10. How Builders Are Adapting To Change With Trevor Salter

This is Professional Builder Secrets, the number one podcast to help you grow your building company safely and securely. Brought to you by the association of Professional Builders. Join us every week as we talk to industry experts and your fellow professional builders on everything you need to know to generate more leads, more sales and higher margins while improving the building experience for your clients. Hello and welcome to the Professional Builder Secrets podcast, a podcast by the association of Professional Builders for building company owners, general managers, VPs and emerging leaders. Here we discuss all things running a professional building company from sales, processes, financials, operations and marketing. Today I'm joined by Trevor Salter, managing director of Salter Builders, a local boutique family run business operating in Nelson, Tasman region, all the way in New Zealand, building bespoke, architecturally designed homes. Trevor, welcome. How are you doing today?

Yeah, very good. Thanks Bosco. Nice to catch up finally.

Yeah, I really appreciate your time today. All the way from New Zealand. Trevor, let's start off with something really simple, but tell us a little bit about Salta Builders and what you specialize in, just so that the audience knows a little bit about what you do.

What we generally focus on now is the higher end of the market, delivering houses that are outside the norm. You know, generally our clients building their last home, not their first home. So they may have been through the experience before and they've been able to obviously come up with ideas on how they want their final house to be. And one of the things that we specialize in is difficult construction, which here in Nelson is a lot of hillside construction. So building on steep slopes where access is not that great. Basically anything that is outside of the ordinary, where what it's allowed us to do is really narrow the field that we're competing against because most builders generally will steer clear of anything that's too difficult. So it gives us that ability to be bespoke and be a specialist in what we do.

What was your background prior to getting into the building industry? Is this something that came naturally to you? If we go back down memory lane, what compelled you to get into was.

One of those things that when I was at school, it was definitely something that I wanted to do. Always was good with my hands. I really enjoyed making things and that was anything in my childhood where I could actually create something. There's a lot of satisfaction in creating a physical thing that you can then look back and go, that's taken a lot of effort and it looks quite impressive. So when I was at school, best two subjects were woodwork and technical drawing. So it was leading me down that path. I had a friend, a really good friend who joined the New Zealand Navy and he was a year ahead of me and he sort of sold me on that idea. So I had to put the building career on hold and set about joining the Royal New Zealand Navy and I'm glad I did. It was a really good experience. Spent several years traveling, you know, saw the world, but it wasn't a long term thing for me. And I got out of the Navy and ended up on the west coast of the south island, actually working in the tourism industry. Again, that was a fill in for me. But it ended up being nine years of that before I decided it was time to actually follow my passion and follow my dream and actually go into the industry. And my partner at the time, who is now my wife, knew somebody who put me in contact with a builder in Christchurch and that was my opening to actually get into the industry. So yeah, he offered me a job and it started from there.

As they say, that's the start of history right in the making.

Absolutely. That was a pivotal point for me.

So tell us a little bit about your background. You talked about being in the Navy and you got into the industry and there was a lot of interest. What was your background prior to getting into the building industry? Did you have any of those technical tools around you and when you did get into it, what were some of the things that really progressed your career at the start?

Yeah, I guess my background, I was always really good with my hands. I've got the ability to pick those sort of skills up quite quickly. So I've had confidence from an early age just to grab something and run with it. Quite often throwing yourself in the deep end is the best way to learn. Those skills I think have been there since childhood and I've found that training people, that it's really easy to train somebody who has a natural ability. Somebody may want to get into the industry and become a carpenter or a builder, but it's really hard for some people and they really struggle and I think I've been lucky that I've had those skills. So yeah, I think it's some people are born with the ability to do practical things a lot better than others.

Trevor, looking back, what compelled you to get into the building and construction industry today and looking at it today as well, has that purpose changed over time? What excites you about it? Looking back then and looking at it now, has that mantra changed for you or is it sort of the same purpose moving forward?

