164. Preparing for 2025 With Andy Skarda

Welcome everyone to another episode of Professional Builder's Secrets.

In this interview, I interview APB's head coach, Andy Scarter. As the new year approaches, Andy shares why planning is absolutely critical for builders, and he offers a step by step approach to setting goals that will help.

You truly grow your building company.

We cover strategies for breaking down your big ambitions into manageable 90 day rocks, essential metrics you need to track and tasks you probably should stop doing in 2025. And he closes out the interview with a fun quip, so make sure you.

Stick around for the end.

This episode of Professional Builder 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.

This is the piece that for us as coaches is often so frustrating is that we see people that are working 80, 90, 100 hours a week and not moving the needle at all. As a business coaching company, our mission is to improve the construction industry globally for both sides of the equation. But our primary focus is builders. Obviously it's easy to talk about. We should be working smarter, not harder. What planning does for you is allows you to balance that work hard in the doing the right things so that you do make progress and you do move the needle. Foreign.

To another episode of 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 Andy Scarter. Andy, welcome to the show.

G', day, Will. Thank you for having me.

Always an absolute laugh having you on the show. For anyone that's not heard an Andy.

Episode before, you're in for a wild ride, no doubt.

Well, we'll try and make it practical as well. Just practical as well as interesting.

Always practical.

But there's also often a funny story or a unique anecdote in there which is always good.

Well, good. We'll see what we can develop.

So let's talk about planning. Andy, today we want to talk about 2025 and why planning for the new year should be a priority for builders.

Could you want to touch on that question?

Sure. Well, I think there's two things. One, I wouldn't be planning for 2025 to start with. I'd be Planning for and then seeing what 2025 does on our way to 2027. And secondly, when I was thinking earlier on today about this chat we were going to have, I realized that in the last decade, I've asked builders the question many, many times all over the world, would you consider building a home without a set of plans or blueprints? And every single time, the answer is exactly the same. The no, I would not start building without a fully detailed set of plans or blueprints. And yet, many builders are happy to run their business with absolutely no plan or blueprint. So, you know, really, in terms of why should we be doing this if we would do this for a client's home? Well, we should definitely be doing it to look after ourselves and our future. And that would be probably the primary reason to do it.

Why do you think that is, that builders don't have a plan in place?

Well, I think two reasons. One, it can be quite daunting. You know, you kind of think about it at, where do you start? You know, it's the old story of, if I knew where to start, I could probably get through it. And obviously that's why we're having this discussion, is to try and help them in that space. And secondly, builders live in such a world of volume. There are so many moving parts in a building business that it's often easy to fall into the trap of thinking, if I just do whatever comes across my desk every day, we'll be okay. And that obviously puts them into a reactive mindset and space. And obviously what we're trying to do in terms of getting them to plan is to get them into a proactive space where they are happening to their future instead of the other way around. So that's kind of the primary motivation behind it. You know, again, none of us would go on holiday without a plan. We wouldn't get in our car and chuck some clothes in the back and then get to the end of our driveway and go, where should I go? Now we know where we're going, and obviously as soon as we know where we're going, and this is probably the reason I'm raising this analogy, we can work out the route or route depending on which side of the equator you're on, to get us there. But to do that, we've got to know what the ultimate goal is, actually is. And that's really what we're trying to get people to do.

A holiday that might be a foreign concept to some builders out there.

Well, there we go. Well, maybe that should be the first thing they plan is when and where they're going on holiday.

Yeah, exactly. And I think that's. That probably feeds into. One of the reasons to plan is so that you can plan for those things. Right, Andy? But what are the risks? What happens if builders don't put the time into plan for 25, 26 and 27?

