It didn't do anything. Yeah. And so today, now that you have digitized drawings, you have, did you know digital everything, and we're a walking computer, right? Like it's easier to get that information than ever before. My superintendents don't come into the office like I have two desks sitting there for them to plug in their laptops. They don't even open their laptops. They're on iPads and iPhones all day, like my when my dad was doing it with his gut, with his crew, like every day, at four o'clock, everybody came into the office, yeah? They talked this face to face. They talked, yeah. My dad would go home, he'd have dinner, he'd go back to the office to do work, right? I sit down at my laptop in my living room, and I can do just as much stuff as I as he could sitting in the office. Yeah, like times have changed. So I think our needs, while our needs may have always been the same, the way that we go about fulfilling those needs is different totally. Do you think that there is. Yes. Do you think that things are missed by not having the four o'clock face to face sit down with themes, or you're essentially suggesting that it's not it's done differently. So like we have more strategic meetings, we we do a specific scheduling meeting where we go through, you know, all the projects and, like, what's lingering, what's not I meet with the superintendents on a daily basis. I just go to them. I go to the field because, like, I can see a lot from the daily logs, and I can see a lot from the photos, and I can see a lot from everything they put on. But like, there is still something to walk in your job, right? I can't, I can't effectively run a job completely, remotely. It's just not possible. And so I think it's and I don't want to ever feel like my team, like my guys feel, I don't want them to ever feel like I'm not a part of business. We still, you know, even just to show your face and, like, talk to subcontractors and see the guys in the field and ask how they're doing, and it keeps them engaged in the business, in the industry, and like, with us as a company, right? We're not the biggest company that some of our subs work for, but, like, I try to treat them all in a way that is respectful and is always valued and whatever. So that, like, they want to work for slow construction, right? And like, we want them to be successful too, because they're, they're essentially an extension of us. If they don't deliver, we can't deliver, right? And you can get that done. I mean, again, it's not like you guys are just like, Nope, never see my guys. I'll see him every once a year. Every day you see, yeah, we talk every day. It's just that it was, it was very like, guys had to come into the office to get the information from the field to the office. Today, the information is flowing to the office, yep. But like, I still want to go in the field. I still want to go see what's going on. I still have to put my eyes on stuff, because when a client calls me, like, I need to be able to explain to them why the ceiling in their kitchen is six inches lower than you know, it was two weeks ago. Like, why didn't drop the ceiling in there? Well, because your air conditioning couldn't, you know, had to be run from across the house, or, like, I don't know, whatever, but those are details that, like, I need to put my physical eyes on, you know, for when clients call and architects call, and all the things that you know come up. Totally, totally. Well, okay, so, and it sounds like, I mean, this is all like something changed for the better. Honestly, it is, it is, I think it's, it's made us more efficient, like we can obviously do more volume with the same, if not fewer, people as as a management company, right? We're construction managers, right? We're not physically, we are not physically self performing any work. I do have one carpenter who is like sort of a miscellaneous Swiss Army Knife kind of guy, but he's not trimming out a house for me. It's all subcontracted work. And so like now we can, we can really manage a lot of revenue with a small team. What we what it's done for us. It's, I've started to go after fewer projects on a quantity basis, higher revenue on each project, right? So if our average project size was, you know, one to 3 million, now we're five to 10 changes your revenue, but you can still do it with one superintendent on each job. Even the $1 million job needs a superintendent totally. And from my perspective, yeah, well, okay, and that's literally I was gonna go because I was, like, a lot of this has been like operational project management, right? Like just the internal processes. But what have you seen that impact, not just from a top line standpoint, but a bottom line standpoint? Have you seen with these moves an impact on the bottom line? Yeah, for sure. I mean, in the last since, I mean, some of it is covid. Covid was, I think, hugely impactful for our entire market. And I think we're still seeing the effects of that. People are still moving to Palm Beach County and the neighboring counties in droves, it seems like, but I think what that there's not enough, there's not enough builders to, like, we have a lot of competition. There's a lot of builders in the area, but there's still enough work to go around. Yeah, and the quality of the work, like, where there used to be one $20 million job every year, now there's 10. Right? So like there's enough to go around for everybody, and we're fortunate enough to be selective of the types of projects and the people that we get to work with. If I wanted to go out and hire 20 people, we could do that, and we could do more volume, like a lot more volume. I don't want to. I'm not trying. That's not one of my goals. Personally, I don't want 20 superintendents and 10 project managers to work with. I feel like I would lose touch with our projects that I don't it's something I don't want to give up totally, totally well. And I think so, I think, like, a couple questions, like, kind of going back to the bottom line standpoint, but like, like, what are your goals? Like, when you because you kind of, there's this, like, old adage out there is, like, if you're not growing, you're dying, right? And I don't know how translatable that is to