I think the first thing that compelled Me to get into the industry was I wanted to build my own home. I'd had the ability to help my father build his house, and I'd worked on a couple of other projects where I had a taste of what building was like. So it's one of those, I guess it's a Kiwi dream for a lot of people to build their own home. So I thought I knew a bit about building until I started to train. But, yeah, they training and learning proper carpentry skills, there is far more that you have to learn than, you know, you obviously, you think that, you know. So the struggles that I had in the beginning were sort of, first of all, getting fit to the job. It's very demanding on your body, and it's not something that you're doing the same thing all the time. There's so much variety. And when you're out on the building sites, one day you could be standing heavy frames, and the next day you're not actually carrying anything. You're just doing really light work. So I quickly learned in the early stages that I needed to keep fit and I needed to strengthen myself by just doing regular exercise outside of work as well. And, you know, even lifting weights two or three times a week definitely helped. And it cut down a lot on injuries because there's quite often situations where you're cold lifting and you're not really warming up, and then you're lifting something heavy and you pull a muscle in your back and you go, you know, that was stupid. I didn't sort of think about that.

So, right, let's dig a little bit deeper into the struggles that you encountered when you first started out. So you talked a little bit about that personal physical fitness as part of those things that you needed to focus on. I believe that from all the builders that I've interviewed and spoken to, you know, they got into this business because they had a passion for building, but you don't necessarily get an understanding of running a business. You sort of learn that as you go. Was that the same for you when you first started out with, you know, when you look back at your struggles now, would you say that, you know, learning how to run a successful business and what it takes to run the operations, was that where some of your struggles were, you know, or when you look back, what were some of the other struggles that you may have had?

Absolutely. That starting out in business, once I was qualified, starting out in business was a massive learning curve, because the industry that we have, and it's still pretty much the same now. You do your apprenticeship, you learn how to become a craftsman or a builder, and you actually learn the practical skills really well. But the training doesn't teach you how to be a business person. And it tends to be a problem in this industry, even to this day, that people go out there and I go along and hopefully everything will fall into place. And I was guilty of that. I thought I knew more than I did. And, yeah, there was. Knowing what I know now, the best advice I could ever give anybody is, before you even think about it, get mentorship from someone who knows what they're talking about. Talk to a builder who can actually tell you how to run a proper building company. And it's one of those things in the industry here where many builders keep those things close to their chest and they don't like to share that sort of information. I think they're a little bit concerned that they're giving away secrets that someone might get the better of them and actually outperform them. Or what tends to be something I think is a problem for many is they don't want to expose themselves because they know they're not doing it properly.

I guess the other question that I had for you is, when you look back when you first started and where the industry's evolved, what was the industry lacking at the time when you got into the business? Was it a lack of mentorship? Was it a lack of direction? Was it a lack of resources to running a business? You know, where did the industry lack? You know, when you look at it.

Now, I think you answered that quite well, because I think all those things were lacking. There was no clear guidance on where you could go to get that information. So it was just I'd ask, like my boss that I used to work for, he said he'd help me, and when it came down to it, he couldn't really help me because he didn't really know what he was doing himself. So there was definitely a lack of avenues out there where you could actually find the information that you needed. And I think it's still like that today. It's not as bad. It is still one of the reasons why so many building companies don't last. People just set out thinking it's just all going to fall into place, and it really comes down to having a plan in place, and it's not as straightforward as many people believe.

So I guess that's the beauty of the Internet today, is that we're starting to get a little bit more connected, but it's really how you use the Internet to your benefit. You know, let's fast forward a few years as you start to progress with your business. And how did you first hear about the association of Professional Builders? And how did you originally get involved working with them?