Like you mentioned, the biggest risk is that you're going to waste resources. We always talk about the fact that every single building business in the world has exactly the same resources, which is time, money and people. And the problem is, if you don't know what you're trying to achieve and you don't know how you're going to achieve it, you are probably not going to achieve it. And what does that mean? Well, that means you've spent another year of your life working your backside off without moving the needle forward. You know, and we've. We've spoken often on this podcast about burnout. And if you look at it in its simplest definition, burnout is arriving at that place where you are working yourself to the bone and there is no perceived progress as a result of that work. You're just spinning your wheels, and that's what causes people to burn out. So if we can get everybody to a place where we know where we're going and we know why we're going there, it puts you in a place where making decisions becomes really easy. Because if I know I'm going to Brisbane on holiday, when I get to the end of my driveway, I know which way to turn. I know if I turn the other way, it's going to hinder me getting there. Whereas if I turn the correct way to get to the correct freeway, it's going to speed up my process of getting there. And obviously that's going to mean I don't waste any time or resources along the way. There's a whole bunch of spinoffs attached to that. If, if we're not making the right decisions, if we don't have a plan in place, we may or may not have a company mission or values. And what we've now added into that mix is a scenario that not only do we not know where we're going, but the foundation of how we supposed to get there is missing. Because really what we're trying to do is to bring our team into alignment to get us to that end goal. So we really want to be in that place where we're not wasting money, we're not going to run into cash flow issues because we have planned our construction schedule for the year, because our schedule is planned, we know exactly what we need when, and we also know when we will get paid for completing that work, which means we can then ensure that we've always got enough cash to cover our overheads and obviously our materials and labor. We know what our profitability is going to be because we've planned it. We're not guessing, we're not hoping. We're actually giving ourselves a way of measuring whether or not we're on track. We will talk about this probably a little bit more, but one of the primary things that we want builders to do in their planning cycle is to run a brutally honest SWOT analysis. And if we know honestly where the weak points are in the business, we can consciously plan to overcome those or at least minimize the negative effect that they would have on the business. So, I mean, the. I could keep going for an hour on that, on just this alone. What, you know, if you don't plan, these are the things that you've got potentially waiting for you. If you do, you can literally avoid all of the landmines in the minefields and get to the other side safely and securely.

Yeah, it sounds like many of the. Many of the symptoms that some builders might be feeling at the moment, whether it's cash flow or where's my next job coming from? And these type of questions, it's almost like that's what's happened from a lack of planning over time.

Oh, absolutely. I mean, a lot of builders kind of do what's in the inbox every day, and that is. That's a recipe for disaster, which, you know, I'm sure we'll get into the more technical aspects of planning. And certainly one of those things is going to be that as the leader of your business, you want to make sure that you focusing on what's important, not on what's urgent. And if you're not planning, you're going to be in that reactive space. Because you're in the reactive space. Literally, the thing that screams for your attention the most is going to be the thing that you. You give your attention to.

I really liked your definition of burnout. I've not heard it framed in that way before. I've always associated burnout with just working too hard, but the way you described it was actually working too hard and not seeing an outcome or progress. I think that's a great reflection.

Yeah, that's. I mean, that is the problem, and this is the piece that for us as coaches is often so frustrating, is that we see people that are working 80, 90, 100 hours a week and not moving the needle at all, you know, and we obviously, as a business coaching company, our foundational desire, our mission is to improve the construction industry globally for both sides of the equation. But we, our primary focus is builders, obviously. And if we can make it better for them, well then their clients or their customers will benefit from that as well. But the number of people that we see come into, you know, our membership and coaching literally spent, you know, emotionally wrecked, very little money, and they have been working themselves to the bone, you know, and it's, it's easy to talk about. We should be working smarter, not harder. It's kind of what planning does for you, is, allows you to balance that. Yes, work hard. There's no question that working hard is a requirement of this industry, but work hard in the, doing the right things so that you, you do make progress and you do move the needle.

Yeah, I'm sure everyone's happy to do those extra hours if they actually see things going in the right direction and they progress towards where they actually want to go in the future.

Yeah.

Okay.

