Blue-Collar Principles

In the latest episode of "Through the Door," Jared Lawson, Managing Member of RSP Plumbing, EarthSculpt Landscaping, and Karst Construction, joins host Megan Comfort to discuss his remarkable journey from a young laborer to a thriving entrepreneur. Lawson shares insights into overcoming the challenges of the construction industry, the critical role of transparent communication with employees and clients, and the strategies that have driven his businesses' success. He also offers valuable advice for aspiring business owners, emphasizing the importance of passion, resilience, and strategic planning. For more information, visit www.earthsculptnv.com.

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Chapters

• 0:06 Welcome Jared Lawson
• 1:11 A Product of Las Vegas
• 2:07 Exploring Career Paths in Construction
• 4:43 Navigation the Pandemic While Running a Business
• 6:35 Pivoting Economic Cycles
• 9:55 Honesty Goes a Long Way With Loyal Employees
• 11:14 Leading by Example Fosters Respect
• 11:51 Accounting: The Language of Business
• 13:31 Marketable Skills
• 14:59 Knowing Your Trade vs. Knowing Business
• 16:23 The Power of Good Relationships
• 18:36 Ask What You Can Do For Others
• 20:06 Word of Mouth Speaks Volumes
• 20:56 Managing Receivables Problems
• 23:25 Diversification of Client Portfolio
• 24:18 Know What Your Business Thrives At
• 25:07 Pipeline of New Employees in Construction
• 26:57 Specialization of the Trades Industry
• 31:07 Growth Through Discomfort
• 34:13 Separation of Entities
• 36:59 Finding the Right Advisors
• 40:34 Mantras for Successful Business Owners
• 43:36 Business Owners' Burden?
• 45:15 Labor of Love
• 47:49 Like & Subscribe

Transcript

(...) Welcome to Through the Door, an insider's perspective on running a business. I'm making comfort, small business manager at Nevada State Bank, and I am very excited to announce my next guest. His name is Jared Lawson. He owns several businesses in the greater Las Vegas area. He has RSP, which is a plumbing company here. He has Earthsculpt, a landscaping business, and then also Karst Construction, a general contracting firm. So I want to thank you for being here today. Well, thank you for having me. Yes.

(...)

So these podcast interviews, what we typically like to do is we interview business owners to get their take on the ins and outs of running a business. So what you kind of go through and how you have gotten into business ownership and how you kind of see all of the problem solving and critical things that you work out throughout the day through your lens. So the way that I usually like to start this is with an origin story,

(...)

meaning tell us a little bit about how you got into the trades and the construction industry, and then ultimately found yourself wanting to open up and own your own business.(...) So I'm pretty much a product of Vegas.

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My family moved here in 1980. I was born in Miami, Florida. My dad worked for the federal government. He was an FBI agent.

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So I'm a product of the school system here. I graduated from UNLV.

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UNLV? Yeah, UNLV, right? Me too. I'm a UNLV alumni, too. All my brothers and sisters graduated from UNLV. So we've run the gamut as far as the public school system here.

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But I started working in construction when I was 15 years old.

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I was a laborer at the Imperial Palace at the time. It was just a summer job.

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It kind of opened my eyes to the construction world.

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Since that time, I have never been out of construction.

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It just suited me well.

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But I've learned a lot along that path.

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What were the varying jobs that you had in the construction industry?

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That's a long time to be in one industry. So I was a laborer for a couple summers at the IP.

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And then I was actually hired by one of the supervisors. He broke off from the IP and started his own masonry company.

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So I was just the brute force laborer out there digging trenches and making concrete and stock and block and stuff like that. So I did that for a summer.

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And then from there, I got involved in the mechanical side of the construction company of the industry,(...) HVAC and plumbing.

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But that got into my college career. So I was doing that kind of part time on and off while I was getting an education.

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And from there, I got more involved in plumbing.

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Did you like that? Because that is one of the longer companies that you've had, is the plumbing business. Is that the time where you're like, I like this segment of the industry?(...) I don't know if I really fell in love with like, I love this section of the industry. But it came easy to me. And the company I was working for at the time got bought up by a national conglomerate.

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So with my educational experience and everything I knew about plumbing and HVAC, it was a good fit.

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And when they got purchased by that national conglomerate, I was asked to go around the country to start up new divisions for that national chain.