When I first heard about the association of Professional Builders was actually, the timing was right for me because they had been sending emails, I'd been getting them in my inbox, but I hadn't really. I had a brief look at them, but I hadn't really taken much notice. But it was also that period where my business, I was working long hours, I was struggling to make a real profit, and I was at a point in my career where I was actually thinking, do I carry on? You know, because it wasn't turning out the way I expected. So I needed something, I just didn't know what it was. And, yeah, things turn up at the right time. And the app, I looked into it initially, I think they have the answers and mulled over it for a little while and thought, well, what have I got to lose? I need to try something. So once I did delve into it properly and realized what they had to offer, I realized they had the answers to my questions and there's no turning back from there. And when you look back over your life, at pivotal points in your life, that would have to be one of them. It's where the direction changed quite dramatically.

So let's talk a little bit about your relationship with the association of Professional Builders. How did working with them and the mentorship really elevate and change your business? What were some of the key takeaways that you had from learning from the things that they had to offer to you?

One of the first key takeaways that I discovered was how to correctly price in and recover your fixed expenses. I was always under the understanding that everything had to be covered with your labor rate. Once you understand that, that is not the case, because as your business evolves, you have more and more running expenses, and that has to be recovered from every job. So once I understood that and realized we could apply that to the pricing that we were doing, it was very quickly did that to about three jobs. And that started the process where I felt like I was actually working. Every hour that I worked, I was actually being paid again, because the frustration factor of feeling like you're working for free when you are outside of what you've priced into a job, if you've allowed a certain amount of hours to that job and you know that you're going over that, that you get really frustrated you think you're working for nothing, but once you understand that the fixed expenses critical. So there was that also knowing the realistic margin rates that should be applied and knowing that they should be applied to everything. Like I said earlier, the first three jobs, we did that to really change the game for us. And the money side of things turned around quite quickly because they were reasonably big projects.

It sounds like you had a lot more financial awareness of your costings and your projections to your clients as well. From what you're describing, if you look back at some of those key terms, turning points for your. For your business acumen and path, what were some key applications that made significant impact to the business? You know, it sounds like you're talking a little bit about the calculations and costings as well, but let's talk a little bit about those key applications through the mentoring. And I know the mentoring has different levels, so I'm sure there were things that you were learning as you were growing through. But I'm just curious, what did you apply that really made a significant impact to you?

The mentoring basically made me accountable initially. So I started mentoring the mentorship with Andy, and he basically put some fairly hard deadlines on me, and I had to set myself some targets and putting a plan together, knowing where I was going, because that was. I was adrift. And once I set a plan in motion and actually sat down and decided where I wanted to be, how much money I wanted to make, and what I wanted my business to be, again, something as simple as telling me to specialize. Most builders, when you tell them become a specialist, they absolutely freak out. They go, but I'm going to miss out on all this other work. I think a lot of it is just belief. You just got to believe. You got to believe in what you're being told is actually true.

Let's talk about success a little bit. You know, everything that I know about success is that it leaves blueprints. And I'm sure your business has left a blueprint behind and moving forward as well. What some of the key reasons for the success of your business? You talked a little bit about transforming your business into a niche speciality. I think that's a really powerful statement because a lot of businesses don't look at that with the lens of opportunity. They might look at that and go, well, we're missing out on that market. The rest of the bigger market. What were some of the key success blueprints for your business?

The key success were, like I mentioned earlier, making sure we were recovering the right amount of money per job and having a plan in place. Right. And sticking to the plan. So that means setting goals. And some of the goals that I set, I initially thought, you know, they're pretty high. But if you don't set high goals then you're probably not challenging yourself enough and it's too easy to sort of go off track. But when you set reasonable goals and put a plan in place on how you're actually going to achieve them, surprising what you do on a daily basis to make that happen. And the goals that we set, we exceeded them. We exceeded them massively. And it doesn't print that blueprint in you because you know how to succeed. Okay. You have to celebrate the fact that you have succeeded and understand that you can do it. And then, okay, well now that I have, it's time to reset some better goals and go after that again. And that's still my philosophy to this day is that. And the other thing is I still look to mentorship through other areas. So the self development side of things has been a key thing for me.

Trevor, if you had to look at the industry holistically today, what are some of the pressures that builders face today as well? And I'm curious to know your thoughts, if it's changed pre and post Covid era as well. What are some of those key pressures do you think that people, the builders specifically face today?

