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Everything I Learnt Working Inside a $100M Construction Company · Contractor Business Builder Podcast

0:00
The first lesson is that $100
0:12
million construction company knows that the more they do
0:15
something, the better they will get at it.
0:17
And consistency is so key. You may have heard this before,
0:20
but a lot of contractors are chasing bigger projects, lots of
0:25
variety of projects. This company, $100 million, the
0:29
large companies, they stay in their lane.
0:31
They know what works for them and they're able to consistently
0:34
pump out projects over and over again.
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This helps their teams be more efficient.
0:38
Quality is better controlled and they know that they can sell the
0:43
projects at a specific price and they become the expert and
0:46
specialized in that type of project.
0:48
This $100 million company in specific did mid level homes is
0:53
what they were known for. They could essentially do track
0:56
homes and do one after the other after the other.
0:59
They weren't chasing to do all these different types of custom
1:02
or big projects or this or that. So understand that yes, you want
1:07
to increase your average drop size, but that said, you want to
1:10
find where can you specialize in where can you be the best in
1:14
that specific niche and where can you turn over consistent
1:17
profit day after day, month after month.
1:32
It's typing consistency makes it easier for everybody in the
1:35
company, whether that's estimating sales, your project
1:38
managers having. In this particular instance,
1:42
they typically did homes between 300,000 to $700,000 range for
1:47
the actual home and they could line up homes.
1:51
They knew which lots sold, they knew which price points they hit
1:55
because they were had repetitive design and everything.
1:58
Of course, you can customize for each client and their colours
2:02
and there's certain selections and things they can pick, but
2:05
the overall way they operate their business and the structure
2:08
of their homes was very, very consistent.
2:11
One after the other, after the other locations were very
2:14
similar as well. So you don't have project
2:17
managers or people having to drive all over these big areas
2:21
for one house here, one house there.
2:23
They would pick neighborhoods or new developments where they
2:26
could consistently have a lot of homes in one small area and they
2:30
could essentially control a neighborhood or control a
2:33
street. When you pick a small
2:35
development or you know, a bunch of houses in a row, everybody is
2:39
more efficient and better. Their subcontractors as well.
2:44
They didn't work with, you know, 10 different subcontracts even
2:46
though they're doing 102 hundred homes a year.
2:49
They only had about two to three, maybe 3, typically two
2:53
different subcontracting companies for a specific type of
2:57
trades work. This was consistency.
3:00
You're not as a project manager having to keep track of all
3:03
these different trades. Plus, because they were able to
3:06
push a lot of work to one company, they obviously got
3:09
favorable pricing and favorable service because they knew if
3:14
they pissed off this contractor, there's a lot of work that they
3:17
could be missing out on. So they would prioritize getting
3:20
back to projects, finishing up stuff, make sure the quality is
3:23
on point. How with it?
4:42
We're doing hundreds of homes a year.
4:44
You need a lot of leads and you need a lot of sales.
4:48
Having internal sales team or building out a sales.
5:06
Redoing hundreds of homes a year as you can't just rely on some
5:10
random salesperson or building out your own sales team.
5:14
This company use professionals, real estate agents so that they
5:19
could really pick and choose specific agents to help to work
5:23
with. But their homes were also up for
5:25
sale on the big market and they had essentially other people
5:29
selling the homes for them. Obviously they're very active in
5:35
marketing and lead generation, but their actual sales model
5:40
enabled them to scale up and down and there was always large
5:43
demand for their their homes because on the open market they
5:48
knew that they could price accordingly and they were able
5:50
to build up a reputation over decades essentially.
6:01
The the marketing was clear, they weren't trying to
6:03
overshoot. They they were in tune with
6:06
their client. Essentially, after you do so
6:08
many homes, you start to realize which colours, which areas,
6:13
which type of design, which type of families, demographics.
6:17
You can get so consistent and dialed in that you can really
6:20
start to picture of like consistency throughout the whole
6:25
and having predictable leads coming in.
6:36
They're also able to have specific show homes throughout
6:40
and whenever marketing in general.
6:43
But when you have show homes, make sure that you are
6:47
everything is 100% pristine and you have someone checking them
6:50
weekly very often, if not even more often than that to make
6:55
sure there is no caulking cracks, there's no little cracks
6:58
in the drywall. There's no like weird stuff out
7:00
of place. There's no creeks in the floor
7:02
because the the show home, and this goes for your marketing as
7:05
well, has to be pristine, 100% perfect.