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And that just wore me down. I mean, traveling six days a week,

(...)

dealing with everything that a business owner has to deal with. But not owning it. But not owning it. It just really takes its hold on you. How old were you at that time? Were you traveling a lot? I was probably 25, 26.

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And I was all over-- I'd go anywhere from Texas, North Carolina, to Colorado, California. There was not a place in the US that I didn't go. But after three years of doing that, I was just--

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I was wore down.

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So cards played my favor.

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We started a plumbing company here in Las Vegas. We all kind of got out of doing that national conglomerate thing. So me and a group of guys started our RSP back in 2002. And it's still going strong. We got through the recession.

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Tell us a little bit about going through a recession like that. Because there are recession cycles, if you will, economic cycles, where there's a downturn in a company. That one, especially in Las Vegas, was a big dip. It was a really big hole, actually. And I think everybody kind of felt it.

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What were some of the lessons learned in that situation running a business? Because you kind of were probably explosive busy.

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And just a cliff.(...) How did you get through that?(...) And this is kind of how I run and operate each one of the entities that I'm involved with, is I'm not heavily-laid in debt. There's nobody that I owe money to. And that really helped us out in that time.

(...)

So we went from building for plumbing anywhere from 1,500 to 2,000 homes in the Valley a year to like 300. And so the only thing that got us through that was we didn't owe anybody anything. We owned all our trucks. We could scale all the way down. Yeah, we scaled all the way down. And during that time, we had meeting after meeting about, what are we going to do? And no one really knew. When you are faced with a crisis of that proportion,

(...)

everything's on the table. No one knows what to do. And so we talked about starting service companies and doing that kind of stuff. But we we weathered that storm because we put ourselves in a financial position to do that.

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There was nothing that we owned. And we had a meeting-- I still remember me and the management team at RSB sat around. And we just said, hey, we could probably sit around for a year and not do anything. And we'll be fine. We'll all get paychecks. We just had socked all our money into the bank.

(...)

And we didn't owe anybody anything. What was that thought process like? Because I hear this, and I see this a lot from business owners, because especially working for a bank, right? We like to lend out money. Yeah. You don't like me that much. We like to lend out money, but we like to get repaid too. So we want to lend to strong operators. I think most financial institutions are looking to do that.

(...)

And so I always think that there's this healthy level of leverage. But there's also this important aspect of making sure that you understand what economic cycle you're in as a company so that you don't go out and get a ton of debt to potentially grow. But then all of a sudden, you timed it incorrectly. And it's actually going down. And now you can't scale down because you have all of this debt. Were those conversations that you guys had-- because as you were growing, was there ever a moment where you're like, wow, we need to get more loans to be able to meet this growth? Did you turn away business because you're like, you know what? That's too much for us to take on right now? No. Again, I said earlier that cards kind of played in our favor in that when we went to that national conglomerate, we knew the construction industry in Vegas like the back of our hand. We knew every major home builder. We had personal relationships with them. And so when we went and did that,

(...)

we knew that we could turn back to this market and say, hey, we're back here now.

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And we're the same guys, just a different logo on the truck, so to speak.

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But when those home builders went through everything they went through and the nation went through everything they went through in that recession,

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we knew-- we kind of knew that it would come back. I mean, Vegas wasn't going to die. I mean, look at where we're at now. There's too many people here. And there's just too much of an attraction to Vegas

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with the advantageous tax environment, things that we knew it was going to take off. It was just going to take some time. And so once the finances of our nation and the country kind of got back on track, we knew we weren't going to be in dire straits.

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And it paid off well for us. So we kind of made that calculation, said, yeah, we might have a couple, two, three years that are going to absolutely suck, but we'll get through it.(...) And that's kind of what we did. So we were able to scale our workforce down. And when we started back up, we brought a lot of those same guys back. So we have some of our employees in that company have been with us for more than 20 years. There's a core group of guys. And I'm not just talking about management. I'm talking our field labor, the guys that are actually humping and pumping and doing the work. They've been with us through it all. And so there's some loyalty there. So we really try and take care of those guys

(...)

because we know that they could have packed their bags and went elsewhere really quick. But they stuck through it with us. And so there's these calculations you make as a business owner.

(...)

That's a big part of it. So we take care of the guys that stuck with us. What drove that loyalty for that core section of your employees? Because that's a number one issue that I think all businesses face is employee retention and finding the right skilled employees to stay with a company and not get poached or not constantly be looking for a better job. We had this discussion a month ago. So I think when you're genuine with people and you're honest with them and you don't try and pull the wool over their eyes, it goes a long way with anybody that you're working with. And so we've always had that. We've always taken that approach.