So you mentioned getting started and knowing where to get started is perhaps the biggest challenge that builders face when it comes to planning. So what are those very first steps you recommend they should do?

Well, I remember being at one of our annual retreats, in fact, I think the first one we ever ran. And we had one of our very successful builders on that retreat with us. And in the first session of the retreat I ran an exercise to help them define their why. Why are you doing this? I'll never forget he came to me in the, in the tea break and he'd been running his business for probably a decade at that point in time. And he said to me, nobody's ever asked me that question before and I've never, ever considered it. And you know, this is, at the end of the day, every builder should be running the business he is for an outcome that positively affects his and his family's future. I mean, that's the simplest way to kind of put a definition on where we're going, what that looks like. Exactly. For every builder is going to be different. But if we can define even that long term goal and we can take it further than this, but I've tended over the years to bring what we call the bhag, which is the big hairy, audacious goal, bring that back to a ten year horizon. So ten years from now, what do you want this business to have provided for you and your family and then if you can lay down that picture so that we've kind of defined what success will look like in 10 years. Then we dial it back to, we always talk about a minimum of a three year goal. So in other words, on the way to that 10 years, where do we want to be in three years time? And then really the critical piece that you are focusing on in today's session is therefore, if we're going to be there in 10 and there in three, where do we need to be in one and obviously that one in most cases for a builder looking at what he wants his business to produce, it's going to come back to a certain amount of money, which is margin, profit and lifestyle, which is time. So essentially what we've got to be looking at is if we know in 10 years time how much money you want in the bank and how many hours you want to be working in the business every week, we can then come back to that and go, okay, to be there in 10, this is where we need to be in three, this is where we need to Be in one. And then we can start to fashion the plan that's going to get us to that one year goal on our way to our three year goal. So it's kind of defining that, that deeper horizon first and then once we've got that horizon sorted, then we want to come back. And part of the reason that we go to a three year kind of staging point is that within three years, if we are focused on what is important and not what's on urgent, we should be getting to a place where from there onwards it is a process of rinse and repeat. We should have by that stage employed the right people, implemented the right systems to the point that we can define quite clearly what success will look like in three years time. And then that allows us to dial that back to the one year to define what success looks like in a year. And part of the reason why I'm saying we need to define it is that if we don't know what success is to us personally, we actually won't know that we've achieved it. I've seen a number of clients come into coaching, for example, where they are so driven and when you start to unpack what they're actually looking for, they've pretty much achieved it, but they didn't realize it because they weren't able to kind of see the wood because of the trees, you know, so it's, it's making sure that people are very, very clear and focused on what it is they want in that long term, you know, first steps. We spoke about the SWOT analysis. I used the words brutally honest deliberately because a lot of the things that we talk about in this space, it's very easy to give them lip service. What I mean, it's very easy to. It's a good idea, so let's do it. But we don't, we don't really mean what we're doing and therefore it doesn't bring with it the desired results. So it's literally sitting down. And strangely enough, I find with most of the clients that I coach, they can generally define their weaknesses pretty easily and quickly. They have a far harder time defining their strengths because they don't perceive them. They live with them every day, you know, so it's kind of being honest about those things. And the reason that you want those two in balance is that often the solution to your weakness is sitting in your strength. And you want to be able to leverage that relationship to obviously get you to the place you want to be. And then the final piece in this puzzle is really making sure that your values and your mission, the company mission generally, are clear and defined and specific in terms of we don't want things like values to be aspirational only, you know, something's not a value unless you can actually take an example of that having been lived out. Okay, You've got to be able to grab. You've got to be able to say, for example, we never take things personally. If that's your core value, then you've got to be able to say, I received what could have been a very, very scathing email from X, but the person I got it from, I know was focused on process, not on me, and therefore I was able to engage with it correctly relative to solving the problem with the process without becoming a victim and getting triggered. It's literally being able to, if you can start the new year with those values in place, that mission in place, 10 years clearly defined, three years clearly defined, your next year is going to be a whole lot more pleasant and certainly a whole lot more productive because of that.