construction, because I see and talk to a lot of builders, one of which I was just in Chicago with, and he's like, he's running like, six, $700,000 a year in top line revenue and remodels. But he's runs extremely lean overhead. He's hauling in like a 30, 40% margin, which is like, essentially going to him. And he's just like, he's like, Dude, I make more money, like, lessening my risks significantly than these guys that are doing 1015, $20 million in top line revenue. So like, that goes back to like, with your goals and like, how you evaluate, like, the success, the health of the business. Like, what are they? Why not go out and chase that? I think a lot of it is just personal value system, right? So like, I I really, like, I don't want to, I don't want to call it work life balance. But like, I really like the idea that I am not working seven days a week, 150 hours. Like, I work hard. I work a lot. I work it's always on my mind. So even on Sunday afternoon, when I'm hanging out with the kids at the house, like there's stuff running through my head about the business, of course, but I like the fact that I am not having to be glued to my computer. 24/7 I know, and I still get to maintain a level of connection to all of my clients and all of our clients and all of our projects. I get to be the face of it all with architects, designers and clients. That's that's something that's very important to me personally, and that's just how I operate, right? Somebody asked me a number of years ago about like, who can sell the business better than you as the name on the door, and it's it's kind of resonated with me like nobody, right? Because part of what I'm selling is me. I'm selling my existence in your project and in your life, and what we do for you is, you know, we're, we're in a relationship with these clients for a minimum of two years, and then long after that, when they want to renovate something 10 years from now, or they want to their their their kids, buy a house neighborhood, or whatever. So like that relationship is direct with me, and I always try to, you know, make that a priority totally, I think, sort of inadvertently, because our average job size has grown, we are growing, I would say, comfortably, at a rate of 10% per year in top line, revenue, money and like, if I can do 10% a year more with the same team, everybody on the team benefits totally. Like, one of my goals is to make my superintendents more more money. Like, I want them to be more successful, right? If they're more successful, they're going to stay with me longer. We're going to get to do really cool stuff over the next 10 to 20 years together. Instead of having to go through the whole hiring cycle again and reteach a whole bunch of guys like my standards and the things that are important to me as a builder, I would rather keep my own team and just, you know, add as needed, and like, we'll all make more money. Totally, the money is out there if you're not, like, blowing it, right, if you're, if you have, if you're paying attention. As a contractor, like, there is money to be made. You are providing a service that is valuable to a client that not everybody can do. And like, if your subs are on board with with you know, your quality standards, like, there is money to be made. And I think as long as you're paying attention to the money in and the money out, you're going to make. Money in this business. I don't know how anybody makes 40% margin. I wish I did. Yeah, well, it's like, these are like remodels, right? Like, these are like remodels, like high end remodels, like, literally, like a one man show, and he's like, go ahead. I just, I mean those, not those margins. I've heard those margins be thrown around, like in in my Breakthrough Academy stuff, and build show with you, like, I just, it's shocking to me, because I I can't imagine it, but I don't need to write like you're doing we're doing great. Like you don't need to be hitting 40% margins. Would it be cool, sure, but I'm not going to sacrifice any part of what the product that we turn over to hit a margin number just for the sake of hitting a margin number. Right? Totally, totally, no. And I think that, I think that's like a really healthy perspective. I think businesses that operate in that lane of I'm shooting as a new construction for my eight to 12% margin, right, and as I grow, I want to be stacking on 10 to 15% year over year, steady growth like I want consistency. Those are the businesses that impact communities right impact individuals. Think about, if you think about custom, high end residential construction, the process, in it of itself, is slow. So to expect that, like my business growth is going to go through a 30 to 40% per year jump. It's just not realistic, because it's not sustainable in my in my view, right? Yeah, if there are guys that are doing it, I don't have any interest in it. Personally. I'd rather be the like slow and steady wins the race. We've been around for a long time. I plan to be around for a long time going forward like it's just, you know, one of my subcontractors says it to me all the time. He's like singles and doubles. That's right. Just needs singles and doubles, right? Yep. Don't need every job to hit a home run. Occasionally, one will. But like singles and doubles. We do good quality work. We develop good relationships with our clients, good good relationships with our trade partners, our architects, our designers. Like, I want to be the person that they call when they have an issue on a project that's not even mine. Like, I want to be a resource for people totally and the work comes right? The work comes from that, right? I think it's a self awareness, and you're acing it, right? It's like you have got to be self aware on who you are and what you're wanting to accomplish. And if you are the person who's wanting to just, like, blow the roof off of it and 10x your business, you got to know what that's gonna look like and what it's gonna require. Like, I know builders that are doing that, but you also, like, that's not for everybody, and that takes a lot of commitment with a completely different view on how the business gonna operate. But again, I go back to and like, that's where a lot of my