(...)

They knew what we were up against and they knew that we were trying to take care of them at the same time, both financially. And we wanna make sure that they realized that,(...) we're taking in the shorts right now because there's no business coming in, but we can figure something out together to make this work. But we were open and honest with them and we didn't lie to them. And so that's why a lot of those guys stuck around and just stayed with us, but we were genuine. And I think that's, even to this day, that's probably a good policy to have with all your employees is just tell them how it is. Don't sugarcoat it. Don't try and make something out of it that it's not. You just gotta tell them the way you feel and what's going on.(...) - Well, and we talked about this before. There's this element of, as a leader, I wouldn't ask anybody to do something that I wouldn't do myself.(...) I think that that goes a long way when you're working with different people. I operate the very similar way. If I'm asking you to do something and it's new for all of us, I'm gonna be one of the first people that's going to try and figure it out too because I want to know if this is challenging, if it's difficult, what you're really up against and what you're facing and it does. It creates that bond, that camaraderie with your employees. - Very true. - So you are a UNLV grad, we talked about this too, and with an accounting degree. - Yeah, kind of weird, huh? - Which is fun. But I remember I had a mentor very early in banking when I didn't have my degree yet. I was actually still going to school. He mentioned to me that accounting and finance is the language of business. So if you're going to be in the business industry, then you need to make sure that you understand the language. And that is through the financial aspect of the company, not just for bankers or anyone dealing with numbers, but for business operators.(...) Can you tell us a little bit more about the choice that you made there because you didn't get an accounting degree to be an accountant. - No. - You got an accounting degree because you understood and then how does some of that apply with what you do today? - Yeah, so again, I was a labor at IP, and then I was also what they call a hottie on the Cinder blog. - Did you say a hottie? - Yeah, that's what they call it. - Oh, wow. OK, so you're a hottie. OK, I like it. - I'm still a hottie, come on.(...) Now, I learned early on that unless you're going to expand in what you can offer a company,

(...)

I didn't want to be stuck in a trench for the rest of my life.

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That's not me.(...) And so my dad, he was an FBI agent.

(...)

He instilled in all of us one work ethic. So even from when I was five years old, all of us, all of his children know how to work, and they're not afraid to work. So I'd say, probably we'll get into that later, but that's probably one thing that I'm grateful that he did for all of us.

(...)

But he told me, if you're going to do anything, make sure it's something that people will seek you out for. So he called them marketable skills.(...) So he said, if you're going to go to school, don't become nothing against history, but don't be a history buff.

(...)

Go do something that's going to serve you well later in life. - I like the marketable skills term. That's a really good way to explain it. - So again,(...) make something of yourself where people will seek you out.(...) And that's kind of what we all did. All my brothers and sisters went to college and got those marketable skills.(...) But I knew early on I didn't want to be slinging blocks around and in a trench for the rest of the way. So I went out and got my college degree. And everybody calls me a bean counter and things of that nature, which, OK, that's fine. But I'm multifaceted now. So that was kind of a good foundation, especially in construction, because one, you start learning more and more about the intricacies and the skills and field work. And you have that solid foundation.(...) Finance-wise,(...) it's a good tandem, right? So that's why I went to college. And I could have done a million things at UNILEAD, but accounting didn't seem glamorous. It was something that helped me out. It still helps me out.

(...)

- Yeah. Well, there's an earlier podcast that I did with another guest. And he talks about business ownership and how you might understand the trade or the field that you're in. You might know how to make the product or do the service. But when you become a business owner, there's so many other things that you have to know. You can't just know how to deliver the product and be a worker, if you will. You have to know all these other things. And it really does take a lot of education on the job and maybe even education outside of the job to be able to become a well-rounded business operator. - And I'm still learning today, right? No one knows everything. So when I went to work for AMPAM-- that was the National Conglomerate--

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I was asked-- accounting became probably 25%, 35% of my workload. I was dealing with so many different other facets(...) of the company--

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HR.

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Licensing, things of insurance,(...) legal, litigation stuff.

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It really opened your eyes. And so that's, as a business owner, you're faced with that every day.