The pressure that a lot of builders face, even on a day to day basis is the fact that they have to work so long and hard and it's a lifestyle. Anyone who gets into this industry and thinks they're just going to work from 9 to 5 and have their weekends off is only they're kidding themselves. So the pressure is always there as far as running your business to its potential. But also you're constantly dealing with the pressure of delivering for clients. Clients always seem to, they come in all shapes and sizes and all sorts of different expectations and some can, obviously, if you allow it to happen, can add a lot of pressure to the situation. Post Covid it's interesting how things have changed here, especially recently. It's almost evolving on a daily basis now and we're finding things that we didn't even expect that were coming. So the last lockdown we had here they locked down the whole country, but within three weeks we were allowed to go back to work. But they still had Auckland in lockdown. Now initially what they didn't realize is a lot of manufacturing is done only in Auckland. So it quickly started to have a domino effect where certain things were getting harder to get hold of and we're still dealing with that now. And even though Auckland is up and running again, the supply chain issues are just getting longer and longer. And every day now, we're just finding things that we didn't expect. I just had today, actually a contractor come back to me and say that he couldn't even look at doing anything for us for three months.

So timelines are being affected as well. How are you coping with the challenges and risk that comes with the supply chain issue? And I think everyone here is dying to hear. We have listeners from everywhere. We have listeners from Canada, the U.S. new Zealand, Australia. And I think the question that everyone is asking is, are we going through the same issues in different countries in New Zealand and Australia, in North America as well? So how are you coping with those challenges when it comes to the supply chain issues as well?

I guess forward planning was key for us, and we knew this was going to be a problem quite a long time ago. My merchants, they have a sales rep who calls on me on a weekly basis, and they keep us reasonably well informed. And because our company generates a reasonable amount of income for them now, they look after us quite well. So they keep us informed as much as possible. And what we have had to do in a lot of situations is look well into the future to plan timeframes when we would be ordering things, and then they will give us timelines on when they think we should be getting those in the system. And this year in particular has been quite trying on our cash flow. We've basically, since the beginning of the year, spent over $250,000 on stuff that we yet to put into our builds.

So we're buying basically got them, but.

We just can't put them into the build because it hasn't got to that stage. But it was a combination of not only the supply, but things actually going up as well that price increases. So.

And you also have to mitigate and manage that risk that comes with the forward buying, because you know that you know the work is coming, but you also want to make sure that you have the storage for the supplies so that you can deliver on that work. And that also takes a fine balance, which is pretty incredible to hear. Do you feel that forward planning and bulk buying or having the relationships with the vendors so they can keep you informed. Do you feel like these are things that all builders should be thinking about moving forward?

Yeah. And it's something we have been trying to instill in a lot of builders around here, because you don't want people panic buying. Obviously, if you plan well enough ahead, then you've got enough time to make it happen. But if you don't plan well enough and then you leave it to the last minute, then the panic sets in and people make silly decisions and end up buying far too much because they think, well, if I can't get what I need, I'm going to make sure I can get as much as I can and hold onto it. Which doesn't help anybody.

It's like the toilet paper effect during the pandemic when everyone was panic buying, Right?

Absolutely.

So how is the industry in New Zealand embracing innovation and what are some of the advancements or key advancements in trends you're seeing in the market today? When it comes to the residential construction and also bespoke building, what are some of the areas that you were paying attention to moving forward?