What I'm hearing is there's often a gap between what's written down and the tangibility of that. Whether it comes to your values, your bhag, your vision, if that's just a fanciful thing that nothing, it doesn't actually hold people account to, or you don't really want it, then you're not going to get there. So is there a formula to actually defining. Let's start with the bhag for example, to make sure it is something you really want to work towards and it's tangible and clear.

Well, I think the, the important word in that sentence, in that question is want. Okay, because there's a bunch of things you could do, but how many of them do you want to do? And maybe even more important, excuse the pun, how many will you do?

Here we go.

The wild ride begins.

No, and I mean, if you look at it, there are a bunch of things relative to any problem that are optional ways of solving that problem. You've got to get to the place where you can honestly look at the plan you've come up with and say, I will do that. Not, I want to do that, I will do that. Because we always talk about the fact that information does not bring about transformation, only action does. So my default analogy here is we all know that we should exercise more. We know that. But the world, certainly the first world, has an obesity problem. So knowing that we should exercise more does nothing to reduce the obesity problem. Until you buy a pair of running shoes, you put on a pair of shorts and a singlet, and you go for a run or a walk. It doesn't have to be 100k walk the first time, just go for a. Just walk around the block. But you've got to actually get out there and do it. Otherwise, knowing it does absolutely nothing for you. When we come down to. If you're going to define your B hag, if you're going to talk about your mission, don't come up with something that sounds good. Come up with something that is real. And that's why I use the word authentic. Because if it is authentic, every part of it will be provable, as in we are doing it now. That doesn't mean that we should never have aspirational values. We could well see one of our weaknesses being an area that it's a cultural thing that we need to work on. Great, fantastic. But we mustn't pretend in the, in the context of what we're talking about now, we mustn't pretend that it is already resolved when it's not. We as the leaders of the company have to be honest about. We're good in these things, we bad in those things. That's where we need to put our focus, to get those right. And if we can be honest with ourselves, from that will flow the tactical planning that is needed to get that thing resolved. So absolutely, it needs to be authentic. It cannot be lip service, otherwise it's a waste of time.

All right, well, let's dive into the details then, Andy, you've got your vision, your values, your bhag that the future light that you're working towards. How do you then break that down into a more strategic plan?