passion comes from. Is like, just promoting and providing a resource to the small business owner, because that's what keeps the wheels on the track. In my opinion, in the communities it employs people, it betters what is actually happening from, from living quality and and presentability of environments. So I just think, I think you're on the right path. You made one comment that I do want to touch on, that I think is important. And in this thread of singles and doubles being consistent, just finding that steady growth is you made the comment of like, it's really just, if you're not blowing it and you're just, like, really focused on tracking, like, the money in and money out. Like, that is the biggest challenge that I see builders do, but that really is the opportunity in home building. And I think what attracts a lot of people to it is the size of product, right? Yeah, it's like, if you want to make more money, what do you need to do? You need to go sell a bigger product, right? It's like, and I'm in sales, right? Like, that's like, just like, the nature of what it is you want to make more money, sell something with more zeros. The challenges is, there's so much moving in and out of the business, and the game is capturing that 10 to 15% as it's moving in and out of the business. Yes, so I think, I think that's the biggest point. Go ahead. So I'll want, I'll give you my, my learning experience when it came to tracking money. So in 2019 2018 we had, my dad had a bookkeeper in his business, for she was with him for 25 years, and she retired in the midst of a very large historic landmark remodel that that my dad. I was doing. I was semi involved in the project at the time, but like from a distance, when she left, I took over all of the bookkeeping responsibilities. In addition to being a super being a pm on everything else we were doing, I went to bill a client. We bill clients once a month. We bill on an AIA, G, 702, G 703 doc, and I went to bill a client first of the month, and I stuff just didn't make sense. I couldn't I couldn't figure it out. I was like, this doesn't something's out of whack. I don't know what it is, but something out of life so and my wife can attest to this, because I think I spent 12 to 14 nights at the office till 1011, midnight, walking out of here in the dead of night, cross eyed, rebuilding 16 months of of pay apps throughout that project to figure out what the hell was going on. And it wasn't that anything was massively wrong, but it was money was miscoded. We had overbilled slightly, under billed, slightly, and it just the numbers weren't following what we had originally put together as contracts and with the owner and then subcontractor agreements like it was hard to track the subcontractor agreements to completion, right? So they bill 85 they show 85% complete on something that they were only 50% Complete on, and we would build to the client, and they eventually caught up. Or there were, you know, 10 change orders that were in there from the subcontractor that we didn't actually issue as change like it was just a whole bunch totally paperwork. It wasn't that the numbers were out of whack. I think we were actually, after I went through all of it, I think we were actually under billed to the client by like four grand, and this is on like a $9 million job, right? So we were, we were really, really close, right? But what I learned through that two to three week period was you have to know your numbers. Yeah. You have got to know as a construction individual, where your money is going, because every subcontractor writes it and bills it differently, and every GC bills it differently to a client, and it's all about presentation, but you get lost in that presentation. So I will, I will give my adaptive plug here, which is basically what has been enormously helpful to us, is we have tried to get subcontractors to bill us on the AIA, G 702 g 703 doc, because it is the easiest, cleanest way to track billing of like completion on a job. Subs don't know how to fill it out. It's just not we get so many different versions of that document, which we created for them. We give them the Excel spreadsheet, and we say, fill in your schedule of values. Fill it every month. Blah, blah, my bookkeeper rebuilds it every single month for these, for these guys. Well, you know, it's just, it's just time, right? It's just, it's like, if you only have one job to do, it's not that, it's not that big of a deal, but when you got 10 or five big projects, it's like, it's very time consuming, yeah, and of course, we're trying to build out all of our jobs at the same week of every month. It's just, it's just enormously time consuming. So now, now that we've gone into adaptive, our subcontractor agreements, right? You guys call them POS we call them work order agreements are all inputted into adaptive. We have our schedule of values are there, and then when we upload our bills into adaptive it applies all the money directly to the right P the right line item and a PO and like, percentage of completion is done for you. I don't care if you build me on a QuickBooks invoice. I don't care if you build me on a handwritten napkin. It fills all that part in for us. So there's a lot less of that. Oh, well, we build it to the wrong Work Code. Yeah, now it's just, it's, it's in there from the get go, which is really what it comes I think Job Costing and cost coding is probably, single handedly, the most important piece of the financial puzzle, right? If you don't know, how do you bid a job? How do you price a job? How do you budget a job? Going forward, if you don't know what you spent on framing or totally just spent on drywall, like if that money is in the wrong bucket, when I go back and look at my historical data, I could be off when I budget a job. By 1000s and 1000s of dollars. Totally Nice. That's where I live and breathe, right? The client says to me, Oh, well, you know, we're thinking about building a 6000 square foot house. What do you think it's gonna cost? And I we miss allocated, like, in the framing and drywall category on the last one, like, I could be very wrong totally, and which kind of where it's where it is really important for me. So like knowing your