165. The 2024 Recap With Russ Stephens and Sky Kolade

Welcome to another episode of Professional Builders Secrets. In this episode, I interview the co founders of appb, Russ Stephens and Sky Coniday. In today's episode we explore the biggest lessons from 2024. It was a year that challenged builders with rising inflation, volatile costs and limited leads. However, forward thinking builders use strategies like systemization and AI to not only survive but also thrive in a very challenging market. Keep listening to find out how you can apply these insights to your building company to improve in 2025 and beyond. 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@apparatus team.com or on the APB Rewards Partner Directory.

No matter what happens in the year, and this is so consistent report after report, if you weren't happy with the performance this year, the optimism that this community of builders still has for the next year, every year, so consistently was it something like 8, 81% of builders said in the this year's survey that they will sign more contracts next year. It doesn't seem to waver. It's always the we can do this. So I think the resilience of this construction industry is just off the charts compared to any other industries.

Welcome to Professional Builder 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 the co founders of apb, Sky Colliday and Russ Stephens. Sky, welcome to the show.

Hey Will, how are you doing?

Very good. Great to have you on, Russ. Welcome to the show as well.

Thanks Will. Great to be here.

Awesome. Well, Russ, do you want to kick us off? We're Looking back at 2024 in this episode and reflecting what a year it's been for builders. So what are some of those defining moments that you've reflected on from 2024?

Yeah, there's been a few, haven't there, Will? I think it's been defined by high inflation and high interest rates. Really? And high interest rates in the context of kind of where we've been for the last 10, 15 years. But they have really impacted demand throughout 2024 and we're starting to see that with builders where clients or opportunities are falling over as the death. And this is all As a result of these factors. Also, I think it's been defined by technology and systemization, especially with the rapid adoption of AI. I think we've all been amazed just how many ways AI has touched all our lives. But the rate at which builders are integrating and adopting AI into their businesses has been quite staggering as the years progressed. But I think what this year has also shown us is that financial literacy is just so, so important because you can kind of get away with it, can't you? Really not knowing your numbers. When the business is growing, cash flow is, is in a good place. It kind of masks up the problems and, and the gaps. But when things tighten up, that's when you really got to know your numbers. And, and that's what we've seen this year. The guys that didn't truly know their numbers, they've kind of been caught out as things have, have got tighter and really exposed them to a lot of pain.

Yeah, that reflection on technology is quite prevalent. Just before this interview, we were just talking about ChatGPT going down and our whole team reducing their productivity by 90%.

No one knows how to do anything anymore. Let's be honest.

We've just dated it, haven't we? We've earmarked exactly when we recorded it.

That's it.

This date will go down in history. The technology one is so true. If you think of even at the start of the year, how many of you listening to this episode right now, all of the software packages that you were using probably didn't have anywhere close to the features that they have right now. Because that race to adoption that every software package has put in this year, it's actually insane how many built in AI tools there are now in sort of regular everyday tools and software that builders are using.

Yeah, it's touching everyone, isn't it? Even if you're not going looking for it, you're being exposed to it and, and you probably are actually using AI, even if you're, you're not going out there and setting up a ChatGPT account.

Yeah, and that's what I mean, like in terms of like a defining moment for the industry. Like even if you're not sold on it, the industry actually is because it's getting embedded everywhere, which is really, it's very exciting, but actually really insane because if you think of how much in the entire landscape, not even just construction, there was a lot of apprehension from people, but in terms of where the money's flowing, software developers are jumping and then if you're already using the software well, you're sort of, you know, you're almost getting force fed it and you sort of have to adopt and then that's your new normal. So I think that really actually sped up everyone's adoption of AI and implementation of it, even without them knowing, which is crazy.

And it came out of the source report, the state of residential construction industry report, Russ, that 38.7% I believe I might need to check my numbers on that, but it was a close to 40% of builders are using AI in their building companies, which sounds like a lot, but to me that means that there's a lot of people that aren't using it yet as well.