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So it's tough. But that's what you sign up for when you own a business. - Well, it sounds like you learned a lot from working with that national company. They actually really set you up to move on and start your own business from the perspective of just all the other responsibilities that you had in being able to set up their shops in different cities.(...) Tell me about the power of relationships, because you mentioned that. You have been in Vegas for a very long time. You've solidified yourself with other people within your industry and your network that really helped once you opened the doors bring that business in.(...) How does that work? - Vegas is a small town. I don't care what anybody says. - It is. Even though we're like 2.2 million in population and it's still a small town. - Yeah. So growing up here, I've seen the town from when it was just desert space all around to where it is today. But I know a lot of people here. But again, the work you do, the way you treat people, that carries a lot of weight.

(...)

And even as a business owner, good helps hard to find. So all those years working in the plumbing trades, and we built a good solid relationship with every customer that we had, they knew what they were getting(...) when we signed contracts. There was no BS. It was straightforward.

(...)

And that follows you. And so it carries through in everything you do because especially in Vegas, I think your reputation means a lot to people.(...) So again, it goes back to being honest, being upfront, being straightforward with people.

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That's everything in business relationships.

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And so when you deal with the same companies over and over and over again,(...) they know what they're getting. And there's no murkiness or there's no gray areas. They know it's a cut and dry deal, and who you are, and what you can do, and what you can't do.

(...)

So I don't have those kind of conversations with my customers, but I'm almost assured that they wouldn't be my customers if they didn't know who I was or what we were all about. - Well, it's the personal aspect in relationships of a business, right? You might have a name or a brand that you represent, but they're connecting with you. They're connecting with your quality of work and how you communicate with them and what you're doing to help them with the aspect that they're hiring for. And so that's one thing that I always find interesting is a lot of people ask a question, or I get this a lot, with new businesses. How do you network or how do you build those relationships to be able to infiltrate and get some business? And in my opinion, you can't be self-serving. You can't go into any situation really thinking about, what am I going to get out of it? It's more of how can I help this person?

(...)

What am I going to do to really help them? Does that align with what they need? And then do they see that value? If they do see the value, then it's fantastic. Because then you have this great synergistic relationship and it's mutually beneficial for everybody. They don't feel like you're just trying to get something out of them.(...) And I've never known it any other way.

(...)

I can tell when people are just trying to sell or get something from me versus someone that truly has a genuine interest in what my problem is or how to help me. Yeah, and that's again the open part in being honest with people.

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We don't-- I mean, it's funny.

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The plumbing company that I'm involved with, we don't advertise. I mean, we have a very--

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it's networking. We're involved with the Southern Nevada Home Builders Association, the Subcontractors Association. That's our main marketing tools there. You won't see our ads. We don't run commercials.(...) But we've never had a slow period. Because again, it's the work we do and the relationships we've built with those companies that has carried us.

(...)

And that's something that-- it's kind of like a sacred thing almost. You don't want to screw with that too much. But as long as your customers know what they're getting and who they're dealing with and that doesn't change over time,(...) they're going to stick with you.(...) What about in the trades industry? I've always heard sometimes that cash flow management and collection of your receivables and things like that, sometimes that can be a challenge. Is there anything that you've learned on how to manage that a little bit better for your company?(...) Yeah, there's always-- Is it more like vetting your clients? Or how does that work? There's always-- you're going to come across a couple shysters in the construction world no matter what.

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And so we really vet our customers.(...) And years ago, we were part of the Credit Managers Association.

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And that was kind of like the organization where all the subcontractors would get together and say, hey, are you having a problem with such and such?

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Oh, yeah. And they're having financing issues. So I mean,(...) you try and get in front of that as much as you can. But that relationship that we've built with our ongoing customers, that's a two-way street.

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So if they're not paying their bills,

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there's got to be some kind of consequence to that. So we're very upfront. And we make sure we do a good job. We expect to get paid for it.(...) Again, we've been burned on occasions, just especially during the downturn when some of the home builders just folded up shop and went away.

(...)

But again, we position ourselves to weather those storms. And so most of the companies-- well, about 98% of the customers we have now-- don't have a problem paying us because they know what they're getting. And we know who they are. And so we go through that vetting process(...) quite extensively before we take them on as a customer. And we know that they're probably doing the same thing for us. I mean, they're really doing their homework. And so are we. So we kind of know who we're getting in bed with before we start doing anything.

(...)

But we haven't had a huge, uncollectible, receivable problem in years.

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And that's partly because of, again, the relationship we've built.