7:10
Because if there's any flaws in the show home or the marketing
7:14
materials that you're putting out, it just decreases the value
7:17
perceived of your company and makes people wonder what kind of
7:21
product they're going to end up getting.
8:08
There's this part is gonna go at the beginning of lesson 2 for
8:12
whoever is editing this. So if you're watching it.
8:26
Second lesson I learned is how they get so many leads with
8:30
unique methods and this completely flipped how I
8:33
approach drawing a construction business.
9:03
Our lesson 3 came from the CEO and senior management of this
9:07
$100 million contracting company and it was so simple, but
9:10
extremely valuable. Remember many conversations with
9:39
the one senior manager in, in general, he was hard, but you
9:44
always had a sense that he was fair.
9:47
And this style of leadership, everyone's going to have a
9:50
little bit of their own personality into leadership.
9:53
But realize that as the leader of a company, especially when
9:56
you start to grow and expand and you've got, you know, tens, 20s,
10:00
hundreds of, of potential employees, that there is a
10:04
little bit of straight to the point toughness, hardness that
10:09
you need. It's not that you can't show
10:11
your human side, but realize that at the end of the day, you
10:15
need people to know that you're in charge and there isn't time
10:18
for this, you know, fluffy stuff and, and making sure everyone
10:21
feels well. Get to the point, say what you
10:24
need to say. People are expected to take the
10:27
information, get their job done. And if there's something that is
10:32
wrong or out of place or a teachable moment that it'll be
10:35
expressed. And you're not expected to get
10:39
defensive and get upset and start some internal politics
10:43
about who said what. There should be a leadership
10:46
style of let's everybody do their job, let's get done and
10:50
move on to the next thing. A lot of businesses will say we,
10:59
you know, we're, we're a big family.
11:01
We treat people like family. That's great.
11:04
But realize that families have conflicts.
11:06
Sometimes you have to have hard conversations with your family.
11:09
So yes, treat people like family, but that doesn't mean
11:13
everybody needs to, you know, you have to go to the ends of
11:16
the earth for them. It's that you're willing to have
11:19
hard conversations and you're, you're willing to grow and, and
11:23
have people included in your environment.
11:26
You always want to be praising publicly.
11:28
So someone did something well, you want to praise them publicly
11:31
and then correct privately. Now, I wouldn't say they had a
11:34
perfect track record of this. And sometimes there might be
11:37
some comments or things said out in the open and that happens
11:42
again, having that culture of being a little bit hard.
11:47
It's like we are a team, we're high performance team.
11:50
You wouldn't, you know, expected an NFL or NHL team to talk nice
11:56
and be worried about, you know, what people are.
12:00
People's feelings are when something messes up or they lose
12:03
a game or what have you, right? Everybody's there to do a job.
12:07
A high performance team takes high performance coaching and
12:09
high performance leadership coming from you.
12:18
That said, these senior managers and the CEO, if there was an
12:22
issue or a problem with the company or what was going on on
12:25
a project, they did want to know.
12:28
They want to be bothered 24/7. But if it's something that
12:31
warrants it, they definitely want to be in the loop.
12:33
And there should be that openness that you can come and
12:36
approach people and bring suggestions, questions, and
12:39
there's an open mind and a real hunger, if you will, to improve
12:44
and do things better. And then responsibility is very
12:49
clear. So communication have a clear
12:51
communication being very specific of this is your
12:54
responsibility. If you made a mistake, you know
12:57
this how it approach it, but you take care of it, right?
13:00
So being explicit with what people decisions people can
13:04
make, how they should approach it when you want them to come to
13:09
you, when you want them to take care of it and just handle it
13:13
themselves and give them some freedom and some and guidance to
13:17
kind of do their their thing as they will.
13:20
And you want to be a coach, you want to be a teacher, not a
13:24
dictator. Focus on you know what, how wide
13:30
should help build confidence and build up leadership.
13:33
You need strong leaders in your company.
13:35
It needs to start with you. But that conversation needs to
13:38
be ongoing that this is what you're responsible for.
13:42
This is how you, if it's like a project manager or something,
13:45
this is how you handle the subcontractors.
13:47
This is who you need to take care of.
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And I'll take care of my you know, what's on my side of the
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line. You take care of of what's on
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your side. 4th lesson hit me when I started
14:40
working this $100 million construction company.