Yeah, there's still a lot of opportunity and we've been running a lot of events this year actually showing builders the opportunity that lies ahead for them in terms of AI. I think if you're not immersed in it, you can maybe think it's a little bit one dimensional and not realize just how many different places that AI can help you in business. And that was the goal of these events as we traveled across Canada, the us, Australia and New Zealand. And it was quite surprising how many builders at those events hadn't actually started using ChatGPT or the equivalent and, and how many people had maybe dabbled a little bit. Now obviously there are a lot of guys who are in there using it every day. But yeah, like you say, this does present a massive, massive opportunity still for builders.

Nice segue. Speaking of events, sky and all the events we ran across those four countries in 2024, as well as our annual summit in Sydney which had 120 building companies attending, attending and our annual retreat in Fiji this year. What role have industry events played in helping builders this year?

I think the value aside of like whether there was teaching happening, whether it was a workshop, like whatever and even like greater industry events, right, there's, there's huge events like the International Builder show and whether it's breakfast or even social events in your own life where you're meeting up with other building company owners. Let's put the value aside of maybe what you're actually learning. I think just the ability to come together and collaborate, it eliminates that feeling of anyone being alone, which Russ has already pointed out and mentioned. This year wasn't particularly an easy year, wasn't the worst year on record, but it did get tougher. It was different right, to previous years. And I think the role of an event is actually bringing like minded professional builders, building company owners together to collaborate, to discuss, to share, to Actively communicate what's happening in their building company, what is working, what's not working, and even just feel that support from their peers in the industry, whether that is their competitor right down the road or it's someone on the other side of the country or the other side of the globe, that's what really matters. So I think they've been pivotal in actually keeping a lot of owners very focused on the direction of their building company and almost reinvigorated that they are on the right path. If, if they're working really hard, implementing a bunch of new systems, financial systems management, whatever, it can get quite gritty and you can sort of slow down the pace a little bit because you sort of think it's a lot of work. Is the juice worth, worth the squeeze? But I think it's kept everyone in a lot of alignment that yeah, you know what, it truly is worth it and you get to celebrate the wins together as well and really build that sense of community, celebrate those wins and really like we're in it together, which I suppose certainly APB wise, that's the whole point of what we're doing. We're trying to build a movement, transforming the whole industry and it requires everyone coming together.

And I think when you connect in person as well, it makes it so much easier to connect online afterwards. And that's what we see with our builders. We bring them together at these live events and they form friendships that continue online then within the members Facebook group for instance and whenever there are different online gatherings. Yeah, they've got that connection which you can only really build in person. And the other aspect is that in person meeting as well with potential service providers and suppliers who also come along to these industry events. So it's a great way I think for, for builders to, to just have a relaxed chat about a, you know, a potential service or a new supplier and get to know someone because you know, that's a large part of business, isn't it? It's the relationship. It's not just the NS and zeros.

I smile because I was going to say it's like that trust factor in a sense because we just literally talked about ChatGPT and AI and the robots, the machines, whatever, they're taking over. Sure. But to a large extent they really are and you're going to miss that human to human connection. If anyone's watched any episode of Black Mirror, you know what I'm talking about because you're going to go down this path and I think this is the path that a lot of People get quite nervous about, like, are we, are we B2C, B2B? No, we're human to human. I've heard that whole argument but before, but that's really true. Like, you want to be able to connect with another person. You want to utilize tools. Yeah. To make you more efficient and proficient and better. But you need that human, that person to person connection. Because at the end of the day, what's going on in between your ears really matters. And I think for well being, this is really important to have that connection.

Yeah. One thing I was reflecting on sky after your first comment around the builders being in an event and feeling like they're not alone essentially is it took me back to the APB summit in 2024. One builder actually came up to me and I asked, you know what, what's the biggest thing you took out of today? And they said it was really nice to hear other people having challenges that were the same as mine. And I wasn't feeling as alone after all of that, which was a big takeaway for me from that.

Yeah. Because you can get so wrapped up in your own world and you sort of, certainly depending on your personality type, you can get in your own head of like, why is it so hard for me? Clearly it's different for me, different for my building company, mine's uni or whatever story you end up telling yourself. You get out enough and you go to enough of these events with other owners like you, and you sort of realize everyone has staffing issues. So that becomes like a, so what? This is just part of business or whatever it might be, and you become very like, oh, like almost at ease. Like, this is the new normal and if someone else has solved that problem, let's just chat to them. How did you solve it? And then you can really just focus on the solution rather than the problem.

