148. Hiring The Right Team With Josh Hostetler

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I tried to do a little bit of it myself, but I quickly realized that with all the tasks and responsibilities I had running the business, that that was not sustainable.

Welcome to Professional Builder's 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 Josh Hostetler. Josh is the president of Hostetler Family.

Homes in Hartville, Ohio. Welcome to the show, Josh.

Yeah, thanks for having me, Will. Happy to be here.

Yeah. Fantastic to have you on the show today. You're doing some really good work in terms of creating and communicating a vision with your team, and that's what I'd like to touch on a fair bit today and how you're using that in the hiring process. But before we dive into that, can you tell me a bit of a background about your company?

Yeah, absolutely. So we've been in business for 41 years now. We're a family owned company. So my grandpa, my dad actually started the company in 1983. I was born in 82. So the company's been alive almost as long as I have. And because of that, I've been involved in some form or fashion since I was a kid. I started off visiting job sites and climbing dirt piles with my dad when he was checking jobs, and then eventually worked into working full time with the company after I got my undergraduate degree at Ohio State. And yeah, so I actually had a bit of a winding path. I worked with the company for five years until the Great Recession that I'm sure everybody that's a podcast listener is familiar with, especially in the states. And at that time I was getting married and started to have kids, and I was a little concerned about the industry and whether it was a good fit for me and my family. So I decided to start step away for a while and I went back and got a master's in finance.

Okay.

So I worked for large publicly traded corporations for about seven or eight years there and I was a finance manager and finance director with them. I decided to come back to the company when My dad was thinking about retiring while I was working for the large corporations. He was just kind of keeping the doors open, doing maybe one, two, maybe three houses a year. Really a one man show at that point, just for a little bit of income for him. And I just felt like this was where I belong. So I decided to come back and take over. And he's since retired and I'm at the head of the ship now for about three years.

Wow, that's really interesting. Do you feel like that finance background's helped you reintegrate into the. Into the company and continue improving?

Yeah, it definitely did. Certainly the finance aspect, I have a good understanding of the accounting principles which, which helped out and financial management, so that helped out a lot. But also being involved in larger corporations and seeing the processes and procedures that they use and the level of professionalism that they try to achieve in their business is really something I'm trying to take into our little small business here carryover.

How's that transition been? It must be quite different, though.

Yeah, it is quite different. You know, when you're working in a bigger company, you have more focused tasks. I would say that I certainly have a lot more latitude with what I can do now, a lot more flexibility, but that also comes with a lot more responsibility and certainly more stress. So we're working through that and I'm working to build out a team so we can delegate responsibilities and everybody has a good work life balance. So I think we're well on our way to that.

Yeah, well, you told me just before we came on air that you just took a week's holiday with your family and went to the beach and stuff. So you must be in a good enough position to feel like you're comfortable to walk away for a week from the company and it keeps running.

Yeah, for sure. Yeah. I came back and I don't think any of my employees contacted me while I was on vacation at all. They kept the ship going in the right direction. I may have sent an email or two to them to make sure that things were going all right, but they did a great job keeping the business running, keeping customers happy, and I did not have a big pile of work when I came back.

Well, that's, that's nice. It's often hard to. Yeah, to take that time off, isn't it? So, speaking of keeping the ship going in the right direction, you've spoken to me a lot about the vision of Hostetler Family Homes. Can you just give me a bit of a background on how you develop that and what it is.

Yeah, the vision has, has been evolving over time, I would say, and I've taken multiple approaches to it. Some people have shorter vision statements, some people have three, four, five page documents of like a vision story. And as I've been in the business over time it has evolved. But I can certainly read you our most current vision statement and it is to be the most trusted custom home builder in our market. Through a professional yet personal approach, we create sanctuaries where families live, thrive, make memories and build legacies by fostering trust, transparency and lasting relationships. And we elevate the home building experience with every client. So that is our current vision. I do have a long form vision as well, but I won't bore you with the three to five page.

The five page document. No, that's okay. I mean, it sounds very succinct and you've obviously put a lot of effort into creating that vision. How did you come to creating it?

Yeah, I mean, it was really through experience in the business and understanding where we want to be and where we want to go, what the most important thing to focus on for us. And it's really building trust with clients being a company that they can rely on because I think that's short in the industry. For some companies, a lot of customers feel like they're taken advantage of by folks in the trades. And I really want to bring that professionalism and trust and really make a good overall experience for the customers. There's really nothing in that vision statement about how much money we're going to make or how big we're going to get or anything like that. I think those things are maybe a byproduct of focusing on the core and that's taking care of the customer, providing a great product and a great experience.