14:42
There I learned something about sales that most contractors
14:46
don't understand. And sales, yes, obviously
14:49
selling the project is one part, but you need to sell it to
14:52
subcontractors. You need to sell to your project
14:55
managers, you need to sell it to the ongoing clients that they
14:58
made a good decision and their house is going to be done and
15:01
it's going to be amazing. So you always want to be very
15:04
straightforward with clients and set expectations early.
15:08
They should know ahead of time what it's gonna cost, how long
15:11
it's gonna take, what the communication is going to be
15:13
like, what they are able to access and when they cannot
15:17
access a property. All of this will just increase
15:21
their trust and lay out guidelines for them as a client
15:24
that you need, you need to be able to manage your clients may
15:28
not sound the greatest, but essentially, just as you would
15:31
manage your your company, you need to be able to manage your
15:34
clients and you know those expectations, access all those
15:38
kind of things and let them know when things aren't perfect.
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You don't want to tell them like every little thing that goes
15:44
wrong, but if there's a deficiency, if you've gone over
15:48
schedule, if the budget's over, you need to call them, let them
15:51
know right away. Even if it's bad news.
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They at least like 99% of the time will be at least happy that
16:00
they have a contractor and a company that will tell them when
16:03
something is is wrong instead of trying to like be shady or try
16:06
to cover it up or waiting until it becomes escalated into a
16:10
larger problem. So when something comes up, nip
16:13
it in the bud. Call the client, let them know
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and really make sure that you are 100% open with the clients.
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And the the the other thing I'll mention here is excuses.
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Just as you don't want your employees or people on your team
16:37
making a bunch of excuses, your clients don't wanna hear it.
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You know all but you know it. It rained, there's too much
16:43
weather. I my guys didn't show up early,
16:45
right? This just pretty much shows that
16:48
you as a company owner or you know, a company can't handle or
16:53
don't know what you're doing. Yes, there are legitimate
16:56
reasons why things happen and you can express that, but don't
17:00
be quick to make excuses or always make some sort of story
17:05
to justify things. Oftentimes you can just state
17:09
something, state it clearly, state the reason why, and that's
17:13
it. Move on.
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If you make a big deal out of it, they are going to make a big
17:16
deal out of it. So just let them know this is
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what happens, this is what's going to do, and this is what
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you're going to, you know, take care of.
18:08
Sometimes the improvement you avoid a lot is actually what
18:11
makes you successful, and that's exactly what I noticed in this
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$100 million construction company.
18:16
Less than 5 is something I didn't really like at first, but
18:20
it was necessary and that's operating on systems is the
18:23
strongest leverage that you have.
18:35
Making a jump from being in a smaller company to a larger
18:38
company you one of the quickest realizations is that everything
18:41
has a system. There's a lot of
18:42
compartmentalization and things need to work and flow in certain
18:46
ways. And often even systems that may
18:50
seem outdated but have been perfected over time can make
18:55
huge impacts and really are the backbone of the business.
19:12
I can remember getting to this company and we essentially had a
19:15
lot of paperwork, lots of binders, lots of papers.
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And this was a while back, but still we were in the digital age
19:23
and I was thinking why isn't this more digitized?
19:25
Why don't we have better ways of doing communication?
19:29
This company was a route had been around for decades.
19:32
So a lot of these systems had been implemented over time and
19:37
but also perfected overtime. So even though they were using
19:40
what I would consider outdated methods, the actual systems were
19:44
very efficient and very effective.
19:47
So realize that sometimes you don't need the newest, latest,
19:52
best new thing out there. I know a lot of people like
19:55
right now it's like we need AI or you need all these fancy
19:59
different softwares for this, that and the other thing.
20:01
And this is what we help set up for clients.
20:04
So yes, I would 100% suggest that, but realize that growing
20:08
an amazing business doesn't always mean the latest and
20:13
greatest. It means finding something that
20:14
works and is repeatable and consistent.
20:17
You know, going back to lesson 1, it's about repetition and
20:20
consistency and that is really where your systems are going to
20:23
live and grow and can change over time.
20:27
But in this particular case, there was always a lot of
20:30
information that was passed a new project getting started.
20:34
We got a binder, the schedule, the selections, the trades, the
20:39
clients information if we needed it, the lot plans, everything
20:44
was in there. And this preconstruction process
20:48
is one of the systems where it can really differentiate a
20:52
company that's probably only gonna do a few 100 million a
20:55
year to one that can grow at 100,000,000 + a year.