All right, now for some juicy numbers. Russ. So we've just wrapped up the 2024 state of residential Construction Industry Survey and have been crunching the numbers, preparing the 2025 report. There's so many valuable insights this year. We had 2,240 builders participate and there's 120 questions or give or take a couple in there. What were the big takeaways that you took from this?

Well, settle in for this one. Will the big takeaways. There was so much data, wasn't there? And I think really, I mean, first of all, when you kind of zoom out, we know at a certain level, we know what builders should be doing and we know what will actually help them. But what's so good about this data is it just backs up everything that we've been teaching builders and it helps builders to see how they're going to improve. I think what's really come out of it is it's really demonstrated the importance of systemization in terms of achieving profitability, but also resilience. I mean, that is going to become a very important word I think over the, the next couple of years. And when you drill down, it's, it's things like a documented sales process. The builders with a documented sales process, they're achieving a median gross markup of 25%, which still not quite where we'd like them to be. But that compares to 20% for the builders that don't have a documented sales process. That's such a, a simple thing to implement, but you know, you can see in the numbers the results you're going to get. You know, that's a 25 increase on your gross markup just by doing that one thing. And that one thing does translate to a higher net profit margin as well, because again, the guys with a sales process, they're achieving 8% net profit compared to 5% the guys that didn't. So, yeah, there's lots of data like that that underscores just the importance of following these processes. Project management was another one that really come out and we've seen that grow. This is something that's really been interesting when you look at the survey. Year on year, spreadsheets were number one in project management and estimating for some time. And it's great to see that being chipped away on year and seeing tools like BuilderTrend that really enable builders to take their businesses to the next level in terms of like management that is just growing in, in popularity. Other interesting ones, things like onboarding and HR practices as well. We can see in the data that the larger companies, especially the larger building companies, increasingly they're implementing structured processes for recruitment, for onboarding and also performance appraisals. And I think that really does demonstrate a clear commitment to creating a better organized, more efficient building companies. The smaller companies, it became quite apparent in the data that they're, they're still really lagging behind in terms of those kind of HR practices. But it's the, the bigger companies that are becoming more and more professional. Content marketing as well, and client communication, again, we saw in the numbers. It's been a bit of a repeating theme in terms of those two things, but the guys that use content marketing and CRM systems, they're always way, way ahead in terms of profitability. The numbers once again have really shown the importance of systems and processes. I think.

You know what floored me again though, and we talked about this in a meeting amongst our leadership team the other week. It was no matter what happens, I mean, you mentioned the word resilience just before. No matter what happens in the year. And this is so consistent report after report, even after this year's survey, no matter what's happened, whether you are happy with the performance or to be honest, if you weren't happy with the performance this year, the optimism that this community of builders still has for the next year, every year, so consistently, was it something like 81% of builders said in the, this year's survey that they will sign more contracts next year? Like that optimism in the industry, it just, it doesn't seem to waver. It's always the we, we can do this. So I think the resilience of this construction industry is just off the charts compared to any other industry. So I, I'd say a huge well done on the mindset of a lot of builders just for that alone.

Yeah, well, they're all entrepreneurs, aren't they, sir? Next year is always going to be better.

You know, what happened this year, you know what to do next year, you know.

Yeah. I think another thing that did come out in the numbers once again though as well, and it's probably good to look at the flip side of the coin and that is that financial literacy remains a critical weakness amongst the builders in the residential construction industry. The understanding of the work in progress calculation, there still is only 11.4% of builders that truly understand how to calculate work in progress. I think it was something like 50%. You might know better than me. Well off the top of your head, but I think something like 50% of builders thought they knew what it was, but then when we drilled down and tested them, you know, only 11.4, that means almost 90% of builders are not looking at accurate financial information every month. That's a really, really big concern as it has been, you know, in previous years as well.

It's just the ultimate warning sign, isn't it, of what's to come. Because if you don't know that you don't have correct financial data to go off of your decision, that you're only as good as your decisions and your decisions are only as good as the data you have to go off of. So it's just, it's the orange flag is waving.