(...)

I have phone numbers. I can call people, like the vision president, and just say, hey, what's going on? And they'll be honest with me. And same thing with-- they can call us any time, say, hey, how come you guys are on this job? Or why are you behind?

(...)

We have that relationship. We have that open communication with them. So if they're-- Do you look at diversification ever? Like, as far as just when you have a lot of jobs going on, or maybe there's one big job in particular, but you know it's going to take all of your workforce, and you're really putting all your eggs in one basket, if you will. Is that something that you look at as a risk? Or how do you manage that? No, so we do diversify not so much on project type, but customer base.

(...)

We know our bread and butters in plumbing, at least, is residential and small commercial. We will never get into hospitals, plumbing hospitals or high rises. That's just not us. So we know who we are.

(...)

But there's not a residential home here in town that we can't plumb.

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So you've got to be resolved in yourself to know what you can and can't do. Well, yeah, I think that's a great one-liner. Know who you are as a business. Know what you're going to be doing and who your customer is. And don't be afraid to turn away something really big that, yes, might be a big payday if you pull it off. If you don't have experience in doing it, you really have to do some introspective searching on, can I actually do a good job on this? And is this really what I want my company to be?(...) And it's hard telling people no, but you have to do it at times. I mean, if it's not in your wheelhouse, you can't do it. I mean, it's better to be honest with them than get halfway through it and then figure it out. Because then you're really screwed. Well, and reputationally, yeah, it could be very bad. Yeah, so-- Especially. It's a small town, remember. Very small town.

(...)

So the evolution of your industry is interesting because we hear about it a lot of just the pipeline of new workers coming in. And just the evolution change. We talked a little bit about that.

(...)

Is that something that you think about as an ongoing future risk for your business of like, wow, the pipeline of new employees coming in, being able to do this? And then tell us a little bit about how you see the industry changing.(...) Well, there's definitely a lack of qualified help right now. And you can go to any construction company in the Valley or probably in the nation, and you just can't find good help.

(...)

And that's probably the biggest challenge as a business owner. You're going to face that for the next 20 years, I'm afraid to say.

(...)

Mike Rose is a great advocate of blue collar jobs. So I listen to a lot of what he has to say. But here in town,(...) we've been approached just this week by the Las Vegas Christian Academy. They want to start a trade section of their school.

(...)

About two years ago,(...) the Home Builders, Southern Nevada, the Subcontractors Association, they started a vocational high school, an accredited one. And so they're going to have their first graduating class next year.

(...)

Is that enough? No. But I think people need to realize the blue collar jobs are going to be in demand.

(...)

And you won't ever be without work. There's always going to be somebody that needs to see you. But for us right now and for all the companies(...) that I'm involved with, that's our biggest challenge by far, finding qualified help and people that are willing to work.

(...)

Well, and we talked about the specialization that's kind of occurring within the industry too,

(...)

where a plumber-- you think about a plumber. A plumber is a plumber. They can do all things plumbing. But that's not necessarily the case anymore. And it's probably not going to be in the future.(...) It's going to be these specialty lanes, if you will. Can you talk a little bit about that? Yeah, you're right. In that 30, 40 years ago when you hired a plumber, they knew every facet of the plumbing system in your home. That's not the case today anymore. If you find those guys, hire them, pay them what they want, just get them, because it's not out there. So the way that we have had to change and modify our business,(...) we prefabricate all our plumbing systems. So it's kind of like it's real easy to put together. We try to make it as easy as possible, kind of make it look like a puzzle.

(...)

But in doing that, we really enabled the guys to--

(...)

I don't want to say dumb them down, but we've enabled them to pick out like, I only do this now. So I'll give you a great example.

(...)

We prefabricate all our sewer systems. And so we have an engineering department that cuts to length all our pipe. They take drawings that are provided to us by the builder. And they'll design the whole house in a 3D rendering prior to us even going out to the job site. We then take that drawing, we cut everything to length, we bundle it all up, and we deliver this product, the pipe and the fittings, out to the home. So our guys will then look at-- we call it an isometric drawing-- they'll look at this and say, OK, I have a five foot piece of pipe here. I know that goes here. And I know the six foot piece goes over there. And I know these fittings. I know exactly where everything goes. And so these guys-- and our installers now--

(...)

they become efficient just at doing that one aspect of the job. And so instead of seeing one guy who knows how to do everything in the house, you have four guys that know how to do one specific task in that house. And that's the way construction is gone. And it's sad because there's no all around cowboys anymore. It's just kind of like, I only do gas systems. I only set finish. I only-- But for scaling, if you're doing a lot of homes, is that more efficient? Oh, it's much more efficient. It is. Having a specialty person rather than one person that's doing everything. And so again, we kind of figured that out. Years ago, the prefabrication process, it's a lot of legwork up front. But it's a much more efficient way to build a home. And the quality control is there. I mean, you know exactly how long a piece of pipe is supposed to be. And you know that pipe's going to be coming up through your wall and not in the middle of your family room.