So in terms of like that vision, how do you effectively communicate it when you're hiring new people and onboarding them?

Sure, sure. We've recently hired on, gosh, five people in the last 14 months. So basically rebuilt my team from scratch. And it starts really in the job description. We put our company's values in the job description front and center. So people know what they're getting into and what the expectations are. So if they read that in a job description and they're not interested, that's fine, that's great. That weeds them out at that point. Then we do an interview process. Starts with phone interviews and in person interviews and we do situational interview questions and every question we ask them is based around one of our values. So we can really See if they're a good fit for our company and our culture. So that certainly helps out. And then in the onboarding process, day one, these are the first things that we review with our employees, vision, mission, values. So that's a little bit about how we incorporate it into our hiring process.

Yeah, that makes a lot of sense. So with those five people that you hired, what kind of slots were you trying to fill in the business and how did you determine what the right people to hire were?

Yeah, again it was based around our values. That certainly helped as a guidepost for the types of individuals we were looking for. As far as the positions, I have planned out, even looking a couple years in advance, where I think based on where we want to go with sales and production, the folks that we need, but specifically in the last 14 months, maybe a little bit more. I've hired a project manager, we have a sales associate, we have a full time bookkeeper, we have a plan designer. We're doing all of our custom plans in house now and we have a field assistant for our production manager.

So with the design side of things, used to outsource that or you didn't do the design portion at all?

Well, when I first came back to the business, I had had some experience in designing myself. I'd been playing with the CAD program for decade since my, I worked with my dad back in the early 2000s. So I tried to do a little bit of myself, but I, I quickly realized that with all the tasks and responsibilities I had running the business, that that was not sustainable. So then I, for a period of about a year, I did outsource that. I found somebody that was doing it remotely for us and meeting with our customers remotely over zoom and that, that worked well. But I really felt like bringing that position in house full time provided us with the opportunity to control the design more, collaborate with our project manager on how the design should look, what should be included on them, as well as focusing on the cost to build. So our plan designer is also our estimator. So she's getting to the point and she's only been with us for a month, so she's still onboarding, but she's, she's going to get to the point where she really understands cost and what drive costs. So when customers tell us they have a specific budget, which we always try to drill down on what is your budget, we can try to guide them towards design decisions that will keep them within the budget.

And what type of impact does that have on the customer experience? If it's all in house. Rather than having different people involved on.

The customer experience, it certainly speeds up the process since we have somebody that's full time working with them. And that's important because it keeps the customer engaged, it keeps them excited. There's more constant communication with the customers throughout the design process and that just speeds the whole thing along. You know, we are doing concept agreements where it's, it's a paid concept agreement. Customers come to us and we tell them it's X amount to, to get a set of concept plans. So at this point they really feel like they're getting some value for their money by getting a concept design. Three dimensional views. We can do three dimensional walkthroughs of home before it's built and then a budget range for them.

Okay, that makes sense. Going back to the hiring process from a practical perspective, like how did you find the people that you've hired? Did you post a job ad somewhere, work with an agency?

Yeah, it's, it's been a couple of different avenues actually. I, I have not worked specifically with an agency. I did use ZipRecruiter, a program here in the States to list all of the positions, but that's not how I filled them all. One was specifically a referral from a current employee, which worked out really well because they knew each other, they had worked together in the past, and we really knew what we were getting. So we knew that she would align with our company's values and our company's overall culture. Another one that I got was actually a recommendation from one of our subcontractors and that's, that's how we, we got our project manager, actually.

Yeah, referrals are a pretty good way to, to find value based alignment, isn't it?

Yeah, it, it does work very well, but you have to be willing to reach out a little bit, let people know you're hiring. Even if it's subcontractors, even if it's local professional organizations, your current employees, friends, you got to network a little bit. You got to, you got to kind of broadcast it to the world.

Yeah, absolutely. It kind of sounds like on face value, it's been a relatively smooth process for you hiring these five new team members. But what kind of challenges have you faced during that journey?

Well, there were certainly challenges before the journey because before I hired my current team, I had another team in place of three folks that. It took me some time to realize that they weren't the right cultural fit.

Right.

And I went through a process where we had to, I personally had to let them go, which is always a difficult situation. But it was something that I felt had to be done to build the type of business that I wanted to serve our customers well. So I really let go of the whole team. Started from scratch, but it's been great. I took a different approach to hiring. Before, I was hiring just based on where I wanted the company to be as far as size. Um, but there's a saying, hire slow and fire fast, and I've. I've really taken that to heart. Um, so I took my time finding these. These folks that are on my team now. In fact, one of them. I placed a job offer in the spring of this year, and she wasn't able to come on right away. And actually she. She turned it down when I placed the job offer because she felt bad she couldn't come on right away. I said, well, what if we. What if we extend the start date? And we extended it by a few months.