You're absolutely right. Sky is an early warning, early warning system because without it, what do you look at? You look at the cash in the bank and that's a lag factor, especially for new construction, which is cash flow positive. And this I think is why, what, two and a half years ago we saw so many large building companies going under after this Covid boom where the costs exploded and they were on fixed price contracts, they were losing money. They shut the doors early because they were looking at the early warning signs, they were looking at the data. They knew that they were in such a deep hole they couldn't get out of it. But we didn't see many small builders going under at that point. And although part of that reason was because smaller building companies, a lot of these guys reacted very quickly and changed and adapted and didn't get into the same trouble as the big companies. But also there was a significant number of small building companies that just didn't know how much trouble they were in. So they continued forwards, really. They were in no better position, although a much smaller scale than those bigger companies that had closed their doors. But they continued until slowly they did run out of money over the next couple of years. And what we're seeing now with so many small building companies falling over, it's not the consequence of this year, it's a consequence of what happened two and a half years ago, which is now being borne out by the slowdown in sales this year.

The slightly positive view of the WIP calculation, Russ, is that the 2024 report, which was the data from the year prior, only 7.6% of the respondents actually knew what was going on. So at least there's been a of.

A good point because I mean, we could portray it another way, couldn't we? And say like 50% more build financially literate, it's fantastic. But you know, 11.4, we got to move that number, you know, harder and faster in 2025.

Hopefully that's a reflection on the APB training making its way through the industry.

I reckon so because Australians are leading the way from memory, aren't they? Yeah, we've been training Australians a bit longer.

I think there's a couple of factors there though. Australia is a lot heavier regulated, especially for the homeowners warranty insurance. So they're having to jump through way more hoops, to be honest, than any other country that we're surveying. It's very easy to get in the mindset of like, oh, why do we have to go through this? This sucks. And I know, I do get it that That's a process and their own issues over there. But I honestly, it's just all about perspective. You got to look at it as a huge opportunity because it's allowing a lot of Australian builders to think twice, think differently and actually truly understand their numbers and get their financials into a position position where they truly understand it in order to submit it. So if that's another one of those reasons as to why you've got to see it as a good thing, as difficult as, as it is, I'm sure.

Yeah, absolutely. I'll throw this to the floor. Whoever wants to jump in and answer this question first, talk to me about partnerships and how they've come a long way in the last year. For example, we've got 95 partners in APB's preferred partner network now and our members have received over $600,000 in cash rebates since we launched this program. There must be something happening in the industry which is leading builders to take up work with more partners. What do you think it is?

I think it's trust. I'll jump in here first and foremost, but I would say it's trust. Everyone is looking for help and using other service providers. So I don't think we change the game in. Other people are actually looking to outsource, but certainly in the way that we do it with our members, we talk about a whole system and a whole strategy of why you should, should, you know, delete some tasks you're doing, automate the rest and what you can't automate and you still have to do, start delegating it and you need to find a specialist. It's not about just who can do it cheaper, it's who can do it better than you could. Obviously we didn't necessarily invent any of that as an idea. That's just good business. So in order for us to really get the best results possible for our members, we needed to go, hey, if we're not going to provide done for you services in marketing or bookkeeping or, or insurance broking or whatever it might be, we need to start aligning with the best people in this industry who can and who will look after all of our members. And so when we took that whole approach, I think what the game changer has been is the trust factor. Our builders looking and learning from other people's success. And it's not just exterior, it's actually looking at other building companies that are well known, that they respect, they like and either reading their comments and reviews on who they've used and who they liked or hearing real direct truths. And this is kind of circling all the way back to a previous conversation we were having just today on the live events that we were talking about that we hosted. So our builders can not only collaborate and communicate with each other, but Russ, I think it was you that mentioned they get to collaborate and communicate with our partners who end up attending these events as well. So you get to really have that human to human connection and ask the questions, does it work? How does it work? Who have you worked with? Ask other builders, like, what have you done that worked? What have you done that didn't work? What did you like about this? What did you not like? I would say that's probably one of the biggest leaps that has been made this year. It's actually facilitating more of a connection, not just from our builders builder to builder, but it's from our builders builder to partner as well by setting up and hooking up these live events.