So innovation in this industry is always evolving and it seems that as time goes on, we get more and more products and things that we can use. One of the key things that's been become almost mainstream here now is the use of waffle slab concrete floor systems. Right now, they're basically a raft system that sits on top of the ground so there's no footings. And this was brought about by the Canterbury earthquakes that we had several years ago. That became a very good area where engineers could study exactly what happened, because we get earthquakes here on a regular basis and the earthquake code is, well, building to survive earthquakes is a major component of what we do. So that has changed industry quite a lot in about the last five years. And yeah, so we've gone from digging foundations into the ground to basically now having the house just sitting on the ground and in an earthquake situation, that's supposed to just ride the earthquake out a lot better and it can deal with it. Other innovations would be the use of solar, especially here in Nelson, and many people now putting solar panels on and. But still being plugged into the grid so that they've got the option to generate their own power. But if they don't generate enough, they can still draw from the national grid. And that has a lot of implications for heating homes, because a lot of people go with an underfloor system and they can be quite expensive to run. But if you can set that up to solar, there's all sorts of things. And this is one of the great things about the niche market we're in, because the people we're building for generally can afford to go for innovative ideas and innovative products that come along yeah, we get to see some really cool stuff.

It sounds like it. And I was looking at your website and echoing praises to the quality of the design work. You can really see the architecture and that bespoke lifestyle come to life with some of the visuals. Your website, Trevor, you know, just as a side note, with the supply chain as well, where does most of your resources come from? Is it the us, Is it Asia, is it Australia? And do you find that geographically, are you having the same challenges with the same geographic areas? Out of curiosity, yeah.

So the supply chain here, a lot of stuff is manufactured in New Zealand, but we do actually source a lot of stuff from Australia. Right. So generally the stuff coming from Australia is not too bad. It has got a. Obviously a lot harder than it has been in the past. You have a company in Australia called James Hardy. They make a wide range of fiber cement products. Now, if you want certain products like linear weatherboard that they make, which is a fiber cement weatherboard, the delays for that now are six months. So there's a fair bit of floor planning there to make sure that you do get those. And obviously another thing that's used here a lot is Canadian cedar. So again, that is now what they do is they import in the sawn timber and big slabs and it's brought into the country and then it's actually seasoned outside here for six months before they turn it into the final product. So again, the delay on that is now six months as well. If we, you know, generally I think a lot of people are now turning to what is manufactured in New Zealand knowing that we can get it sooner. We're lucky as far as timber goes. We grow a lot of timber here and we pretty much, as far as I'm aware, all the timber apart from cedar and specialist products, all the general timber we use in construction is from here.

Let's switch to another hot topic and this is around the shortages of skilled trade workers or shortage of skilled workers as well. What are you doing to address this shortage in your industry, specifically with your company as well? Do you recognize it as an issue in New Zealand and what are you doing to try to overcome that?

Shortage of labor has definitely been a hot topic lately. And we've been involved in a working group through the Master Builders. So locally I sit on the Master Builders executive, currently the vice president of the Nelson Tasman Master Builders. And we did a working group with the training authority that trains apprentices and they gave us an insight into the pipeline of work that's coming. And it seems that most Parts of the country are actually in a growth phase, so they have highlighted the lack of skilled workers. So we've had three of these working groups. We've tried to identify how we're going to recruit all these people into the, into the industry. And we're looking at other areas that you wouldn't normally look. And one of the biggest untapped parts of them, of the market is females attracting females into the industry. And we actually have a female apprentice of our own and we find that they're definitely up to the task. I guess it's a, you know, it's a hard thing for some women to think, okay, I want to go into a male dominated industry, but so there's that and generally just trying to put it out there that even if you're, say, in your 30s or even your 40s and you had enough of what you're doing, that it's still not too late to retrain, the opportunities are there.

And that's a pretty inspiring thing to hear that. You know, you talk about having a female as an apprentice and, you know, this is something that we, we look at as legacy building. We're seeing a lot of different people and brands taking that initiative to introduce this workforce to all genders as well. How do you feel you are leaving a legacy for future builders? What are some of those successful milestones that you're really proud of over the last few years?

The legacy I'd like to think that we're leaving is I like to consider, well, think of myself as a leader as opposed to a follower. And one of the phrases we use is we don't run with the herd, so we look to do things differently. And even my dealings with the APB has allowed me to pass that information on to several people in the region here. And I know there are several people here who've become members because of what I've actually passed on to them through my work through the Master Builders. Again, trying to mentor younger members. So once somebody is accepted as a younger member, that we actually spend some time with them and steer them in the direction of where they can get the help. It's something I wish I had. Someone comes to you and say, hey, look, I can tell you what you need to know if you're prepared to listen, if you want some help, there's help here. And I know where I can steer you in that direction as well.

