200. Systems, Culture, And Growth With Trevor Anderson

Welcome to another episode of Professional Builder Secrets. In this episode, I interviewed Trevor Anderson from Collaborative Construction in Canada. Trevor's journey into residential building is anything but traditional. With a background in finance, business and data intelligence, you'll hear how Trevor took a fresh approach to running a construction company. From building a strong culture with values at the core to managing his company remotely from another city. How he structured his business in a way that puts people first. Keep listening to discover how Trevor has redefined what a professional building company can look like and the lessons he's learned along the way. 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 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.

We need to stay true to what we hold as our true core values as a company. By having those in place, it allowed us to make that really, really difficult decision to let them go. After the fact that we made that decision, we thought we were going to have some pushback from some of our employees, especially some of our longer term employees. So it reinforced that we were making the right decisions and at the same time, it also showed that we were building a culture around our core values that made it a place that people wanted to work for and they knew what to expect from us. You guys have a book that you came out with, Professional Builder Secrets. We have multiple copies now in our office. While I've read it three times, we made it mandatory reading for our management team and we essentially built our sales blueprint following the steps in that book. And so we were getting lots of value from you guys. Already you had a show special on which was an accelerator program. It was a six week accelerator, which it was phenomenal. It was like a six week course. When we finished the six weeks, we were like, wow, our company has progressed so much.

Welcome to Professional Builder Secrets, the podcast for building company owners wanting to grow grow safely and securely. I'm your host, Will Blunt and today I'm joined by Trevor Anderson from Collaborative Construction. Trevor, welcome to the show.

Thanks for having me, Will. I'm glad to be here.

Very excited to have you on. We first met at the International Builders show earlier this year in Las Vegas and you had an immediate impact on me. Your energy, your enthusiasm for trying to improve your company. And I'm really happy that we've got you on the show today.

Completely agree. And I, yeah, I feel like you are a big, big reason we joined apb. So the feeling's mutual.

Very good. Well, I'm excited to hear more about your company today. Obviously we've had a few conversations in the lead up to this, but do you want to give a bit of a background for all the listeners about what collaborative construction is, how you got to where you are today?

Sure, yeah. So Collaborative Construction is a residential and commercial general contracting company in Regina, Saskatchewan, Canada. So right in the middle of Canada, and we specialize in major renovations and additions.

Your background isn't building like the traditional builder. It's not like you came through as a carpenter, all that kind of stuff. It's a bit different.

Yeah, absolutely. I definitely don't have the traditional construction background. I, yeah, I don't know how far back to go, but I grew up on a farm, which kind of got me working with my hands a little bit, but didn't really have renovation experience or even get into construction side of things until probably university. So in university I studied finance, again, not the traditional path. And that's actually where my business partner, Derek Wu, he's the CEO of our company and he was in marketing. And we actually had a shared love of rental properties or the goal of getting into rental properties. I just bought my first place, it was a duplex or side by side property with the goal of renovating the one side and renting out the other side kind of living in the one. And that's kind of how I dipped my feet into renovations is Derek and I got into buying rental properties and renovating them and refinancing and repeating the old brrr method. I don't know if you're familiar with that or not, but that's how we got our start in it and it kind of just progressed from there. We had friends who were in similar situations. You know, they recent graduates of university looking at buying their first homes and they would literally come to us and be like, hey, I'm looking at some homes with my realtor. Would you tag along and just let us know if you know, there's anything that jumps out that we should be aware of or, you know, give us some costs on what you think things will cost to do renovation wise. And then it progressed into, well, could we just pay you to do the work for us? And that's really how collaborative construction started for us. You Know, from my background perspective, when we started into the construction side for other people, I was working for the government at the time. I was in finance. I started in finance there and I ended up moving over to the IT side in business analytics, business intelligence. So basically doing data measurements for different areas within a power utility company. So different measurements within that. But that really gave me a fundamental background on data and measurement of data and KPIs, and I kind of fell in love with it. And when we started up our business, our construction side, that was a fundamental part of it was making sure that it was data driven. You know, the numbers don't lie. Have good KPIs, and we can truly monitor our growth and see if we're successful that way.

That's awesome. I must admit it sounds a little dry working in finance for the government.