Yeah, I think when we started this preferred partner network, we thought it was all going to be about the cash. And I mean, that is significant. We've distributed over $600,000 cash reward payments to our members and they have not been disadvantaged in price in any way. So that money has gone straight to their bottom line. But yeah, like sky says, it turns out that the trust factor is even more important for our builders. And that's where the reviews is really, really helpful, where APB members are reviewing our partners. They talk about them as well in the private members only Facebook group, which means they can answer questions openly and honestly in a, you know, in a, in a comfortable, trusted space there. But what that really does is it shortcuts the research process. You know how difficult it is when you're looking to take on, you know, you're trying to find someone to build a website or you're considering taking on a marketing agency. It's a massive, massive leap of faith. But to go in the members group and just say like, hey, I'm just looking to get a quote on insurance or whatever it is and looking for a new accountant and to have other members jump in and say, this is the guy we use and their APB rewards partners so you get a cash back. That makes it a no brainer really for a lot of our members. Yeah, they, they know they can reach out, connect, and other members got their back.

Okay, moving on to this podcast. Now, this podcast has become a huge resource for builders. Actually. This year we surpassed 170,000 audio plays. And I was blown away when I saw this number 250,000 video views on social media. What are some of the key takeaways that you've taken from the podcast in 2024? Russ?

Looking back to the beginning of the year, we did an episode on strategic planning and preparation, getting ready for 2024, and really just talking about the importance of early and thorough strategic planning. And that's what we emphasized over and over again. And I think that was a really important one for builders. There was a great one as well with David Jennings about systemizing the building company that's so important for builders. And I know David Jennings is such a popular speaker as well. He's always been in. Yeah, was. We got some great feedback when he appeared at the 2024 summit. Another one that kind of springs to mind was one I did with sky and Andy. All three of us did that one together, which was cash flow versus profit. That's always a very interesting topic as well for builders. We always have to emphasize and remind ourselves that cash is not profit and profit is not cash there. They're two very, very, very different things. And. And the beauty of these podcasts is it just gives us the opportunity to go in depth on a particular topic. And especially when you think about that cash flow, profit, you know, you're getting insights from. From Andy and from sky and myself. So you're getting three different points of view as well.

And for any American builders that are heading to IBS, we're taking this live in 2025. 21 episodes over three days, which is crazy to think, think, but really excited to see some of the partners we've got coming on that podcast as well. So for any builders that are attending ibs, make sure you drop by and check it out.

It's gonna look very cool. Like, I'm gonna. Yeah, say that to everyone. It's gonna look very cool. Huge feature of our booth at IBS this year.

Yeah.

And so you're. You're gonna be recording half a year's worth of this podcast in one go, are you, Will? Is that the plan?

Yeah, that's true. Batch recording. Great result. Sky, talk to me about giving back in 2024. We've got an alignment with the One for One project, which is a charity that builds homes in underprivileged communities like Guatemala. How does that align with APB's mission and what are some of the milestones from this year?