Yeah, that's the power of mentorship, isn't it? When you have someone that can sort of hold your hand and take you through Those hard times as well. Here's a bit of a hard and personal question. What advice would you give a younger version of yourself to getting into the industry? Today? You have this sage wisdom about what you do, obviously, and you've got quite the illustrious career. But looking back now, what advice would you give a younger version of yourself?

Be careful what you wish for.

I was worried you were going to say that.

Yeah, I think as far as the building industry goes, you've really got to ask yourself quite a few questions and actually think it through because once you sit down that road, you'll find yourself one day in a situation where you go, this is not what I expected, this is not where I wanted to be. So if I could give my younger version of myself the best advice, it would be find yourself a mentor. Find somebody who knows what they're talking about and learn as much from that person as possible.

It sounds like you found that mentorship with the association of Professional Builders, with Andy and the team. It sounds like there's been a lot that's been shared with you that you've managed to apply as well.

Absolutely.

Well, Trevor, I could talk to you for hours on the industry but I think I'm going to say my most favorite question for last and this is it right now and I'd love to hear your take of it. Obviously looking at it from a New Zealand perspective as well. What is the state of the residential construction industry in New Zealand and what is it evolving to moving forward, in your opinion?

The state of the residential building industry in New Zealand at the moment is it's at a level I've never seen before and what I mean by that is the demand. There's so much demand out there that especially here in the Nelson region, if you pick up a real estate magazine, it's minute, it's so thin, there is hardly any listings because people don't want to sell their house because they know there's nothing available. There's so many people looking to build. You look at certain subdivisions and the stages they haven't even developed have been pre sold. People have signed up with a company who's going to build their house in two years time. We've never seen this before and it's because of the situation the world is in at the moment. I think for New Zealand a lot of people look as this is a place to escape. There are a lot of New Zealanders who are still trying to get home. It's a good time to be in the industry and I don't think we've ever been able to look so far into the future and understand that if you did want to get into it, then, you know, times are good and they're going to be good for quite a while from what we believe.

Well, for our listeners out there, Trevor, any final words of wisdom or sage advice? Outside of be careful what you should wish for, is there anything you'd like to end our amazing interview with today? As far as intellectually stimulating our audience?

Yeah, I guess there's probably no way to sugarcoat the fact that you have to work for it and you've got to work hard and you've got to put the time in. But if you do set about down that road with the right attitude, knowing that you have an end goal, then, yeah, you can be extremely successful in this industry. And my goals moving forward, to put us at the. At the top of the industry and to make as much money as possible. It's not about making money at the expense of people. It's about making money in a way that helps all the people that not only we build for, but the people who work for us as well. So I've found as a business leader and an employer of quite a few people, that leadership is really important. And if you can inspire people and get them to sort of buy into your journey and the way that your whole culture of your business and how you can actually project that moving forward and how you can help them also be successful. And I've found that with the people who work for me that I give them opportunities that a lot of other employers won't because I consider them to be my family. And every one of those people have a family they have to support. And I feel that the burden rides on my shoulders to make sure that everybody does well out of our business. I think embracing that type of attitude has helped massively. You know, we've got extremely loyal staff, and they're also, you know, amazingly talented people who I can delegate to. And probably the number one thing I could give advice to anybody in the industry right now, if you feel like you can't escape, you have to get yourself in a position where you can delegate. Delegation is what sets you free. And I know that, I know that. I've been there.

What an amazing story of mentorship, goals, mindset, you know, and just real forward planning and legacy planning as well on your part. Trevor, thank you so much for being with us and we really appreciate your time and insights today.

Thank you very much, Bosco, for allowing me to obviously share my story and hopefully it inspires somebody.

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