Yeah, it was definitely dry. You know, full disclosure, I love that stuff. Like, finance is a passion of mine. Personal finance. I read a lot of books on personal finance. That's kind of, you know, how I unwind is learning more about that side of things. So, yeah, definitely a little weird that way. But it's given us a great backbone, I think, for our company.

It's very different to running your own company though, right? Working for the government, it's almost like the polar opposite. So how'd you find that transition?

You're exactly right. The complete opposite. So the budgets, very much so are, you know, what you don't spend, you lose. So every year you're hoping to spend more and more and more and increase your budget, budget, budget, which I would say is the opposite in business. Not that your budget doesn't grow, but you're always looking for ways to cut your budget and try to be as efficient as possible. And ideally, you're not utilizing your whole budget, you're finding ways to save. So very much so different that way. Also, full disclosure, full honesty. One of the reasons I was starting to become unhappy in my government job was that it felt like, you know, I was trying to initiate change and a lot of people didn't want to change. They were like, oh, I'm happy with my job. If I make these changes, it means I have to do more work in my job, so I don't want to have to do those. So it often felt like trying to push rope along to somebody like, hey, I have all this data. We can give you more insights. You can see where your, you know, the bottlenecks are in your processes and they didn't want it, which was shocking to me. And so very much so. Felt like it was the right time to get out of there and focus on our own business.

Yeah, that's the great thing about running your own company. Right. If you're into the data and you do the analysis and all that kind of stuff and you find opportunities to make change, you can just put them in place. You don't have to wait for anyone else.

Yeah, exactly. That's exactly it.

So what did you do when you first started the building company with all of that background on data analysis and understanding around KPIs and things like that, how did you start it? Like, what did you put in place that, that you took from that previous.

Experience, like right off the bat? We started with a scorecard. Like KPI scorecard wasn't anything like groundbreaking, you know, looking at a revenue, looking at our gross profits, our net profits, you know, that type of thing. Yeah, like I said, it's just very high level. Like it wasn't, we didn't, you know, go super in depth. Now we have a much more robust KPI dashboard where we even look at it from like the residential versus commercial side of things and have a lot more, yeah, front end data like on the marketing and sales funnel and all that type of stuff. But at the beginning it was very much so, just making sure that we're profitable in every job we did. And the goal was to have, you know, that old adage, that 10% profit. That's what we were aiming for, you know, off the bat. Back then the adage was 10% overhead, 10% profit, which knowing now that's impossible. You can't, I mean businesses can't have a 10% or I'd like to see the residential company, residential construction company, that only has a 10% overhead. But yeah, I think was a good starting point.

Speaking of overhead, you don't work in the city that your building company operates. Right. So I guess that's a portion of overhead which is not attributed to the company because you're not sitting in an office in the same city. Right. But tell me more about that. You're working remotely, but running a company in a different city.

It didn't happen overnight, but it has transitioned over the last probably four or five years. You know, it started with taking a longer vacation time. I would kind of leave for five or six weeks every year. And actually that dates back to even when I worked for the government. I had lots of vacation time. So I'd usually use it all in one go and go away somewhere for five or six weeks. But I was also running a construction company back then. So at the same time, when I was gone for five or six weeks, I also have to figure out to make sure that, you know, estimates were still going out, invoices were still being paid, all that fun stuff. You know, I think it's been very much so a, you know, trying to design a lifestyle design. So trying to figure out how I can buy back my freedom by, you know, delegating and elevating, figuring out ways to have other people do it, whether it's people we already have on staff internally or do we have to hire new roles. But it's. Yeah, it's very much so progressed over time. So currently I live about three and a half hours away from Regina on a farm on an acreage, as you can see in the background. I don't know if you can see.

That background for anyone watching on YouTube.

Exactly. That's my real background. This is my office is actually what I work out of every day. It's a gazebo. I just have a triple monitor set up outside and have a bunch of meetings throughout the day, checking in, making sure everything's advancing as it should with an amazing management team. As I mentioned, I have an awesome business partner and so we've been able to, yeah, like I said, basically create processes that allow myself to not be here. The other thing I should mention is where we live in Regina, Saskatchewan, it is basically minus 40 for six months of the year. Not quite, but really close. It's disgusting in the winter. So I also like to get out of there in the winter. So I usually go somewhere warm for six months of the year and then six months of the year. The summers are beautiful and so we do spend that back in Canada.

That's cool. Where do you usually take that six months warm?