Look huge when we set out. We've contributed to many charities over the years, however, as we've grown and obviously our company is not just Servicing builders. And obviously our team aren't just in Australia or New Zealand or just in Canada or just in the us it really is taking on the this global perspective. We realize that we need to really align charitable contributions, our giving, to something that's actually going to resonate for everybody. I'm actually trying to remember the year, I'm not sure whether it was last year, the year before. I don't know, maybe it was the year before that. But that's when we actually aligned with the One for One Project as our primary chosen charity. And like you mentioned, it's a charity that builds homes in underprivileged areas. And it was so aligned to what we do, you know, and I suppose more so what our clients do, what our members do, building homes. At the end of the day, members are out there building homes for families across all of those countries that I just mentioned. But if we look at what are we doing charitably, why don't we take exactly what our members are doing and do it in a community that is, is going to benefit so much more. Like we're already so privileged to live in these countries. Do you know what I mean? When we aligned with the One for One Project, it just, it made so much more sense. We're able to link all of our renewals to a charity contribution and a donation. So as we grow, our contribution can grow. And what's crazy is even via the One for One project, it only takes two and a half thousand US dollars to build a home, which is crazy. So if you actually look at our contributions for 2024, we've contributed over $90,000 to that cause. And that's obviously not just APB as a team. This is as our members have been renewing and growing. Like this is what's updating and sort of adding to our contribution. And I think that's just phenomenal. It means so much to not just our members, but it means a lot to our team as well. Incredibly proud about the partnership that we have managed to build between APB and the One for One Project. And even just so every member knows that their renewal and what they're getting out of APB in terms of value and content, that's just one side of it. They also know that there's a charitable aspect and it's actually really funny. I'm going to add this on Will because we've spoken about this in the past. We never used to talk about our charitable contributions. To be honest, it was probably more so me. I tried blocking it from Marketing because I thought it was quite tacky. I thought, like, why would you promote that? It sounds quite tacky. And it actually come from a couple conversations from some of our team members and even an anonymous bit of feedback within our team when we do, you know, like anonymous surveys, you know, what are you liking? Would you recommend it for even sitting down to a couple team members and having the conversation. They even mentioned that, look, they actively only choose other companies to buy from if they know that they have a charitable component. They have some kind of social responsibility, like that actually informs their decision making. And they mentioned that we talk about it internally and what we're doing, but we're not saying that to anyone else. And I just can't help but think that everyone can see us growing as a company, but they probably are just thinking, what are you doing about it? And so it was from that moment we were like, okay, maybe it's not tacky, maybe it is important. And we started sharing a hell of a lot more and even talked about it in our renewals that when we talk to members and the emails that go out. So I think that's been a huge, pivotal moment as well. So it's, it's really shared and people can be a part of it because it's not just apb, it's all of our members are actually contributing to that donation that we're making.

Yeah, I think it's important for APB to promote social responsibility and it does encourage builders as well to continue that. So they're already effectively donating by being a part of apb. But we've heard so many stories of builders wanting to do more and actually reaching out to the 141 project directly and making their. Their own contributions. Even builders going out to, to help with the construction, which has been incredible. But I think what this does is it really does enhance the industry's reputation as well, because, you know, we don't necessarily have the best reputation out there publicly. And I think things like this really do help that perception from the public as well of the construction industry. Right.

Thanks for sharing. Okay, so let's talk a little bit about APB's impact on the industry. I'm just getting the live number as we speak. 8,498 building companies coached over the 11 years that APB has been around. What has been the biggest value that APB has brought to the industry in 2024?

Sounds like such a loaded question. Like I have to pick one thing.

I would if I had to say one thing. I would say it's the financial literacy. Whenever we hear these stories, I mean, I guess the pathway that these, these a lot of builders that come to us follow is they, they come to us because they want more leads. More leads is more sales, more revenue, which means more profit. And we know unfortunately it doesn't work out like that. Typically a building company sub 10 million as they scale, they don't scour in the same proportion and this is why they end up in trouble. So we always start with their finances and when we actually show the builder where they sit financially, that then creates a mindset change. It's almost indignant. You know, I'm not signing another contract at those kind of margins ever again. They get a bit angry, creates this mindset shift. And then they do put their margins up to something sustainable. But now they're open, like how can I get them up further? And that opens them up to marketing processes and sales processes. But for me it all starts with that financial literacy. I think that really is the biggest value that we've been able to bring bring to builders.

Yeah, I definitely agree with that because ultimately that boil like the biggest value is the results they get from that. I think what I would just add to that and even just my perspective and opinion, I'd probably say if the question was what's the biggest, what do I think the biggest value APB has brought in? What was it, 2024? I'd probably just say the consistency in our message and I say this from a perspective that we don't piggyback and have never and do not piggyback on any trendy advice. We have been preach the same message and systems and financial management, financial literacy since inception. And I think that is, I would say one of the biggest values that we offer is there is so much consistency in the message that it's not about running from pillar to post, do this and reactive and whatever. This is the foolproof, proven, systematic way to run a professional building company which equals a profitable building company that you can grow safely and securely. And even when we talk about things like, like even at the start of this conversation we talked about just how much AI has changed and we brought an AI based event to all of these cities across Australia and North America and New Zealand as well. It still never bled down to trendy advice because that is what was changing in the industry. So while the tactics might be changing, I. E. You're utilizing tools and different software and platforms like AI, the strategy is remaining the same. So it's just about updating the message each and every year with how you're going to do it and the tactics, but the strategy and the principles always have remained the same to get those results.