Yeah.

And just found a way to work with her. And she's here now and she's happy and everything's worked out well. But it's really about looking for some creative solutions to get the people that you think are right for your business.

Yeah, that must be hard, that delayed time, because I imagine when you're trying to get people in the right seats and grow a business and all those kind of things, you want some immediate, you know, slots filled. But, you know, waiting it out can be really impactful.

Yeah, absolutely. And we have a situation right now where our. One of our employees just went on maternity leave, which fantastic for her. She just had her first kid, but that's business. You know, you work around those hurdles, and we're going to give her as much time as she needs to welcome her new family, and we'll cover as long as we have to.

Slightly harder topic to talk about. How did you go through the firing process, if you want to call it that, or letting those. Those people go that weren't a good fit for the company.

Yeah, it wasn't all at once. It wasn't all at once. It was over a period of time. And I'm the type of person that. I'm kind of a people pleaser. I kind of get attached to people. And I had worked with these folks for a while, so it was. It was very difficult for me, but just over the process of. It was over a year, really, because I had to do it in the. In the right order to keep my business running without having any. Any major complications.

Yeah, it must be. It must Be. I mean, it's always challenging thing letting people go, especially if you've built those relationships with them.

So Josh, how did you hear about.

The association of Professional Builders and what was it that kind of made you want to join?

Yeah, you know, I'm trying to remember the first time I saw them. It was probably. It was probably through a Facebook ad, I believe. Just kind of popped up on my feed while I was doom scrolling and I thought, hey, this looks interesting. What is this? So I clicked through and I even asked a couple of folks locally if they knew anything about the association of Professional Builders. And some people have heard of it, but nobody was members. So that's how I heard about it. But after I dug in a little bit deeper and understood what all was included with the association of Professional Builders, it really felt like a way to me to bring in the processes that I feel are necessary to run a very well run company without going like the franchise model. Right. So we're a small family owned company. I want to hold on to that feeling of our business of being a small family run company. But I want to have those effective processes and targets and even marketing principles that help the business to succeed.

Have you ever thought about doing the franchise side of things before?

Not really. I mean, I have investigated it. There are a couple here in our region. But I just feel like for me, I want to keep more control over my business than what a franchise model allows.

Yeah, that makes a lot of sense. I mean, it's obviously attractive in some ways. It feels like you're getting a package of how to run a good business, but it doesn't always work that way.

Yeah, but I feel like the association of Professional Builders offers similar things. All the manuals you need, all the targets and practices that allow you to be successful without going that direction.

You mentioned that you spoke to a couple of other builders in your area around the association of Professional Builders just to find out about it. Is that something you do regularly? Do you have like a network of builders that you lean on in in the area?

I have a group that I'm involved in with the Building Industry Association. It is the local chapter of our national association of Homebuilders. We certainly talk regularly, but I wouldn't say that we're necessarily a group that's open to sharing business practices and things like that. It's more of a professional organization.

So what do you get out of it if you're not sharing business practices? Is it.

Well, certainly on the local level we have a lot of events where we do some education and training on a. On a regular basis. We do networking events. We also generally travel to the International Home Builder show together and we do some collaboration through that, whether it's on, you know, land developments or, or things. So it's. It's worthwhile. Definitely. I was the president of the organization last year and now I'm on the board of directors. So I. Well, okay.

Do you find you're seeking other people.

To talk about business practices with as well, though?

Locally, you mean?

Well, I guess just in general with other builders. Do you find that that's something that. That is beneficial?

Oh, absolutely. Yeah. We. I'm a member of the national association of Home Builders 20 Clubs program as well. Yeah. So if you're not familiar with that, we meet twice a year. They pair us with a group of similar builders from around the country in non competitive markets. And we do share best practices in those meetings. We share financials. So it's definitely a great way to grow.

Yeah, yeah, absolutely. That makes sense. So appreciate you sharing how you found the association of Professional Builders and what made you join in terms of just accessing all of the processes and systems that you could use to run an effective business. What's the biggest impact you'd say you've had that APB has had on your company?