It depends. Every year it's a little different. So this coming year we're going to go back to Mexico again. It'll be our third winter in Mexico. This time we're going to the PV area, Puerto Vallarta area. But yeah, we're, we're looking forward to it. But don't know wish away summer either because summers are beautiful here.

You have to come to Australia for that six month, one time.

I would love that. We have a small dog that travels with us as well. And unfortunately Australia has very difficult rules to get them in. But I would love that. I actually spent, When I was 19 years old, I spent just sort of 10 months in Australia living there and I absolutely loved it, fell in love with it. Love it. I really want to go back. My wife's never been so I keep talking about it and it's definitely on our plans to get back there.

Yeah. Cool. Talk to me more about the remote working. What does a day look like? How are you running meetings? What tools are you using to make.

That possible from a tools perspective? I guess if I back up a little bit. So not even just remotely, but our company itself. We use buildertrend. That's our main software system that we utilize. We have for four or five years now. We've been with them quite a while and we can talk about this in a second. But that's actually how we found APB was through the sourcei report, which I'm sure we'll talk about. But I found them through buildertrend, our found APV through Builder Trend. But we use buildertrend for all of our reporting, running our projects. Basically the operations side of things. From a financial perspective, we use QuickBooks Online. So builder trend integrate. Integrates with QuickBooks Online. So that's our financial reporting. From a management perspective, we use Trello. I don't know if you're familiar with Trello at all, but it's a. It's kind of like a management. I don't even know what you'd call it like basically as cards and you can like create like you can assign cards to different people and track them.

Yeah, I'd call it project management probably.

Yeah, it's like a project management tool. Good call.

Yeah, naturally.

Use that. Yeah, it's great. We love it. We've been using that for quite a few years too. We use that more on our. For our management team assigning things. We keep our project managers. We want everything in build a trend so that, you know, there's only one version of the truth and everything's in there. But we definitely use that for tracking our issues, our rocks, that type of thing. And then Google, we use Google for a lot of stuff. So Google Meets. We have the paid version of that. So we're able to do meetings as long as we want. It takes notes for us. We can record them if we need to. We use Google Drive. We have shared drives in there that we can utilize everything that way. We built a hub. What should we call it? It's like a. It's an intranet, so like a local to us and that's where we actually feed a lot of our SOPs and you know, forms and documents that our staff uses regularly. They can go into the hub. It's just our. Yeah, It's a URL that they go to and so they can access it anywhere as long as they have the Internet connection, it makes it easy for them to utilize things. That's pretty much it. Oh, OpenPhone. We use a software called OpenPhone which basically is a telephone tool. So it's our primary number. When you call in, it actually goes through Open Phone so it records every single phone conversation. Same thing. It'll like use AI to summarize the calls. It'll also forward to multiple people. So right now my business partner Derek, he's our main salesperson, first phone call goes to him, but if he doesn't answer, it'll actually come through to me as well. So I can answer it. And so yeah, we have lots of options that way as well.

So I guess from a lot of that's internal communication, but from a customer point of view, using Open Phone, Google Meet sometimes I imagine to have those customer facing conversations. Plus buildertrend as well.

Yeah, exactly. So buildertrend, we heavily utilize buildertrend especially things like their daily logs and their updates, their weekly updates that you can put in. But daily logs is a big one for us. We. I don't know if we can talk more about this in a bit too if you want, but it's actually something we bonus our construction staff off of. Like specifically the guys that are on the tools, they're bonused based on if they're regularly putting in daily logs. Because we want that transparency to our customers and our clients to be able to see every single day what's progressing on my project. Even if you're not on site, what are the things that you're working on in the background. And then we also do a weekly update for them as well. Buildertrend has come up with this nice easy way of doing that. Now it basically uses AI to take all of your daily logs and your schedules and things like that and summarizes them all and you can update them if you want. But we also do a weekly summary for all of our clients as well.

Yeah, when we had our pre interview chat you spoke a lot about one of the biggest strengths of your company was the team and the culture that you developed. Can you tell me more about that? You obviously just mentioned that the remuneration systems tied to something to do with build a trend as well. I'd love to hear more about that as well.