And I think one thing that APB has always done well is it's walked the walk. Everything that we teach is what we've done ourselves. It's what we do ourselves. You know, absolutely everything. And I think builders see that when they, they start to come into our community and our network, they see what we're actually doing. And one of those things is we builders come to us because they want to grow. And I think we've been able to lead by example in that respect as well over the years. And 2024 was no different. Again, in terms of growth, we led by example because 2024 was the fourth consecutive year that APB has been acknowledged as one of Australia's fastest growing companies. So as a builder owning the building want to grow, you know that the place to learn or the people to learn from are the ones that are already doing the skill that you want to learn.

Just to add to that, one thing that APB does is provide structured training for builders. So in 2024 alone, we had, we obviously spoke about our events, which is live and in person training, but we had 20 free online training sessions with builders. We added 12 additional systems to our premiere premium video library for members. And there's, there's a ton more that I haven't mentioned. What does this structured training help builders do?

It's having a plan, it's having like a direction to go and actually having the confidence that, okay, they get to follow something that is proven, that it's not someone's theory, it's not someone's idea. But one builder who has just retired and now wants to give out advice, it's, it's proven, it's been rolled out in thousands of building companies like you've already mentioned will, and knowing that you're going to do, it's a formula, do X then Y, then Z and you will get a, B and C or whatever it ends up being. So I think that's a huge maybe weight lifted off of people's shoulders because you don't have to a, reinvent the wheel or even think twice of will it work because it's a, oh, it has been proven. So anything that we come out of the gates, either launching to teach or to showcase or whatever, you can believe that it has been proven and you can sort of put your mind at ease so you actually don't need to question it, you don't need to do your due diligence, something else has come out. You just need to implement it and make sure you're implementing it with the right ratios and then monitor the results and then have the conversation, how can I tweak it? How can I do better? I think that's been one of the biggest impacts that our training can have. Especially if you are a member and have been a member for years. It sort of puts your mind at ease. There's so much chatter, not even just in this industry. Let's talk about business in general. You're targeted with like a billion messages all the time on this is what you need to look for in your accounts. And here are actually the ratios you need to have and all these different things that don't really apply to construction. So it's, you know that it's specific to construction. You notice this, specific to a, a residential home builder, to a small custom home builder, not a project builder, so on and so forth. It's very tailored to the person in the room.

Room.

And I think the great thing about all these resources, and they are great resources and they touch all aspects of business. But you know, when a builder creates a plan by going through our business planning workshop, that's great because they've now got their three to five year plan, they've got their one year plan and they pretty much know what they now need to be working on the next 90 days. Well, all those tools and resources, that is what enables them to get started and executing. So you can't have one without the other. You know, you've got all the tools but you need the plan. And then you got the plan, you need the tools. So yeah, they, they really do support these business planning workshops that we run.

I couldn't let you go any further, Ross, without going back to Saucy for a second because you did want to mention a stat about training's influence on profit.

Training's influence on profit, yeah, it's, it's huge. I think one thing that jumped out to me on that report was we were asking builders if they have a mentor saw and, and the number was quite high. I can't remember exactly what it was off the top of my head, but the next question was, do you pay for mentorship or coaching? And what was interesting is everyone that actually had a coach or a mentor, they all outperformed the builders that, that didn't. But the ones that actually paid for it outperformed the ones that didn't. We didn't of Course, I would say that, wouldn't we? Because we don't want to just give away coaching and training for free. But I think it's really interesting because I think it does show that we value what we pay for and. Yeah, and we see this with all sorts of information. Yeah, you can give away like a ton of good information. Russell Brunson, who's a, like a very well known marketer, I remember him saying once he does a, like an annual conference and he would invite his friends along because, you know, he really wanted them to do well as well. You know, these tickets for $2,000 and he would, you know, bring them along for free and they would do nothing. They would get nothing out of it. Yet someone who begged, borrow and stole to, to actually be able to afford that ticket, you know, a year later, you know, they're, they're just on the way to the moon. And. Yeah, and he always highlighted it, you know, it's. You just can't give it away, you know, because people don't value it. And I think that really does show up in the numbers there as well. Well, but if you look at training in general, the builders that do invest in training, they achieve a net profit margin overall of 6%. And when you compare it to the builders who don't invest in training, they're at 1% net. I mean, that is a massive difference on those two groups. And it really does show the importance of training, learning new skills and how it can impact your margins. And sales training as well. That was another one. Builders that participate in sales training, median GROSS Markup of 27 and a half percent compared to 22% for those that don't embark on any sales training. So again, you know, training, it really just shows the effect it can have on your numbers there. Yeah, it's virtually all aspects of the report. I think this came out.