20:58
Having an amazing preconstruction process that
21:01
everything by the time the project actually starts and, and
21:05
ground is broken that there has been so much planning, there's
21:10
really nothing left to chance. There might be small
21:13
fluctuations and things that pop up on the job, but there's been
21:18
so much that has gone into it and they've done so many of
21:21
these projects over and over again.
21:23
That is just, you know, follow the plan and and keep, keep,
21:26
keep it on the tracks and it will be a success.
21:48
As I as I spent more and more time at this company, we started
21:51
to realize that there was no part of the business that didn't
21:55
have some sort of system documentation plan.
21:59
There is nothing left to chance and that every part was a
22:06
process that moved into the next process.
22:09
Regular meetings, regular information, communication, how
22:13
a client was onboarded, what happens when there was a dispute
22:16
or or something came up. Everything had a way of getting
22:21
done throughout the company and that's what enabled the growth
22:25
and the size of the company just to function at extremely high
22:28
level. How many contractors don't have
22:58
strong system and that really holds back your growth.
23:01
If you want to systemize and scale your construction company,
23:04
you can apply to work with us in the first link.
23:13
Most contractors don't have strong systems and it holds them
23:16
back from really growing to their potential.
23:19
So if you want to systemize and scale your construction company,
23:22
you can apply to work with us with the first link in the
23:25
description below where we will work with you one-on-one to give
23:29
you everything you need to grow your company.
23:35
Most contractors don't have strong systems and that holds
23:39
back their growth. So if you want to systemize and
23:42
scale your construction company, you can apply to work with us.
23:46
Click the first link in the description where we will work
23:49
with you one-on-one to give you everything you need to grow your
23:53
company. Lesson 6 came from the team of
24:14
this $100 million construction company and helped me triple my
24:17
revenue with this lesson and that is moving with speed.
24:31
One thing that was quite evident was how fast everything moved
24:35
and how fast they could turn around a house, how fast
24:37
communication moved, how fast they could get a contractor to
24:41
site when needed. Speed to lead wins the deal.
24:45
So everything from the beginning to how fast can we get in
24:48
communication, how fast can we get someone into the pre
24:51
construction and design phase. Everything as I mentioned had a
24:55
system and a process and they were designed for speed.
24:59
So fewer decisions need to get made because they already had,
25:03
were thought of and were able to get into deals.
25:07
Work, you know, that can be done today gets done today, not
25:12
tomorrow. There is a kind of a problem, if
25:16
you will, with a lot of contractors, especially newer
25:18
ones where you get so busy that you're kind of happy when
25:22
there's some sort of delay at a project like, oh, we can't get
25:25
the windows in now I can give the client an excuse, you know,
25:28
we can't be in your project this week because we're waiting on
25:31
windows or don't pass the buck. If there's a way to get in there
25:36
to keep production on track. Do not push schedules out one
25:40
day today and then you lose another day next week and
25:43
another day and by the end of the project you're out weeks if
25:46
not months. You really need to adhere to a
25:48
schedule and make sure your subcontractors are also applying
25:52
that team amount of urgency to getting done.
25:56
If they say it's going to take five days, they need to get it
25:58
done in five days in your schedule.
26:01
Yes, you may put an extra day of buffer, but they know that
26:04
they're in your good graces if they go a day over.
26:07
And you really need to keep your foot on the pedal for everything
26:10
throughout the business. And everybody knows speed is
26:14
important. Not the kind of speed that leads
26:16
to like rushing and not following the process or making
26:21
bad decisions, but speed. As far as steady, everything
26:26
started out. We don't wait for anybody or
26:30
anything. If we need to call a supplier,
26:32
call a subcontractor and get them to site earlier.
26:36
There's no excuses for things moving slow or for delays on a
26:41
project. I was working as a project
27:05
manager in the company. I noticed that the way they
27:07
communicated and it was quite incredible they made.
27:17
I was working as a project manager in this company.
27:19
I noticed that the way they communicated was incredible and
27:23
it made a lot of clients want to work with them.
27:25
Trades people want to work with them even if they weren't always
27:28
happy about it. So less than 7 is how is the
27:31
most important part of the business and that is
27:33
communications. When we think about
27:42
communication, it's often, you know, I need to talk to people
27:45
and we need to talk back and forth a lot or send a bunch of
27:47
emails. That is like a backup.