Sure, yeah. If we go back to the very beginning when we started a company, we didn't have nearly as robust of a bonus system or anything like that it was at the very beginning we only bonused our team off of our overall company. So basically how well we did for revenue and profit of a company is how we bonused our team. Since then, we've made it much more robust, which I'll talk about in a second. But you know, touching on the culture side of things that you mentioned there, you know, both Derek and I left what I would call like corporate jobs to start our construction company. And so when we did that, we wanted to create a job that we actually enjoyed going to every day. And so we wanted to work with people that we enjoyed working with. They shared our same values. At the time, we didn't have values established for the company, but you know, they had the same. What we felt were our values, you know, they shared similar ideas as us. People that we wanted to work with, people that we felt would look good and be, you know, that would be okay with having in front of clients and not be worried about what they're going to say to them or anything like that. And that's really how we hired people with the idea that, well, I don't have a background in construction, Derek doesn't have a background in construction. We learned it. We can teach somebody else construction, but. But those people skills are very hard to teach. Those are the things that take a lot more time and you know, we hire for those and we'll train them to learn construction. As we progressed, we actually did sit down and come up with our core values. And I think honestly that was a huge game changer for us. It's not that we didn't already necessarily have these values in place, but now that we actually words behind the values and we're able to identify, okay, these are our four core values. And now that's the lens that we can make every single business decision from. It's honestly been a game changer for us. So it helps us to make those hard decisions. And I can give you an example of one that was a really tough decision we had to make. We had a longtime employee who had been with us. He's actually one of our first employees. He started right from the ground level all the way up now into our management team. He was my right hand person, basically reported directly to me. I utilized them a lot. We found that there was an issue with one of our core values that they weren't meeting or we had found an issue where they weren't meeting that core value and we had to make the decision to let them go. After being with us for almost 10 years. And honestly, if we didn't have core values, I think that would have been, honestly, we probably would have let it slide because we had nothing we could point to that said, like, hey, we need to, you know, stay true to what we hold as our true core values as a company. And by, by having those in place, it allowed us to make that really, really difficult decision to let them go. Not that this matters, but timing wise, it was literally the day before I was crossing is while we were on our winter trip. It was the day before I was supposed to leave. I was already out of our province. I was in Vancouver, Canada. It's right on the coast of the west coast of Canada, about to head down into the States for six months. And so it was very stressful time. But it, it helped make that decision more easily. And after the fact that we made that decision, we thought we were going to have some pushback from some of our employees, especially some our longer term employees. And some of them were actually friends with this per, like had been friends with these, this person for much longer, for like 20 years. You know, even outside they'd gone to high school together and stuff like that. I don't know if I mentioned Regina is a very small community. There's only about 260,000 people that live in Regina. So you pretty much know everybody by about one or two degrees of separation. They had some close friends. We thought it was going to be a difficult pushback on it, but we actually had the opposite. We had one gentleman that we were specifically worried about. He actually said the opposite. He said, had you guys not made that decision, it actually butted up against his core values and he probably would have left had we not made that decision, even though he was really good friends with that person. So, you know, it reinforced that we were making the right decisions. And at the same time, it also showed that we were building a culture around our core values that made it a place that people wanted to work for and they knew what to expect from us. So that was huge. And then getting into that compensation piece that I was talking about before, we also aligned our compensation around the pieces that either we're struggling with as a business or that really drive that return on investment, that roi. You know, our two biggest roles in our company are kind of our construction workers and then our project managers. And so from our, like, do you want me to get right into the depths of this? I can talk more about like specifically what we measure on them or I can just talk high level.

But before we do, I Actually want to just loop back to the values discussion. Let's close that out first because I think they're both great conversations, but practically like from a values conversation, what was the. Obviously like that came at a bad time having to let that person go and you were unsure on how the team would handle it, all that kind of stuff. And you're about to go on holiday. What was the aftermath of that? Like, did it all end up working out? Like, was it a, was it a better outcome?