(...)

So there's pros and cons to doing that. But for us, that has helped us out a lot.(...) Because the guys we have in our warehouse doing that, that's all they do is they cut pipe and glue things together and bundle them up. They're really good at it. And we have a great system in place

(...)

to make sure that things are delivered right when they need to be delivered on a job site. So you don't have material sitting around them on homes. It's not getting stolen. Or excess material. Or excess materials, yeah. So it minimizes waste. We get to control all that stuff, doing that. And yeah, it sucks in some ways because you're doing all that before you even get paid for doing it. But again, we're in the business of continually having customers, the same customers over and over. They realize what we're doing.

(...)

So we've made that calculation and say, yeah, this is what we're going to continue to do.

(...)

But the downside of that is you create these guys that only know one aspect of plumbing. And that's kind of a drawback. But it is what it is. Yeah.(...) So you've grown. And you've grown into other areas. Yeah, physically as well.(...) Personally and physically, you've gotten very large. No, I'm just kidding.

(...)

[LAUGHTER] But as a company, you've grown. Tell me a little bit about the decisions that you've made there over the years of creating different entities to do different things.(...) Why did you want to take on more?

(...)

I'm a firm believer in being uncomfortable.

(...)

And that's where growth occurs. So when I started these other entities,

(...)

my brother, who is in land development, was asked by a municipality here in town to just trim trees for him. And he was doing it as like a weekend side gig. And he had like Boy Scouts out there helping him do it. And it was nothing, but you get to go buy lunch every now and then doing it. But he had to move to Texas.(...) So he just asked me, hey, can you kind of do this? It's like one Saturday a month type thing. And this was 12 years ago. So it's sure. I mean, I can take my son out. We can spend some time together, do that kind of stuff.(...) From there, it just really took off. I mean,(...) I realized I did that for about four or five years. And it just got busier and busier and busier. And so I've made the decision either I'm going to continue to just go out and waste a Saturday. I'm going to start something and have employees and make something of this. Because I can't see it slowing down. So if I don't do this, I'm going to be missing an opportunity.

(...)

So I made that decision. I went out and through all that time, we worked on irrigation lines. And I kind of began to understand all the different facets of landscaping. So it went from something that was kind of a weekend gig to a full-fledged company.(...) And so I took the time and made the sacrifice to get my contractor's license in that,(...) which paid off in spades.

(...)

Now we have guys running all over town doing landscaping. So you just have to be comfortable being uncomfortable. And you've got to realize either you're going to make something of what you're doing or you're going to be stuck in the same boat.

(...)

That's one fascinating characteristic that entrepreneurs have is my husband, for example. You're probably the same way. You walk into a business or anywhere and you're like, oh my god, they could be doing this. They could be doing that. We could be doing this. I find that so fascinating when people

(...)

they take something that they're doing and they're like, this could be bigger. I could do more with this. And then they sacrifice the time to actually make it what it is, which is generally it starts with a need. There's a need there that you have to fulfill. And I can either make sure that I'm doing it and putting that together because I know that it will be the best that it could be. Or I could let it fall on someone else's shoulders and it might not be as great as it could be.

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What about the separation of entities? Because that's one thing as small businesses, they don't always understand or see as they continue growing or getting bigger the importance of creating separate entity structures for asset protection and liability protection.(...) At what point or who told you that that was a good idea to implement for your business? Our lawyer.

(...)

There's always a lawyer. There's lawyers everywhere.

(...)

No, we realized early on that construction defect was going to roll over from California. All the attorneys were heading here.(...) So we decided, hey, to mitigate our exposure to that litigation.(...) We were going to start a management company and an asset company to shelter ourselves from all that potential litigation.

(...)

