114. Expanding To Design Build With Liam Marshall

I was probably a little bit naive in thinking that it was going to be an easy time to start, but it was probably the worst time to start a construction business.

Welcome to Professional Builders Secrets, the podcast for building company owners wanting to grow safely and securely. I'm your host, Will Blunt, and today I'm joined by Liam Marshall from Melaleuca Homes in New South Wales, Australia. Liam, welcome to the show.

Thanks, Phil. Good to be here.

Yeah, awesome to have you on. We had a few technical issues before the show, but we've overcome them and I've finally got a chance to learn more about your building company, so I'm excited. What got you into the building industry, Liam?

So I actually started out becoming a chef and I did my whole qualification being a chef and then kind of got a bit over the hours and just wanted to do something different. So. My brother's actually an electrician and he sort of suggested me going to building. Um, and then, yeah, from there just started.

How long ago was that that you were a chef?

It would have been about 13 years ago.

Interesting.

I was doing it when I left school and, yeah, didn't really. Didn't really turn. Turn away from it. And then, yeah, just. Just like I said, the hours were a bit horrible and, yeah, I wanted to have a bit of. A bit more of a life than. Than the chefing allowed for.

Yeah. I've worked in hospitality myself for. For a number of years when I was younger.

Okay.

And the chefs always had really horrible hours. Like. Yeah, there was big gaps and stuff where they, you know, were doing prep work and everything.

Yeah, yeah, pretty.

Pretty ruthless.

Yeah. Yeah. The. Since starting building back, don't want to change it all. It's definitely industry.

That's a good thing. So what do you love about building, then?

I love. I'm creative, so I like obviously creating buildings for people and creating their perfect home. I love seeing the excitement on people's faces, especially when we design a home to what they want. And I love handing over a new build to them and that, you know, the whole finally getting exactly what they want from that build.

Yeah, awesome. So Melaleuca Homes, you do design build you through the whole process?

Yeah. Yes. We take our clients all the way from concept stage all the way to construction and. Yeah, during. Yeah.

Is that something? Did you always do that? Did you start out building off other people's designs and things like that?

So we've always. Well, actually, ever since we met apb, we started doing the whole concept all the way through. Before that, we used to do Renovations and sort of just used to get sent plans and. And yeah, it was just what came through. We would build. So it was probably about a year and a half ago that we started doing the whole concept through the construction.

And you enjoy that a bit more than taking someone else's design and turning it into a house?

Yeah, definitely. I like. I do like having a say or guiding our clients through the whole stages and suggesting. Suggesting things for them that will improve their build. And it's nice to sort of guide you, guide the client through that. That sort of stage and watching the development of themselves and also the construction. Sorry, the build.

Yeah, yeah, of course. I mean it's kind of like if you're invol that whole process, it must be so rewarding as well. Yeah.

And you do get to know the client quite well. You could be talking to them for almost a year before you even start building. So you sort of become part of the family in a way, spend so much time with them. But no, it's a definitely good. It's a rewarding experience. And to see, yeah, to see the build done, it's, it's. It's nice to take it from paper through to the construction, which is good experience, rewarding.

What role do you play in the business at the moment?

So I'm a director and owner. So at the moment I meet with the clients once they go through our qualifying process. I still look after all the finances and obviously run and oversee the whole company.

Okay. And you've got people that manage sites and that kind of stuff or.

Yeah, so I've got four guys on site. I've got a leading hand and three. Three apprentices and also got an admin office manager as well. And it's myself. So I still, obviously still do all the estimating as well. Yeah.

You mentioned qualifying process. I'm interested to hear what that looks like. Can you talk me through how you qualify? Leads that come in. Yeah.

So when we get leads come through our funnel, we go through and page my admin manager. We'll call them and ask them a series of questions that we've put put together. It's sort of. I guess it gets rid of all the tire kickers in a way that just want to. Just want things, you know, to just want pricing for free or to sort of. Because we did do a lot of that sort of thing. And then once we get go through all those questions then we have a page of. We have a meeting and then we decide whether we want to proceed with them. The questions are Based around our ideal client. So. So we have our avatar ideal client in our head that we want to build for and depending on the way they answer their questions is whether we proceed or not.

What does your ideal client look like? What criteria do you use for that?

So they have their family, they do have an amount of income that we kind of look for combined. They are looking to. For a forever home and this is their dream home. And yeah, we do. We do try because we. We only build in a Blue Mountains as well. We are sort of marketing down in the city to sort of. Because we obviously noticed a lot of people coming up from. From Sydney. So we are. Our deal client sort of is more down there because obviously they're a bit bigger pockets as well. As bad as that sounds.

I live in Sydney, mate. I don't have big pockets.

Some.

No, but that makes a lot of sense. I guess that's a trend, people moving from Sydney, which is becoming extremely hard to buy or build in because of the expense for. For a lot of people my age and the young families moving to places like the Blue Mountains and just surrounding areas of Sydney.

Right. Yeah, definitely. And we have noticed that like I said, the trend coming, everyone's sort of moving further out, but then mountains, people are sort of moving further out as well. So it's. Right, it's a bit of a content Constantine effect.