That net profit difference is crazy. Six to one one. Wow.

It is huge, isn't it? Because I imagine a lot of that is to do with knowing your numbers, you know, because you might be quite happy, like bobbing along at 1%, you know, if you don't realize it's only 1% and you, you think you're making more.

All right, let's pull out the crystal ball now. And sky, you can kick this question off looking toward 20, 25. What's one piece of advice you'd give to the builders listening today on preparing for the future?

I'd probably even go internally to start with, and that would be mindset, because I want to Pick back off of something I just mentioned a moment ago and it was if I talked about what value we delivered in 2024, it was the consistency of message. So the strategies and principles remained the same, but it's the tactics that change. So if, if you can do anything, when you're looking at what to do in 2025, I think you should just be prepared to think twice about pretty much everything you're doing. Because everything has changed with the explosion that AI has had in, not this industry, the world that's rattled and disrupted so many different industries and to be honest, professions and roles. That aside, knowing that everything has changed, you have to be willing to look at everything you've done in a different lens. And that includes things that work. Because we're going to get to this point where things that worked up until this point may not work next year, and things that got you to where you are today aren't going to get you to where you want to go. So I think even if you are an incredibly, incredibly successful position by the end of 2024, complacency could be the death of your building company. Because so much is changing. If you're bobbing along average or below average for 2024, everyone's in the same position here because the world, the industry, everything is changing. Be prepared to look at absolutely everything you're doing twice, zero based thinking, have a clear mind and ask the question, really challenge everything that you're doing to make sure you're doing it as efficiently as possible, as cost effectively as possible, and to be honest, as accurately as possible. Because new things are coming out all the time. And you could really transform your entire building company from good to great, from average to way above average, and that includes your entire team as well. I think you've got to be able to bring them on this journey with you, to question everything, challenge everything, look at everything with a new lens. Because what you can transform next year is going to be endless because there's so much opportunity with what's getting released least with what tools are developing internally and brand new tools externally as well. I think there's just a lot of opportunity. But you have to be willing to look up, open your eyes and look for it yourself.

Yeah, I'd say invest would be the one bit of advice I'd give builders. Forget about property and crypto and equities. Your business is the single biggest investment opportunity you've got. So invest in it, invest in AI, invest in the systems that are going to make it more streamlined. Invest in your team. We've seen how training can make teams more productive. Most of all, invest in yourself. You can't unlearn the stuff that you pick up. So make sure you invest in yourself. And if you invest in those three things, you'll be way ahead head of any of these people that you know are investing in other things because you've got a business.

Perfect. Well, great advice. I think that's a good opportunity to wrap things up. Sky, is there something you'd recommend people to do next after they listen to this episode?

Oh, look, I think with all of these stats that have just been dropping left, right and center, I think the natural progression is if, if anyone actually wants to see this, like physically as a download, right as a PDF, you can pre order the 2025 State of Residential Construction Industry Report and it has it very pretty, very beautifully laid out, all of these stats and you can compare country by country and you can compare your building company to all of the over 2,000 builders that actually answered questions in this survey. So I reckon let's just chuck a link to the pre order page so you can download this report yourself and as soon as it's ready, it'll hit your inbox.

Perfect. That'll drop in February 2025. Thanks very much, sky and Russ. Appreciate you coming on.

Cheers Will thank you, Will.

And also a big thank you to our listeners 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.