And that's what we did. And that really helped us in that the insurance companies and the lawyers will run through you like the dose of salts. You don't have a chance against them. They're the 1,200-pound gorilla in the room. And the way that our state legislature kind of allows that to happen-- I'll use allows, but allows, I guess, is a good word. But it happens. And it's still happening today. But we realized early on, if we get one bad lawsuit, this can all go up in flames really quick. And so in order to protect ourselves, we started that asset company. We tucked everything in there.(...) And that has sheltered us from a lot of the litigation that goes on. And I would say, as a business owner, I think you really need to take the time to look at-- especially if you're like a sole proprietor--(...) you really need to take the time and bite the bullet and invest in protecting and sheltering your assets from any potential liabilities that could happen.

(...)

It's foolish not to do that.

(...)

You've got to think--

(...)

especially as a sole proprietor, if something goes wrong with your company, they're going to be knocking on your door.(...) Well, and they have access to-- Everything. Everything. Everything. And so you separate these things into buckets.

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And if something catastrophic does happen to one of those buckets, you at least have some other buckets to rely on. And that's kind of how we approached our management philosophy and how we manage our companies and operate them every day.

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It just works. And it's smart. It sounds like you guys have understood the importance of having trusted advisors or people that specialize in something. You've got advisement from an attorney. You have probably other people that really help insurance, banking, all of those things that you kind of bounce things off of to help you with that.

(...)

When did that decision come along? Did you always know I need these people in my corner and I need good people? Or was that something that a mistake kind of occurred and you realized, wow, I need some specialty help? No. I don't want to say there was a mistake, but you don't want to just go after any attorney. I mean, just drive down the freeway, there's a million billboards.(...) Those are all injury lawyers, right? So we realized we needed a construction defect attorney. And so we went and sought out the best. And that's who we kind of aligned ourselves with. And that's who we stuck with. Because--(...) and I guess what people maybe don't understand about construction is it's-- when you get into the mediations and things of that nature, everyone's sitting around a table, and they're just kind of protecting their chips.

(...)

You have your insurance company who's supposed to be helping you. It's not. They've got their chips protected. They've got an attorney that they're paying that's supposed to be defending you.(...) He's-- he knows who's writing the checks. And so you've really got to kind of load yourself up with the right kind of ammunition for that. And so that's why we went and got our own in-house counsel

(...)

to kind of help us through those situations. Because it's funny, every time that we go through a settlement, the settlement is always less than our deductible. So we're always paying out of pocket for it. And insurance company-- and insurance company, you know, they'll make that agreement without you in the room, which is frustrating. But you can't find a policy-- they call them non-consent policy-- you can't find a policy where they have to have your consent to make that. To make a settlement. And so that's frustration and construction. And until something changes legislatively, it's going to continue.(...) It's just a-- that's part of the business.

(...)

You can fight, cuss, and scream to all your local representatives and congressmen.(...) But at the end of the day, I think whoever's paying campaign contributions is the one who's going to dictate law. And that's sad, but that's the way it is. But I do think that it's important to know what you're up against and what you're dealing with. If that is kind of things that happen within your industry, it would be silly for you to stay naive and say, well, that's not going to happen to me. And not put things in place to help protect yourself against something like that could happen. Because it could really be detrimental to a business.

(...)

So it's just like a doctor, he needs insurance practice.

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It's going to happen in construction. No matter what you do, it's going to happen sooner or later. So you might as well be prepared for it, know that it's going to happen. So when it does happen, it's not like an unexpected--

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you're ready for it. So you just got to position yourself well. OK, well, this is one of my last questions. Are you sure? Yes, I think so.

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Because you've actually given a lot of great information, especially for people that might be looking into the trades or just kind of growing a company, some things to think about. But what would you say is some solid advisement or maybe even some things that you tell yourself that's really kind of contributed to your success. You've said one thing about being uncomfortable.(...) Being in a position of uncomfortability helps you grow. That's probably one thing that's really helped you. But is there anything that you can think of off the top of your head? Well, there's a million there. But one thing that I continually tell myself is everyone has this idea that being a business owner is a great, awesome thing. You get to go on vacations when you want. You get to make your own hours. Hawaiian shirts, flip flops every day. Golf every Friday.(...) I haven't found that yet. You tell me-- I mean, if they're doing that, then they've got me beat by a mile. But I just-- I realize every morning when you wake up,

(...)

there's an equation that we probably weigh this out(...) 100 times during the day, but we don't realize. It's effort, sacrifice, strife, all those things that you do versus the reward and the reward that you're going to get out of it. We make that decision, and we do it, and we don't even realize it.(...) So being a business owner, I've always--(...) that risk-reward calculation I make a million times.