Mm, it's probably two things. First would be giving me confidence in the targets that I'm aiming for, especially targets of gross margin. You know, what we need to make to be a profitable, safe and successful business. So certainly that target and also all of the marketing resources that APB provides and really encouraging the amount of money that I spend on marketing, which is substantial, but it has an impact. It helps to boost gross margins, which helps me to have free cash flow, to hire the right people, to get the right people in place to provide professional services to our customers. So, yeah, it's. It's really the. The targets and marketing, but also the accountability. You know, I'm in the elite mentoring program and I talk to Clint once a week and we go over our goals and any issues that I'm having in the business. Accountability is very big for me.

Interesting. So have you like deliberately increased your margins or is it just naturally happened from increasing your marketing and all that kind of stuff?

Well, I think now that we're spending an appropriate amount on marketing, we're certainly getting a lot more leads than we ever have. So, you know, before we were doing that, if somebody came in the door and said, hey, I want to build a house, you feel like you have to do whatever it takes to get that deal because you need the deal, because you don't have other options. Right. When you're spending enough on marketing, you have options. So you're not as likely to cut into your profit just to secure a deal.

That makes a lot of sense. What kind of marketing are you doing? What channels are you using?

We certainly do social media. We have a little bit of paid marketing on Facebook. We have an organic Facebook page. We do a couple of posts a week. Our primary source of tool for marketing is Google Ads. We do a lot of Google Ads, and our Google Ads direct people to our website, where we have a contact Us form that puts them into our CRM, which is HubSpot. And then we have email campaigns that we follow up with them. We also have a lead magnet that was based off of one of the APB's lead magnets that we kind of tweaked for our business and that pops up on our website. So if people want to see the six things you must know before designing and building a new home, they can go download that and then we can send them more information on a regular basis. We are doing some other things that I'm just testing the waters on. We. We sponsored a minor league baseball team in our area, which was kind of fun. So we got a big, big sign in their stadium. That hasn't been super productive for me, but it's. It was a fun thing to try. We've also done a little bit of radio advertising. Believe it or not. I just dipped my toes in to see how it worked. And it was. It was fairly successful.

So it's interesting, the minor league baseball example, I mean, it's very hard to determine an ROI from that. Right. But there's most likely going to be some sort of brand recognition in the local area.

Yeah, it's certainly brand recognition. And on our sign, which is probably 6 by 12. 6ft by 12ft, we put a QR code on there that directs people to our website. And I can tell specifically when somebody scans that QR code. So I know their source.

Right, so you haven't seen a lot of scans then, is that what you're saying?

No, no, not a lot.

Okay, good to know. What about the radio advertising? How do you determine the success of that?

Well, we always do discovery calls with customers when they fill out our contact Us forms on our website. And that's the first, first question, how'd you hear about us? Okay, so I advertise and have advertised on npr, National Public Radio. And they don't actually allow you to, to put on commercial advertising. You're basically sponsoring the programs that play. So you're a sponsor of NPR and people appreciate that because it's a bit more of an unbiased news channel.

So they kind of just announce you as a sponsor or is there a certain pitch that you give on, on the air or how does that work?

Yeah, I'll give them just a tagline. This, this program sponsored by Hostetler Family Homes, your premier custom home builder in northeastern Ohio or something like that. And then the website. Yeah.

Okay. That's a nice feel. Sounds very good. So it's great to hear that you're testing out different things. I mean, that's how marketing, you can figure out what's going to work for your company, right?

Yeah, yeah, absolutely. But I would say that our largest source is Google Ads right now. And in my local market we have a lot of custom builders that are a bit older, a bit more entrenched in their ways, and may not ever want to spend money on digital advertising. So that's, it's definitely a leg up for us.

Okay, so you see that as a competitive advantage because other builders aren't in the area, aren't doing it as much.

Absolutely, yeah.

Talk me through those weekly sessions you have with Clint, the executive coach that you're working with. What, what do they look like? What kind of things do you talk about? I mean, you don't need to go into the specifics, but I'm just interested to, to understand how that works.

Yeah, well, recently, over the last three, four months, it's been around hiring and onboarding certainly. I mean, he knows in pretty good detail what's going on in my business. He knows my new employees names, what tasks I want them to take on. So we talk about that weekly. We have a KPI workbook that has all of my targets in it and we will review that review. Sometimes we'll look over our, my WIPA calculation depending on the time of the month, or look at my dashboard. I'm keeping track of all my advertising spend in there and the leads it generates. But also pretty regularly we, we visit and, and I give updates on the quarterly goals that I set.

Okay. Yeah, nice. That sounds, sounds interesting. How do you go through that goal setting process? Is that aligned with the vision of the organization? How do you do that?