Well, you're going to want to look at those three resources that we spoke about earlier. You've got time, you've got money, you've got people. Those are the levers you can pull in order to bring about whatever it is that you've planned for yourself. So again, I always start at the, at the capacity side of the question. Because even your bhag, which by the nature of its, if you think about it, big, hairy, audacious goal, that's not have an empty inbox every Friday afternoon, that's not big or hairy or audacious. Well, some, sometimes in the year it can feel audacious, but it really isn't. You want it to be something that when you think about achieving that there's a little butterfly in your tummy, there's a little bit of. I don't know if I can pull that off, but that's gotta be what that is because that's the piece that's going to drive you. I always talk about what's the thing that gets you out of bed on a cold winter's morning? Okay, that's the intrinsic motivation that you need. If we can then get to the point where we look at our capacity, every single thing we're going to deliver is going to be driven by our ability to execute one of the disciplines in our business. We take it back to its fundamentals. How many houses of that value can we build in a 12 month period? If everything is working the way it's supposed to now, if that isn't enough to deliver the revenue that we need, then it becomes pretty obvious we've got to be able to build more so that we can invoice more, so that we can earn more. And now we can ask ourselves where, what can we do to be able to build more? Is it, do we need more people, do our current people need more training? Or is it a bit of column A and a bit of column B to drive up our capacity? But then of course, all that capacity in the construction discipline is useless unless we can sell enough contracts to fill that capacity. That means we need capacity in our sales discipline for designing those homes and costing those homes. So now we're back to do we have the people who can execute enough design and enough costing to enable us to quote, enough do proposals, enough land, enough contracts to fill that capacity. And then of course we go back another step which gets into your area of comfort. Do we have enough leads, do we have enough people coming into those conversations in order to be able to sign the contracts and then build the home? So it's comes back to capacity. And in this space we want to be optimistically realistic. There's no point if the most houses we've ever built in a year was five. It'll help you to sit down and decide, okay, next year I'm going to build 50. Because you won't, you can't. It's not physically possible. You will not get there in 12 months. So what is possible? Could we go from five to seven? Yeah. Should we make it eight? Just to push? Okay. Our goal for next year is eight houses. Well, if I know it's eight houses, I need to sign eight contracts. I'm going to sign eight contracts. Oh, and I also want some work for the following year. So why don't I sign 10 contracts? Well, that means I need 20 prelims. If I'm going to do 20 prelims, I need 20 sets of drawings and 20 estimates. Done. Does my design and costing team have the capacity to do that many? If not, I need more people to employ more people. I need more money, which means I need more margin, which means my marketing needs to improve to bring me a better caliber of person. What's happening is as we are pulling one lever, it's a bit of whack, a mole. But essentially, if you look at that discussion I've just played with, it starts with marketing. If I don't have the leads, I'm not going to sign the contracts. If I don't sign the contracts, my capacity is irrelevant. So where would I be starting in that picture? I'd be making sure my marketing was spot on. Because without that, none of the rest of it becomes, you know, even a worthwhile conversation. I always get people to take that picture and then overlay it on just to be different. Not a 90 day picture, but an 83 day picture. And the reason for that is that we always want to build in a little bit of wiggle room in any, any quarter, which is not really 90 days, it's actually 94 odd days or whatever it is. But I always take that one month that's got five weeks in it and chuck off the last. So we're actually working in three months of four weeks and we're working in 10 months of the year. So again, we've got to get the time right. We can't say I've got 12 months. Because we don't have. If you take holidays and Easter and shutdown and those kind of things, we pretty much can build even weather in some parts of the world, we can build pretty much from February to November and that's it. So all of a sudden, if we've got 10 months, not 12, and we then take each quarter and go, how does that overlay? We've got two full quarters in the middle, but a short quarter to start and a short quarter to end. Now what we must do is know that so that we don't put a full quarter's worth of work into a quarter that only has two months in it. Because if we do that, we're not going to achieve what we're aiming for. We're going to get discouraged and then we're going to say, oh, this planning stuff doesn't work. Where in fact, the problem wasn't the plan. The problem was it was unrealistic to start with. So it's really practical. It's really kind of a. If I can break everything I need to do into the 10 months that I've got and then really what we're saying is, then prioritize. Like I said to you, we do want to build more houses, but we can't build more houses till we have more leads. So the first piece of that chain is get more leads. And it doesn't help you to focus on building capacity in the first 90 days because that's not going to solve your problem. Now you're going to have all this capacity and nothing to put in it. So that's where the sequencing becomes critically important. It's not just knowing what to do, but making sure that you're doing it in the right order so that you get the best return for your investment of time and money.

Yeah, I love the practicality of how you've broken it down. It's kind of like you're looking ahead 10 years, but then you're almost going top and tailing it. That's the top end. And the tail is marketing right now. And how you can generate more leads to level your way up to the amount of revenue and profit and everything that you need to reach that 10 year goal as well. And just makes it sound more achievable. I mean, in the scenario you gave, I can't remember exactly what it was. What was eight, eight homes or something or. No, 10 homes. 10 homes. I mean, that's a thousand leads, right? A thousand qualified leads or thereabouts. That you need to generate. And when you think about it that way, you're like, that's achievable.