Yeah, absolutely, actually was a better outcome. The first few, I'd say weeks were very stressful and involved, but yeah, it actually worked out really, really well. They, that person had been what I would consider almost a linchpin in our company as far as like everything invoicing related funneled through them. But what ended up happening is our team had such a reliance on that person that they didn't know it themselves. And so it actually gave us an opportunity to push things down a level. It allowed our project managers to have a much more in depth view of their finances and to really drive into their budget and to look at it. Because prior to that they would basically sit with this person and at the end of a project and kind of reconcile everything and it's like, okay, well we'll find out at the end of the project what our true numbers are. Like. We kind of knew throughout but it wasn't until we're completed the project that we would know what our true numbers were when they reconciled everything. So we were able to shift that to an ongoing reconciling, pushed it down to the project manager. So they actually are in charge of their own budgets on their projects for making sure that their input. And we'll talk about this in a second when we talk about the bonuses because that's part of their bonuses and we made some changes to the bonuses so that that reflects that it actually has helped us a ton. They now know their numbers way better. They know where they're at in their projects. It's allowed us to get a better handle on our gross profit. Starting to raise our gross profit in our projects early on because we can make changes early on. We can identify things right from the estimate to be like, oh well, we were low here right off the bat on this line item, you know, so now I know I have to work uphill to get back to a better gross profit margin. But yeah, it's given us way more insight. It's taken a lot of reliance off one person and we never even filled that role. So we've made the decision to not even fill that role. So on top of that, we've actually also freed up the payroll to utilize that in other ways, like bonusing our guys better or you know, we've hired some VAs to do some of the data entry, you know, the, the non crucial data entry pieces and that type of stuff.

Yeah, it's interesting. It kind of unlocks a new opportunity, doesn't it? When you think it's the worst thing that could happen at any one time and all of a sudden it actually improves your company with the values. I'm interested, like, did you just utilize them when it came to the point of oh, this is not aligned with our values so we need to actually take action here. Or how are you discussing the values with your team? Like how present are they on a day to day basis? Are you using them during reviews and performance reviews and things like that as well?

Absolutely. So we do what's called and it's a weird name, I can't even tell you where, why we use this name. But we call GSRS Goal setting reviews. So we do them every two weeks with our staff. And so they sit with their direct manager and they go through kind of what we were talking about, like their KPI numbers, the things that they can directly influence. If it's like a construction person, it's talking about like what are the areas they want to get better in, what do they want to learn about. On the project management side, it's a lot more of a deep dive into each one of their projects and to talk about where they're at in each one, where they're running issues. But we always start those meetings, both of them with going through each one of our core values and we ask them to give us an example of where they either had what we could like call exemplary, you know, like awesome core values, where they were showing that they exemplified those core values, or maybe the opposite, where they wish they had shown or made decisions through those core values better. And so the idea there is that we always want them thinking about it and talking about it and they know that's a question coming up. So they have to come prepared and actually sit and think about each one of the core values and where they are either meeting it or exceeding it, or on the other side where they could maybe have done something better. And it's like a learning experience for them.

That's really interesting, a self assessment of the core values because I mean historically it's a way to provide feedback to people. Right? Like if they don't live the values. Or if they do live the values, it's a great way to provide positive reinforcement as well. The self assessment's an interesting one. I've not thought of it through that lens before.

Yeah, I mean, it doesn't end up. I shouldn't say. Like, it does bring up conversation that important and like, you know, we can drive decisions and stuff, but ultimately it's kind of like a way to break the ice to get them starting to talk before we dive into some of maybe the harder or deeper questions. But then it also makes them reflect on the core values and really think about, okay, how do my actions align with my core values?

No, I love it because it's like, it's always top of mind. Then it's like, yeah, exactly. You're basically holding them account to the values that you want the company to be run by.

Yeah, yeah. And then we also. Not that this is. I mean, lots of them do this, you know, the live laugh, love. But we have that on our wall and very big. In our big meeting room, we have our four core values so that every time somebody's in the meeting room meeting, they can see them up on our board and big. And so, yeah, it's like I said before, we. It's maybe our most important thing. We. We make all our decisions through those lenses.

Do you ever write yourself on the core values?

That's a good one. You know, No, I haven't done that. I haven't done a 360 review on that. But that's. That's really good. That's a. Something that I'm. I'm going to start doing, I think.

Cool. Yeah. All right, talk to me about. Let's move on to the compensation. I know you wanted to dive into that as well, and I shut you down.

No, no, no, that's good.

It's a real. You've got a unique compensation model. So let's dive into the detail on that and how you feel like that's motivating your team.