Yeah. I think for anyone overseas listening, the Blue Mountains is. Is very close to Sydney still. I mean you can. You can comm work. So.

Yeah, absolutely. I, I used to do that when I was. Because I used to be a supervisor in Sydney and. Okay. Every day. So it's not that. It's not really that far away.

Yeah, yeah, of course. It's probably. A lot of people are probably priced out of the Blue Mountains as well, I'd say at the moment.

Yeah, definitely. Yeah, that's right.

So what kind of challenges have you run into running your business?

So we actually started the business during COVID So we started in 2020. So pretty much ever since then we've I guess been going pushing, you know, pushing uphill the whole time. So that was one of the biggest challenges that I was probably a little bit naive and thinking that it was going to be an easy time to start. But it was probably the worst time to start a construction business. But it didn't really. We kind of got lucky and it didn't really affect much. Especially when we first started out. We're just doing small jobs and little renovations and things. So people that. People that still wanted Things done or we're still happy to move ahead. But yeah, it's for us it's really just been Covid and trying to get over those sort of hurdles ever since.

It's interesting though, you've obviously come this far. So I mean if that's the ground that you've built on, pun intended. Well, it wasn't actually intended but if that's the ground you've built on then you're obviously, you know, when better times come in the, in the economy and everything like that, you'll be in good stead. Right?

Yeah, definitely. We've noticed that a lot since. I mean you could probably say like you said, we've started in the worst possible time. So everything from now is sort of seems very good for us and we've seen it getting a lot better since since then. When people aren't as. I mean there are obviously things going on but people aren't as part. I don't think so. Yeah.

What were the biggest challenges about COVID that made it hard?

Um, obviously as everyone. The supply of materials, the pricings. We couldn't, we said at the time we weren't doing fixed price contracts either. We sort of just pricing and we didn't really have a structure of that. So definitely pricing the lead times of items, obviously the shutting down of the industry as well. A lot of people didn't want us anywhere near their home at the time as well. So obviously work that was booked in couldn't get done. So that meant cash flows. Quite, quite horrible. Yeah. So yeah, it just made it. Just made it quite hard. It was sort of, it was sort of, sort of wondered why, why you started in a way at the time. But yeah, I'm glad that we, we pushed through and kept going.

It's good. Shown a bit of resilience through that period. You mentioned fixed price contracts. So previously you were doing cost plus and then you've moved to fixed price, have you?

Yep, yep, definitely. So we've decided to do that. We got suggested to do that through the APB and it is a big selling point for us now and a lot of people like doing the fixed price because it's a lot more secure for them and at least they know exactly what they're going to be spending rather than with the cost plus. It was so open ended for our clients. We did start doing. When we started doing fixed price we did a contingency amount in there to sort of allow for price rises and during that sort of really bad Covid time and most clients were Quite happy with that. Basically just had a percentage of the contract and then once the job was over, if it wasn't used, it got credited back to them or they could use it for variations during the build if it wasn't getting used. We just became a lot more open with the client during that time as well. Not to say we're not. It was just during the whole contract stage. We were very honest in saying that prices are rising and changing pretty much every week. So just made it. Just made a little bit. A bit more of an easier process with the client.

How do you calculate a fixed price for a project?

I'm assuming he was asking about the whole quoting stage.

Yeah, sure. I mean, I guess Cost plus is relatively obvious how you, how you quote it up. Right. You just put a margin on top of. Of what you. What the materials and everything are in general.

Right.

But with fixed price, I guess what factors do you consider when you're. You're pricing up a project on a fixed price contract?

So a lot of the factors would be. So depending on when we're going to be building project, we do keep in contact with our suppliers a lot just to see if there's any movement in materials, especially our subcontractors as well, because obviously the materials are going up and down as well. We also keep track of our pricing for profit calculators that make sure that we're not pricing ourselves out of like everything that we do price is, is profitable. Yeah.

That factors in your fixed expenses, right?

Yeah. Correct. Yeah. Yeah.

That's interesting. So I guess you're keeping your finger on the pulse of where the cost of materials and everything is moving so that you can price up the project in a way that's going to still be profitable for your business.

Yeah, correct. And then because we did get stuck a few times before even starting, we sort of. When we started doing fixed price contracts, we did get stuck a few times by signing up contracts down the track. And then by the time we got to build them, the margins and profit was quite scarce. So we just needed to get them done just to get them out of the way. So from, from that we're now a lot more on top of I guess what's happening around and with suppliers and contractors.

Okay, cool. So how long you been with APB for now, do you know?

I think we're coming up to about two years. Yeah, two and a half years.

I should look it up. I should have done that before the interview.

That's right. I'm pretty sure it was about a Year and a half, two years now. Yeah. I think it's.

What is the biggest thing you've. You've taken out of working with the association of Professional Builders.