Absolutely. If you look at it, we've spoken a couple of times about priorities. There's an incredible author named Steven R. Covey who wrote a book called the 7 Habits of Highly Effective People. And he has this wonderful analogy in there where he talks about, most of us when we plan a, how are we going to utilize time? If we pretended that was a jar and we were going to fill the jar up with sand, pebbles, and rocks, with rocks being the most important thing, that would move the needle. What most of us do is we first put in the sand, then we layer the pebbles on top of that, and then when we try and put the rocks in, there's no room, the jar is full. So what happens? We're very busy. We are answering email like an absolute king. All right, We've got reports coming out of our ears, all being done on time, but the business is still failing. And the reason for that is, if we go with the example we're talking about, we were very, very focused on building capacity where we should have been focused on generating leads. What he comes up with is this beautiful process where he says to you, take everything out of the jar, Put the rocks in first, put in the things that are going to move the needle and make your building business progress. When those are in place, then put the pebbles in and then pour the sand in. And the funny thing is, everything will fit in that job because the sand will simply find its way into the gaps. And at the end of the day, what you'll end up with is the ability to do what's important because you put that in first. Now, that's a great analogy, but how do we turn that into a practical outcome? You've got to make the decision. I am going to focus on doing what's important, not what's urgent. And again, easy to sit here in a podcast and say, that's what you should do. I don't want to should all over anybody. I want to make sure that we give them some practical help. Start off with one hour a week. Take one hour out of your week and focus on what's important that might be doing. Completing an APB action plan on the marketing blueprint for builders. Then next week in your hour, think about what you learned and think about how you could implement that in your business. Then the next week, in that one hour, start to work on what you are able to do immediately. And then try and go to two hours a week and then go to three hours a week. And essentially what's going to happen is as you move from a urgent driver to an important driver, you're going to find, first of all, that a lot of the things that were making a lot of noise to grab your attention were actually completely unimportant and not urgent. But what's going to happen is, as you start to make progress in the areas where you need to make progress, the entire business is going to improve, and you're going to find you actually get through a lot more than what you were getting through in a fraction of the time.

I think what I'm hearing, which is super important, is you're saying focus on what's important, but if you don't know what's important, then it's hard to focus on it.

Well, largely that's what will come out of your planning exercise. If your planning exercise is honest and real, it will become very evident what is important. I mean, we've taken a very simple example, and you commented on the fact that we went from build capacity to lead generation. But we couldn't have done that if we didn't start at build capacity and work our way backwards. But authentically, realistically. And as you said, could we generate a thousand leads in a year? Maybe not. Maybe we don't believe we can. All right, let's try then. How about a hundred a month? Could we do that? Yeah, we could probably do that. Oh, really? 100amonth for 10 months? How many is that? That's a thousand. That's the way it'll come together.

While we're talking about that, I just want to play devil's advocate for a moment. It's all very well to get a thousand leads, a hundred leads a month. Go talk to a marketing agency. They'll probably tell you they can do that for you really easily. You obviously need money to spend to be able to generate those leads. And then if you get those leads and you don't have a sales process in place, or not a good one, then you might not convert those leads into contracts. And then even if you do, you don't have your margins in place, you don't get the money to spend on marketing, and it seems like a cycle. So you're saying start with marketing, but it feels like it all ties in together.

Well, maybe I should finish that sentence. Start with marketing. And I said you had three resources. People, money, time. Start with marketing, using the time, the money, and the people that you have at your disposal now. And we might not be able to go from five contracts to 10 in one year. We might only go from five to seven. But if we do those at the right margin, that will accelerate our ability then to get to 10. So no, you're absolutely right. That's why I said it must be practical, authentic, and it must be optimistically realistic. If we only have a marketing budget that's going to generate 300 leads, we know that. Well, we must still use that money to generate those 300 leads. Your comment about if we don't have a sales process in place. Absolutely true. But what do we know is going to happen? No marketing is going to generate 300 leads in the first week. So if we work on getting that machine built and then fire it up while it is going through its process of generating those leads, we then can be building the sales process so that as those leads come in, we've now got a way to of converting those into paid clients. But you know, again, we back to if you don't plan, you won't do anything with marketing, and if you don't do anything with marketing, nothing will change. And then a year later, you'll be sitting there frustrated and burnt out again, saying, gee, I wish that I knew how to get out of this. And really, the answer is plan.