numbers really matters totally. And the outcome of not knowing your numbers is the difference of making or breaking it in this business. Yeah, it is the swing on starting a project that was poorly estimated because you didn't have relevant job costing information can blow it all so, yeah, it's, I mean, it totally is. I was just literally on LinkedIn this morning going back on a post, like I was just leaving comments and stuff and engaging, and that was one of the biggest things, is like, even just like having a cost code structure that is consistent, that is used by leadership and accounting and estimating, if those are different people, project management has to be the same, whatever has to be the same. Biggest piece of advice, whoever estimates the job, or whatever software you use to estimate a job has to follow the same cost code structure as the guy who builds the job totally. It cannot be different. It has to be the same set of cost codes, which is crazy to me, not being a builder, having never, like, started a construction company, is just crazy to me, because when you think about what is a cost code? I think of it as a language, right? The cost code structure of a business is the language of the business. And if we have the field that is speaking a different language than what the accounting team is speaking, than what the estimating is speaking, than what the owner is speaking, and everyone's like, well, I've got 200 line items on my budget, and it's all categorized out differently. Well, it's like, well, then how in the hell are hell are you going to get an estimate versus actual when accounting is operating off 75 to 100 cost codes that might reflect some of what's in your budget, but there's all this nuance and difference which is then going to impact estimating down the road, because they're looking at estimates versus actuals, and they're looking at where numbers actually came in, and they're trying to stack it up next to, like, job cost reports, just like what it's got to be, consistent it has to be. And I think I mean, we, we do everything in our business on a cost plus basis. I've done one fixed price job in my career, and it was just because a client was adamant that I give him a fixed price number. And I told him I was going to add 10% to my profit. And he was fine with it. I said, Okay, fine. I'll just make 10% more money, yeah. But so the like from a cost in, a cost plus standpoint, right? We're giving budgets at the front end, yep. But if, if I have budgeted $100,000 for a stucco job, but it actually should have been $200,000 for a stucco line, that's a really uncomfortable conversation to have to have with a client. Totally, it's not that, it's not that it necessarily matters in the long run, because as cost plus it's, you know, whatever the cost is, is what it is, right? We'll competitively bid stuff, but, like, it's whatever it actually is, what you're going to pay, plus my, my fees. It's still a really uncomfortable conversation that's to go to the client say, totally, I missed it by 100 grand. And I don't know what to tell you, yeah, right, because I was looking at bad data. So like, like I said at the beginning, we don't, we don't estimate anything on a cost per square foot basis. But like, I really need to know what we spent on stucco, what we spent on electrical, what we spent on plumbing, on history, historical jobs, so that when I get an opportunity to talk to a client, I can say, well, here's what it cost us on the last one that's very similar to your project in terms of size, scope and all the things. This is a good, good guess as to what you're going to be right, but we'll formalize it once we get a full set of plans. But we don't get full sets of plans until we're midway through a job anyway, totally like, You got to have somewhere to start. Yeah, so that, I mean, you just, I mean that that is, that's your piece of advice that you would leave the listeners with. And I think it goes, it goes back into the like, the game of construction is obviously very appealing, because it is. It can be so lucrative because you're dealing with such large numbers, right? And do you want 10% of a$20 million pie, or, do you want 20% of a $3 million pie, right? It's like is when you kind of think of. Through that lens is like, okay, like, there is a ton of upside, but the challenge is following the numbers, following the data, following the finance also really have to know your business costs. Like, yeah, you know, I've been focusing a lot on burden rates recently, and like, our labor rates that we're under contract on are based off of burden rates from six years ago, five years ago. Dude, they're, they're light. And so we're, we think we're making a percent, a margin on, on all of our our employees that are, that are project related costs and like, we're just not making the margin that we used to. And so you get to the end of the year and you sit there and say, Why am I 7% when I thought I was at 10? Well, I can tell you why, and now you have to make a change. But if you don't ever look at that information, if you don't look at what the tax laws have done to your overhead, or if you don't look at your insurance costs and say, Why am I all of a sudden paying through the nose for a general liability policy and an umbrella that, like we never paid for before? Right? How do you you think you're making a certain margin every year, and that's what you're doing these jobs at a certain percentage based on the fact that it nets you X. If you don't look at those numbers and you you will eventually lose, yep, because your margin is not growing, even though your revenue is right, you're you're working twice as hard. You're selling the crap out of your business. You're getting projects left right and upside down. If you don't know the cost that it takes to run the business, then you're out of luck. Totally. It's only a matter of time. It's only a matter of time. I love it. That could be an entire episode in itself. It's just going over like, no, yeah, exactly. We'll have you back. Jeremy, I appreciate you. This is a killer episode. I'll let you get back to it, but thanks for coming on the pod. Absolutely appreciate it. Thanks for you. Bet we'll see ya.