27:51
The first set of communication, the base is people should be
27:56
able to find information about their project or whatever
28:00
happened by themselves. So when they need to communicate
28:04
with you, that means typically you haven't done your job with
28:09
having information available for them.
28:11
So if you have clients asking about schedules, budgets, what's
28:15
going on on site, how you do this kind of thing, you need to
28:19
have an expectations document and they should be educated and
28:23
how your business runs and what's gonna happen and you
28:25
should have weekly updates for them.
28:28
They should be able to see schedules and all those kind of
28:31
things. There should be an info book for
28:33
every project. When I say book, not a physical
28:36
book, but there should be like a base information that any
28:40
project manager, estimator, designer, real estate agent,
28:45
whoever needs it, you're able to provide full communication of
28:51
information to them. So that is your base level of
28:54
communication is having everything in an organized
28:57
system, could be a Google Drive folder, it could be a project
29:02
management software, but everything in one place where
29:06
you can give that information to people.
29:10
The next thing is when you're operating on a lot of projects
29:14
and a large company and even if you're not at a large company
29:17
now, but you, you aspire to be one day all these systems and
29:22
this way of working in a business is going to help you no
29:26
matter what size you're at. And so we had weekly schedule
29:30
production meetings where they were very quick.
29:33
Everybody comes in and the depending who's responsible for
29:37
what they will say, which project it is, what, what stage
29:41
they're at and any issues that have popped up.
29:46
If you have a larger company, you need to probably do this
29:48
weekly. If it's a smaller company, maybe
29:51
every two weeks or or month potentially.
29:54
But there should definitely be a check in between somebody every
29:58
week to see where every project is at, if there's any issues,
30:03
any risks, any, anything at all that may hold this project up
30:07
or, or any problem so that they can get sorted and so that it's
30:10
communicated to somebody who can help and unlock whatever needs
30:15
to get unlocked. The other form of communication
30:27
is of course with your subcontractors and considering
30:31
if you're operating a large business, majority of the
30:35
production personnel are going to be subcontractors.
30:37
You're unlikely, you know, have like a 10/20 person carpentry
30:41
team, but if you do, this could be applicable to your field
30:44
teams as well. But calls and emails
30:48
subcontractors, just as I mentioned, you should be telling
30:51
your clients about what's going on.
30:53
You should expect your subcontractors to be providing
30:56
some sort of reports and you need to be checking on them.
30:59
They should be calling you with any issues.
31:01
Anything they're not understanding, there should be,
31:04
again, all excuses for them for not meeting a scheduled deadline
31:08
and not communicating with you as far as what's going on on
31:12
site. As a project manager or site
31:24
Superintendent, sometimes ask like how often do you need to
31:28
actually be on site? And typically every project you
31:34
should be on site every one to two days.
31:37
Now, if you're running custom type homes, your project
31:41
managers are probably only going to be able to handle maybe a
31:44
handful. But if you have great systems
31:47
and you're able to have similar types of projects like this and
31:50
you've got a good management structure, you could have one
31:53
project manager potentially having 7/10/15 different
31:57
locations that they are able to manage because of the great
32:01
systems and the great subcontracting team that they
32:04
have. In that case, they're probably
32:06
visiting each site every one to two days potentially on site.
32:12
They're doing a quick walk through quality control, making
32:16
sure the subcontractors are there and doing their jobs,
32:18
taking photos to deliveries come up.
32:22
And if you do have show homes, they are checking the show homes
32:24
constantly and calling in any trade to come fix any little
32:28
minor things that may be wrong with the show because they need
32:31
to look pristine as I mentioned earlier.
33:05
The other part of communication is kind of like the non verbal
33:09
if you will, and the culture communication.
33:11
So as a team, there was always this sort of unsaid
33:16
communication almost that we are a winning team, we produce great
33:20
projects, we have great quality, we are proud of the work that we
33:25
do. And this is something that you
33:28
can incorporate and maybe can't be taught specifically of like
33:33
getting that through your whole organization, but this is the
33:36
type of mindset and communication that you need as a
33:39
company that you're amazing company, you do great work, we
33:43
move quickly, We have a great price product that has super
33:48
high quality and people should be proud to know that they got a
33:53
home built by us. And this is what really
33:56
differentiates these large contractors who are able to do
34:01
large scales of business and sell at high margins and make
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good profit is that they've got this culture and this winning
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team environment and it communicates to the clients, to
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subcontractors, to everybody throughout their organization.