Yeah. I mean, there are a lot of builders that still rely on referrals to get leads, which is a very inconsistent approach.

Oh, absolutely. And unscalable. We always talk about the enigma of referrals. And the enigma really is the fact that a referral is a solid gold lead. Okay. That somebody else for whom you have already proved your worth has done the work for you to make that person come into the conversation ready to trust you. It's yours to lose. So we want as many of those as we can get. Now, you spoke earlier about what if I don't have the budget for marketing? Okay. Spend some time developing your referral system because you could easily have five or six contracts sitting in the network of the people that you've previously built for that could generate the work you need to give you the money to start the marketing. But the reality is, again, we're back to you cannot scale a building business on referrals because they are so inconsistent. There is no way of predicting when they will be around. And it's always feast or famine. You've got a month where your phone rings off the hook, and then you've got six months of tumbleweed and crickets, and you can't scale a business on that level of Inconsistency.

Yeah. I mean you can't even work towards those long term goals because you're like you said, okay talking about measures and you've mentioned a whole bunch of them, you know, homes built in a year, contract signed prelims, you know, leads, all these different metrics. What are those key metrics that builders should be looking at for 20, 25 and beyond to become a part of their long term plan?

Well again, I mean remember where we started, we started with a BHAG. If we've got a clear BHAG that we know what the outcome is in 10 years, then we know what we need to be delivering across that 10 year period. So we start with capacity again. We start with how much capacity do I need in my business in order to generate that. I've got a wonderful client in, in Brisbane, Australia that I work with whose strategic plan has been simplified back down to. He wants to do consistently $10 million worth of revenue every year at 10% net profit. So every decision we make, every discussion we have has a clear focus. We can ask ourselves about everything he's facing. Does this help us get to 10 contracts a year in any part of the business? More marketing, sales, construction, financial management, hr. It's the same question, does this decision get us closer or move us further away? And if it's moving us further away, we don't do it. But that comes from the clarity of knowing that's what, what my BHAG is. So capacity is, is absolutely a, a huge one. We, we want to then be able to make sure that the things within the business that we need to measure to see whether we're making progress are also in place. So things like revenue margin, both gross and net, watching our fixed expenses to revenue ratio to try and bring that down into that 15% or below, making sure that our WIPA is being calculated every single month so that we're not trading insolvently. We have enough money to be able to cover our expenses at any point in time. Those fundamentals now need to be used to deliver the outcome that you've come up with in your plan. Okay. In other words you not going to get to the net profit goal if you're not able to generate the gross profit goal. And you can't get to the quantum of net profit until you can generate enough revenue. So once again we back to capacity and our need to grow it is, will be what drives the metrics that you measuring in order to make sure you progressing.

Yeah, perfect. That sounds, makes a lot of Sense. And I think even just breaking it down into those key metrics and having a clear idea of what that North Star is and what that would look like year on year between now and that 10 year mark, that process alone is going to be really eye opening, I think.

Oh, absolutely. And I mean, it's. If you think about it, it's why we offer every one of our members a business planning workshop, which we ask them to do at least once a year, because it's often difficult on your own to be fully objective. So what a coach does in that picture is gets you to check that what you are coming up with is first of all realistic. Is it even achievable? Yes, it is. Is it optimistic? Is it stretching us a bit? Yes, it is. Tick, tick. Now let's work out how to do it. You know, you spoke earlier about the fact that if you break it down into practical steps, if you look at both the action plan on the subject in our membership portal and what we do in those business planning workshops, it is literally that process. We define what that end goal looks like and then we build the vehicle to get us there. That's essentially what is. And it's, it's boringly practical. It literally comes back to how many people of what kind, driving what kind of vehicles, using what kind of laptops, in what kind of office, at what kind of desk, on what kind of chair, next to what kind of water cooler do I need to deliver that outcome? And then what we do is we add up what that's going to cost and we look at the ratio between gross profit and net profit, which is essentially our operating capital, to make that happen. And as long as those line up, we can now say, right, this is, this is executable, now go and do it. And of course, that's another whole discussion.