Yeah, it definitely does align with the vision of the organization. We have a longer session at the beginning of every quarter where we talk through where I hope to be in the next three months, 12 months even, look out a couple of years really. And then break it down into smaller chunks. What's it going to take to achieve these goals and what tactics can we put in place? What can we work on to work towards these goals? So it's a pretty iterative process, but it's certainly got, got structure around it.

And do you find that's helped to drive you in the right direction and get like, increase those margins, do all the things that you're trying to do in the, in the business?

Yeah, it definitely does. I mean, especially measuring on a weekly and monthly basis the financials that we produce, the leads that I bring in, it keeps, it, keeps it top of mind and it keeps you charging towards those goals. And sometimes you, sometimes you miss goals. That's all right. You know, then we just readjust for the next quarter and say, well, maybe that was a bit aggressive or maybe I had, you know, five too many goals and we need to pare back and really focus on one or two and really drill down.

So Josh, I'm interested to understand it's. You've been in business for a long time, that's been a part of the family as well, for a long time. How do you stay motivated and inspired to keep growing the business?

Yeah, it's, it's really about giving yourself the time to think big and you can do that in multiple ways. Right. I think for me, now that I have the right team in place, it gives me a little bit more latitude to spend that time where I'm not working on the day to day tasks, the things that are necessary to keep the business running day to day. So sometimes it's just working from home for a day or going to visit job sites and get out of your normal setting, talk to customers. Certainly looking over the quarterly goals in the KPI workbook and just refocusing on those bigger picture things, but also just like I did last week and I probably don't do it often enough, but get out of town, spend some time with your family and get away from the business and it really resets your entire mindset.

Yeah, yeah, yeah, it's great. It's a great reflection I think because it's so easy to get caught in the day to day grind, isn't it?

Oh yeah, absolutely.

Cool. So what's next for Hostetler Family Homes? What's the plan over the next six 12 months?

Longer?

Five years?

Yeah, yeah. Well, certainly now that we have the right folks in place on my team, we're, we're going to start to really refine roles and responsibilities. So I am going and revisiting everybody's job descriptions and reshuffling tasks a little bit just based on, on some movements and just continually refining our processes so we can provide a premium service for our customers. You know, we're putting in place new systems and with those new systems and processes, it really, I think, will put us in a place where we can have substantial growth. I don't have any short term aspirations of doubling or tripling my sales, but I think, I think once we get all of those processes and procedures in place and everybody knows what they're responsible for, we'll be kind of a lean machine that can, that could double in sales fairly quickly.

So what does that look like?

You just want to get all your systems and processes at a really refined level so that you can invest more into marketing and everything like that?

Yeah, absolutely. Yeah. It's, it's really about just spending the time and dividing the responsibilities over folks and making sure that your team members know exactly what they're responsible for. So, and that's, that's a process we're going through right now as we brought on a couple of new people. Right. Maybe our project manager was doing all of the estimating for us before he was requesting vendor quotes and things. Well, we're going to take that off his plate and we're going to give it to our designer and that, that's going to be more synergistic with her responsibilities of designing in a cost effective way for our customers. And then that gives my project manager more bandwidth, hopefully maybe to take on another project or two.

Yeah, that specialization makes a lot of sense.

Yeah.

Well, Josh, thanks so much for coming on the show today and sharing all those noise bites. I mean, there's some great tips in there on systemizing your business, increasing your margins by increasing your marketing spend, really narrowing down your vision and being able to communicate that with new team members hiring as well. So, so much great advice there. I appreciate you coming on and sharing it today.

Yeah, thanks for having me, Will. I appreciate it and appreciate everything the association of Professional Builders does. It's a, it's a great group to belong to.

Well, thanks, Josh. Is there any final advice you'd like to give to other builders out there?

Yeah. Take the time to step back and think big. Right. It's so easy to get ingrained in that day to day, like we said. But if you step out of the office for a couple hours and just go someplace to think, think about where you want your business to be in one, three, five years. I can almost guarantee that when you come back three hours later or four hours later, nothing's going to explode, you know, your business is going to be fine. You got to set aside that time to really plan for your future.

Yeah, that's great advice. Just take, take a moment. So I think we'll wrap it up there. Sounds good. Awesome. Well, thanks, Josh. And also a big thank you to our listeners wherever you are in the world.

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This episode of Professional Builder's Secrets is brought to you by Apparatus Contractor Services. Apparatus provides full scope, end to end QuickBooks, Precision Construction accounting and CFO services for residential builders. If you feel like you can't completely trust your weekly and monthly financial reports or you feel like you're flying blind, Apparatus Root will rebuild and operate your QuickBooks accounting system and give you precision construction accounting capability you can trust. Learn more@apparatusteam.com or on the APB Rewards Partner Directory.