Kind of how, as mentioned before, we try to set up our bonus metrics, ways that we've identified that maybe we're not meeting the mark or we need to focus more on that. I know you guys have said this lots and I'm sure you've heard it a million times, but it's like what gets measured gets monitored. And so we, I guess from our. Well, for both of them, I shouldn't say for all of them. For all of our roles, we have kind of two sets of bonuses. We have annual bonuses and quarterly bonuses. And for both of them we have what's like, good, better, best. So kind of three tiers that they fall into. So on the annual bonuses, it's based on basically two things. It's our revenue targets for the year and our net profit for the year. So basically did we meet our revenue bonuses and did we meet our overall net profit bonus at the end of the year? And we bonus our team on those. And then there's a combination bonus. So if we meet both of them, then there's a bigger combo bonus because we met both the revenue and profit percentage. And then from a individual perspective, that's what they're measured on quarterly and same thing, good, better, best. The idea being that if they're just meeting what the expectations are, then to me that's not even good, that's just like what's expected. Then there's like, okay, you're going a little bit above and beyond. That's the good. There's the better, which is like, wow, you're really, really crushing it. And then the best is, I would say, almost perfect. Like it's usually you're getting 100% on these things. So for our construction staff, it's things like their time entries. So the accuracy on the time entries, the nice thing about Builder Trend is it actually even geo punches when they're in and out. So it's. They have to be at the location they're saying they're punching in and out of. It's using the right cost codes. They're not missing any entries or doing them after the fact. So that's what they get measured on there, their daily logs. So again, buildertrend allows you to input daily logs. And I think I was talking about this before, but basically every single activity that they work on, they have to have a daily log for it. So even if you're doing multiple things in a house during that day, you might have multiple daily logs. Basically every time you're switching a cost code, you're putting a different daily log in. So if you're framing and doing trim work, you're going to have two daily logs that day, even for that same property. And so same thing, it's measured like, what's your accuracy on that? 90, 95% or 100% and then five star reviews. So specifically Google, five star reviews, how many we got in that quarter. The idea being there that we want them to be, you know, their client facing, we want them to give the best possible experience to our clients. And so that shows by getting five star reviews. And then the last one's a safety based one. So it's essentially, you know, did they have any safety infractions? We want to make sure that they're wearing all the appropriate PPE when they're working on the tools that they're not. Yeah, they're just basically being safe. And so that one to me is like almost a freebie, but it should be because we want you to work safe. On the project management side, it's a lot more project specific. So same thing, still good, better, best. But from an individual perspective it's like, what's our capacity? So how much jobs or how much, how much completed revenue did they get done in that quarter? It's their gross profit percentage. So what was their gross profit percentage on those completed projects? Then again they have a combo bonus for those two. So it's like if you met the revenue targets and the gross profit percentage, then you get an extra combo bonus. Good, better, best on all three five star reviews again, but this time specifically for their projects. So they're trying to get a five star review for their projects. And then the last one is what we call a project performance percentage and it's basically a weighted average of a whole bunch of data points. So things like, are there schedules up to date? Are there to dos in buildertrend up to date? You know, are they invoicing on time? Are the, you know, are we collecting that money? So the accounts receivable side of things, I'm sure there's more to it too, but it all works out into like a weighted average percentage. And then we bonus them on that as well. And then the other.

I love this. I feel like it's like you're like basically identifying all the levers that are contributing to the overarching goal of the organization, say net profit revenue, which also is what you're anchoring the yearly bonuses to. And like all of you basically essentially saying, if we influence all of these levers, it will contribute to that and everyone's happy, everyone's motivated.

That's exactly it. So they kind of get built on top of each other. It starts at the individual level, goes up. Yeah, just all the way up to. If everybody's meeting their targets, then we're going to meet our annual targets because we're all meeting the numbers we need to meet. And that is how we figure them out too. We actually work backwards and they align with our annual targets. So it's like, okay, this year we want to do $6.5 million so what does that look like if we work backwards? What does each project manager need to do work wise in a quarter in order to finish out the year that you're at? 6.5 million or more. And that's how we figure out our bonus structure for that year. The one thing is, that's changing. So one of the things we're going to be changing for next quarter is, at least for the project managers, is we had that gross profit percentage. The problem there is that if we're not estimating it correctly coming out of the gates. So if our salesperson or salespeople don't set them up for success, then they have this uphill battle, right? It's like, oh, if the gross profit coming out of it was only 20% based on the initial estimate, well now to try to get them to 35% is nearly impossible, Right? They have to pretty much work some magic on that project. So we're going to be switching that next quarter to actually be a variance percentage. So basically it's like the estimate, let's say it was 20, 35%, because that's what all residential general contracting, renovation companies should be aspiring for, 35% gross margins or better. And so if we're estimating less than that or above that, that's what they should be monitored on is like, okay, we're at 30%. Were you above that or below that? And our goal is going to be above that. So were you, what was your variance? Were you like 5% higher, 10% higher? You know, and we'll, we'll bonus it. Good, better, best based on what that variance is from the estimate. So then it's a lot more under their control as opposed to what they're handed from the salespeople.