We've definitely got a lot more systems in place. We're keeping track of finances and also sort of cash flow a lot better within the business. To be honest. If, if it wasn't for the app, we probably wouldn't be around now just because of where we were and how everything was tracking. So ever since joining the app, it's. We're definitely going up. Yeah. Which has been quite nice to watch. It's nice to watch the business grow and, you know, in three years we've. We've grown more than I was expecting during that time as well.

So 29th of July, 2021, you became a member. Jacob's your coach?

Yeah, Jacob. Jacob's our coach.

What kind of relationship do you have with Jacob?

I think a good one. He's open. We do the private mentoring as well. It's pretty much he's on call during. During work hours. He gets back to us within five or 10 minutes, which is great. Normally, anything, any questions we've got that are unsure about. He's pretty fast in getting back to us. He's great with guiding the business in a way. So if I'm a bit hesitant about something, gives you both sides of his equation and then kind of helps the decision making a bit better.

Can you think of an example of a question that you called him about just to kind of run by.

Yeah, so we're just going through the stage of updating our website again just because it was a bit. Sort of just didn't feel right. So, yeah, the admin had been sending him emails constantly, trying to update it and seeing his ideas and yeah, he gets back with us, back to us with his opinion and obviously in keeping with what. What the APB suggests as well. Okay, yeah, yeah, cool.

So it's kind of like a. Just an extra hand, hands on deck to give that just opinion on stuff about running your business and making sure you're going in the right direction or.

Yeah, yeah, he's definitely. He's definitely a mentor, definitely. It's. And it's not normally just. It's also not just. Just the, the business as well. It's also personal. You know, you sort of feel like you can chat to him about anything that, that you got in your mind, sort of. It's like having an extra mate that, you know, you can have a chat to. And every month we have our Little meetings and business and how everything's going and where, where everything is. Yeah, definitely, definitely helps.

That must be good because I imagine it can get pretty lonely at times running a business by yourself or not by yourself, you know what I mean? Like, it's just isolating in a bit.

Yeah, you're definitely alone. If you don't have a large office, you're kind of staring at a wall for eight hours a day or so.

Yeah, that's good. That's good. Cool. So what advice would you give other builders looking to run a profitable building company?

Well, based off my experience, I definitely highly recommend joining apb. There's a lot of things that I didn't know about. You know, you get trained as a carpenter, you don't really get trained to be or get trained as a builder. You don't really get trained to be a businessman. So you might be a really good builder, but it doesn't mean you're a good business businessman. So I definitely think they could be. Templates and tracking tools are definitely very good and as I said we would, we wouldn't be around if, if it wasn't for them. So yeah, I highly recommend. Recommend doing that.

Thanks for that little prop up. I did.

Recommend it. That's all good.

No, it's good to hear and it's great to hear that you've come on a journey and, and like you're coming out the other side as well, which is awesome. What is the next stage for Melaleuca Homes?

So the next stage for us is next year when I put another, another team, so another three guys we're looking to do. So at the moment we're doing two builds a year, so we want to be looking at doing four builds a year. So obviously that's part of what Jacob and I are talking about at the moment, how to move forward with that and making sure that it's not detrimental to the business either. And yeah, we, we are moving more towards just doing the custom builds. We were dabbling in just doing Renaults and what came along, but we are just strictly doing custom builds now, which has been quite a, quite a good experience for us.

Yeah, cool. And the new web, all the changes to the website are kind of going down that same path, are they?

Yeah, definitely, definitely. Just, Just a bit of a freshen up to. Yeah, just a bit of a freshen up.

Yeah.

Nice.

One question that a lot of builders are interested in hearing about is what software you use in your building company and what you like about it, what you don't like about it.

Yep. So we use Buildertrend and also PlantSwift. So plants with do all our takeoffs and build a trend. We did use next year for a little bit, but it just wasn't suiting what we wanted. So we changed over to BuilderTrend. I'd probably say things I love about BuilderTrend are the on site, the on site stuff that they can use so that the tracking and the scheduling and things like that and how the guys can talk to me through the app rather than sort of ringing and constant phone constantly going off. Yeah, probably the drawbacks of buildertrend. I find it a little bit hard because they don't. Everything's excluding GST and there's no GST part on the final price. You've got to add a line item in and it's just, it's not over. It's not fully customable, customizable. So when you want to upload sort of forms that you use during the build, you still got to sort of send them separately and then just upload them into. So. But they are, they are working on those sort of things. Yeah. And plan Swift and Builder and plug into each other quite well. So plan Swifts don't really have a problem with plantswift at all. Yeah.

Nice.

Yeah.

Awesome. Well, Liam, thanks so much for coming on the podcast today. You've provided a ton of interesting talking points for builders out there that are running a building company, looking to grow and run it profitably with all the challenges they're facing. Is there anything else you wanted to say before we wrap things up?

No, I think, I think that's.

Yeah. Awesome. Well, a big thank you for, for coming on the show today. Appreciate you coming on and giving up your time. I know you're busy. Also, a huge thanks to our listeners out there, wherever you are in the world. If you like the show today, please subscribe to Professional Builder Secrets on your platform of choice. And if you're feeling generous, leave us a review. But until next time, have a great day.