Yeah, well, I think you've tied it up nicely. Obviously, the quarterly strategic planning action plan you mentioned there and the business plan planning workshop.

As a bit of a bonus question, though, I want to just provide some.

Extra value for builders that are listening today.

What are some actions you would tell.

Them they should stop doing in 2025?

I think those would fall into two categories, assuming. Dangerous word, but assuming that you have planned what you want the end of 25 to look like. Stop doing everything. I'm going to repeat that. Stop doing. Doing everything. That will get in the way of you achieving that outcome. All right, so there's the broad answer. Let's narrow it down a bit. I know there are some things that I hate Doing, and I suck at doing them. I know what they are because I'm an old bugger. Work out what those are for you, because what you're going to find is those things waiting for you in your week are sucking the energy and the creativity out of you. And here's the even weirder reality. There are people in this world who love doing the things that you hate doing. And they probably will cost you a lot less per hour to hire that other person to do that than what it's taking you to do it. And most importantly, if what that does is that frees you up to work in your genius, to work in the space where you are really, really good, you will more than cover the expense of associated with hiring that extra person. But think about what we've just come back to. We've come back to money and people like, identify those things that are holding you back. Identify the things that are stopping you getting to that place, and get those things out of your life one way or the other. I don't know whether you actually asked this, but what happened as soon as you asked me the question was, I went to. We actually have on our action on the form we use for our planning, we have a block called the Stop Doing list to literally write down those things that we should stop doing. And then part of what we would come up with in our rocks is they still have to be done. So if we're not going to do them, who is? And then that translates into either move them to somebody that you already have or employ somebody to actually take those things off your plate.

Well, Andy, you've provided a ton of practical advice today on planning for 2025 and beyond. Time Money people or Time Money resources. You've referred back to on a few times in terms of the levers that builders can pull.

But I did promise a wild ride.

And I don't feel like you've delivered 100% on that. So have you got any fun stories.

You want to share to wrap it up?

Well, I was thinking this weekend about the word lisp.

Okay.

And wondering why we called that particular impediment something that those people can't say. That's. That's. The weird stuff that goes on in my head is like. Like, literally, why didn't we call it? I mean, if you think about, I. I guess stutter falls into the same bucket. Actually be very hard for somebody with a stutter to say the word. But. Yeah. Well, what you brought me today was an eminently practical subject where there's not A lot of. Of opportunity for that insanity. But thank you for giving me the opportunity to get it out there into the universe.

Yeah, very good. And I think that's a great example of just thinking differently on an everyday topic.

Right.

And maybe that's what builders need to start doing with their planning and the way they run their business.

Absolutely. I mean, you think about one of the fundamentals we teach at the APB is differentiate yourself from your competition. The reality is, very few builders do what we've spent 45 minutes and 57 seconds talking about.

About.

They don't plan, which means as soon as you do, you put yourself in a completely different space to your competitors, and that's always going to work to your advantage. The mere fact that you can sit down with a client and say to them, if we can get your contract signed by that date, I can start your home on that date. Very few of your competitors can do that. That's planning. You can't come up with those two dates unless you have the process mapped out in terms of where you're going. So it has real practical benefit in terms of being able to do those kind of things and making you different to your competitors.

Awesome. Well, Andy, thanks so much for coming.

On the show today.

I've had a lot of fun, and there's been a lot of advice in there for builders.

Good. Thank you. Always good to be here.

Perfect.

Well, also, a big thank you to.

Our listeners wherever you are in the world.

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