Yeah, that makes sense. That makes sense. Okay, tracking. How are you tracking all of this?

So originally it was us doing it internally. So myself, the person who's no longer with us, and we were doing it, yeah, a lot of time weekly updating the results, also our KPI data, we update those weekly too because we have a weekly management meeting that we do where we go through all our KPI scorecards and things like that. So we've now outsourced that. We have. I'm sure you've heard of upwork before, but we basically created a job posting on upwork and we were able to find some amazing people to work with us. They've been with us for almost two years now doing this data entry. So that's been great. Honestly. They start out smaller and then we keep adding to them and like I said, when we had that person leave that we had let go, they're plate significantly increased the amount of work they had. But we offshore it and so we use things like loom. I don't know if you know, you're familiar to Loom, but it's a recording tool that you can use. And so we just essentially used this loom software. Walked. We just did the. The way we do it every week, we calculate it, it recorded our screen and everything we're saying as we're doing it. And then we just provided that to them. We had them write the sops for it. So we knew that they learned it and knew the information. They report on it every week and some stuff is every day.

That's so good. I mean, that's another rabbit hole we could go down in terms of outsourcing, but maybe for another time.

Yeah, absolutely, exactly. And I will point out that it hasn't been all sunshine and roses. We have definitely had our ups and downs with outsourcing and it's very much so making sure that you have Those steps, those SOPs and those fundamentals in place. Whether you're building them or having them build them, it's make sure you build those SOPs and it's something that you can hold them accountable to.

Yeah, it makes a lot of sense though for data entry and like administrative tasks like that, because you can. Obviously there's a cost benefit of outsourcing. Right. But also like the risk is if you do it properly, the risk is lower than having a full time employee.

So that's exactly it. And so the one that we now work with specifically for that data one, it's actually like they're offshore, obviously they're in another country, but they have a whole team behind them. So we actually have three people that we regularly work with. But the nice thing is is that if one of them's off or something like that, it's not all just on one person. Right. There's multiple people that kind of know that same data. And again, by them building out those SOPs, it's if somebody does leave, we can easily be like, okay, watch these looms and here's the SOPs that they built and they can onboard essentially onboard themselves.

Bit of a curveball. Do you hold your external outsourced contractors to account on your values?

Oh, good one. No, we don't. They do know them. Like we provide, you know, like a little summary about us, about our company and things like that. So it does list the Values and everything that we don't do any type of like measurement or you know, check ins. As far as that, if they weren't.

If they weren't doing the work based on your value set, then they wouldn't be employed anymore. So.

Yeah, that's exactly it.

Yeah.

And this is our third VA group doing this, so we didn't have success the first two times and the first two times we did it was actually through a company that provided vascular. So two different companies we've worked with. But eventually we're just like, no, let's do it ourselves. So we used upwork, we created the job posting listing and we went out and sourced our own people and that's what we've had the most success with so far.

Okay, good to know. Thanks for providing all that amazing value. I mean, honestly, I was just enthralled with the compensation model alone. Like anyone that's listening to this episode, I'm sure would have got a ton of value out of that and a bunch of ideas they could implement in their company. Bit more of a selfish question. How did you come across APB and what made you decide to get involved?