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I'm in it for the reward, obviously.(...) There's days where the strife and the grief really outweigh the rewards. But on average, the rewards and what you get out of that has to far exceed everything you put into it.

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And that's kind of served me well. But as a business owner,(...) you've got to be resigned in the fact that you're never off. You don't have a day off.

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You're going to be on call. You're going to be the person that has to make the final call on the final decisions. It's tough.

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And it's not always easy. Most of the time, it's not easy. Sometimes downright sucks.(...) But this is the job that you signed up for. This is what it takes to be a business owner.(...) And so with experience, you gain that knowledge, and you've gone through a lot of the same things that happen.(...) But there's days where you get thrown a curve, and you're like, what's going on? And so I go through that every time, or I go through that continually.

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But if you want to be a business owner, just know that it's not easy.(...) And you're not flying on a private jet somewhere.

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It's probably the most demanding thing you'll ever do.

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But that's why you're the business owner. You get to reap the rewards of all your hard work.

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But you take it home with you. And it never-- it's always--

(...)

you've got to really embrace being a business owner if you want to do it. Well, the responsibilities of people's livelihoods, and your client's satisfaction, and all of these things, they rest on your shoulders. And it sounds like it's a burden, but it really isn't. It's more of a passion that I've noticed. I think about my husband. He's so close to me, obviously. And his businesses, I'm like, I couldn't imagine him being an employee for anybody. I couldn't imagine you being an employee.

(...)

You have this unique characteristic that really just-- you thrive on knowing that, yes, there's all of these responsibilities and things that I have, but there's no better person for the job than me, really, is what it comes down to. Because you care. You care about all of these things. The side effect is the reward of the profits and the money, and that's fantastic. But at the end of the day, that's really not what you're focused on. And that's one thing that I find with successful business owners is always the key. They're not focused on this. They pay attention to it, obviously, because you could run out of money and then be out of business. But at the end of the day, you're focused more on, how do I make sure that my employees are happy and satisfied, and that they're doing a great job, and they love what they do when they come to work? How do I make sure that my clients know that we take their job seriously, and that we really want to make sure that we're delivering the absolute best thing to them every single time,(...) and all the other responsibilities of just being in an industry, of making sure that that industry continues and that it just gets better over time.(...) There's all of those things in your universe that you probably wouldn't want to trade it for anything else. No, no.(...) It's,(...) again, you go through that, like, every day, there's going to be something that pops up that says, "Man, why is this not handled by it?" You know, "Why am I having it?" But that's what it takes. Flip side of that is, you know, I love, and that's why I'm in construction, I love creating things, right? I love creating outdoor environments. I love knowing that a couple in their first home really likes their shower, that, you know, that, "Oh, my goodness, we never could have thought that we would have..." So I love seeing that, and so there's a passion there, right? He touched on that.

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The other thing I really love to see is my employees grow with the company.

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Again, there's days where you're uncomfortable.

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But knowing that you're investing not only money with this employee, but your time and your knowledge, sharing that with them, they're going to pay off in spades if they stick with you. And so as long as you're, again, honest with your employees, open and tell them what you see and let them know their worth,

(...)

that goes a long, long way with employees.

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And it benefits the business owner as well, because now you get to reap the rewards of all your efforts in that person.(...) And so, you know, you got to have that passion. You got to be honest and open with everybody, both people that are working for you and your customers.

(...)

But yeah,(...) there's not a day that goes by that says, "Man, I should be doing something else." No, I mean, this is what I was made to do. I'm in construction for my life, and that's kind of me. And I can't think of another way to make a buck and to be happy at the same time. It's just not going to happen.

(...)

But yeah, you got to invest all your efforts into your employees to make sure they grow with the company, because if you don't grow, you die, right? And so, you don't want to leave anybody behind, especially when you believe in them and you know what they can be.(...) It's really essential to make sure that they know that you believe in them and that you're willing to make that investment in them. So, that's important. Yeah, I agree. I mean, it solves the retention issue if you do it right, I think. Yeah.(...) Well, thank you so much for being here today, Jared. We really appreciate it.(...) This is Through the Door, an insider's perspective on running a business.(...) And that concludes our episode. Thank you. Thank you.