Yeah, it's a long story, but as you can tell, I'm pretty long winded to begin with, so I'll try not to make it too long. But we came across you guys through the SOURCEI report. So as I mentioned before, We've been with BuilderTrend for quite a few years. I'm not exactly sure how they advertise it, whether it was an email or something, but we saw that there was this SOURCEI report. So sourcei, I'm sure the listeners know, but it's state of residential construction industry Sourcey. Yeah, selfish plug towards you guys, but it is amazing. It literally lets you know where you stack up against other construction companies. Not just in general, it's even by country. So I can look at it like, okay, here's the other Canadian companies, here's what it looks like for Americans, here's what it looks like for Australians and New Zealand. And so I can, you know, compare our results or what we put in compared to the output of the source you report. So that's how we found out about you originally. Which then I don't know if you can tell, I'm sure you can, that I'm a pretty big nerd. So I like to read, I like to consume a lot of podcasts. YouTube University. So then I stumbled across your guys's podcast and started consuming tons of that and really fell in love with, with all the information you guys were saying. And we were trying to steal as much of that as possible to implement into our business. We just didn't have all of the information. One of the things we actually connected on @IBS was you guys have a book that you came out with Contractor Secrets. I think it's called the Red Book. Yeah, Professional Builder Secrets. All right, thank you. We always call it the Red book because it's, it's red and we have multiple copies now in our office. And while I've read it three times and we made it mandatory reading for our management team and we essentially built our sales process, our sales blueprint, following the steps in that book.

Cool.

And so we were getting lots of value from you guys already. Already knew who you guys were. Then we crossed paths at ibs. Honestly we were already probably going to be looking to join you guys. But you had a show special on which was an accelerator program. It was a six week accelerator which after finding out later, I think that was something fairly new you guys were offering.

Yeah, yeah. But it's pretty much brand new at rbs.

Yeah, it was phenomenal. It was like a six week course that. Yeah, I would say it's like taking six months of one on one coaching and condensing it into six weeks. So it's very involved. I do recommend, if anybody's doing that, that you make sure you have time available at least. Like what we would typically do is we'd have the one meeting a week with like with your team and then we'd usually carve out like a whole morning or whole afternoon with the management team to work through what the things were for that week. But we'd also sign homework too. So the management team would have to watch and learn about that week's topic and then we would meet and discuss for basically half day and implement it the way it is for our business. And then we'd have the actual one on one coaching with Clint. Shout out to Clint, our coach, who is phenomenal. And it was honestly a no brainer. Like when we finished the six weeks we were like wow, our company has progressed so much in six weeks. We need like it basically paid. The whole year was almost paid for. I would say it probably is paid for just in what we learned in the first six weeks. So definitely around like the wipa, the work in progress, accounting adjustment, that was a huge one for us. We had been doing kind of a version of that ourselves but didn't know enough of it. Didn't, you know, really helped us dial in our numbers. And I felt like we already had really good KPIs and scorecards and data. But after that six weeks, I jokingly said to our management team, I feel dumb. Like, I feel like all the stuff I had in there was not even close to where it should be. It was a real eye opener for us. But it's, it's been phenomenal. It's been great. We're learning so much. Yeah, can't, can't recommend it enough. You'll. You'll make back your money and then some. And actually, you guys guarantee it, which is even better. So it's, it's pretty much impossible.

Thank you. But my biggest takeaway from all that is you've got to put the work in. I mean, it doesn't matter what framework you've got, what coaching you've got, or any of that kind of stuff. If you're not willing to do exactly what you just did said, then actually get the management team together and put in the time and actually implement things, then you won't see results from anything.

That is so true. And honestly, like, you know, stepping backwards, that is part of what we focused on as a company. We knew that we couldn't just be working in the business all the time. We really had to carve out time to work on the business. And I would say that today probably 90 to 95% of my day is on the business, not in the business. I'm rarely in the business. I couldn't even probably list off five of the projects that we're working on today, like from a address perspective or something like that. Like, I don't know the detail at that level because I have an amazing operations manager who focuses on that and that's their job. And we have an amazing sales manager who's also my business partner, Derek. But he, you know, that's his side of the coin and that's what he has to focus on. And because we all have KPIs and numbers, I just have to make sure that I have checks and balances and signals so that if things aren't being met, if we're not meeting the spots that we want to in our KPIs, I can see that and address it. And then that's what we dive deep into. And that's the fundamental need to focus on. And that's where we make changes. Things like our bonuses, you know, changing the bonus structure so that it does reinforce what we're looking to drive within our business.

That's amazing. It might actually Help being remote to work more on the business. Just reflecting on that so much.

We actually had a meeting today with our management team and we were literally talking about that. So our operations manager, he. Nick shout out to him. He's like our second employee ever. He's been with us for 10 plus years now. He unfortunately is in the weeds right now. Like we have a construction manager who just joined us last week. We have a bunch of new construction crews that have joined us. And he's at the same time still trying to figure out all the projects that are going on and manage all that stuff. Plus people are taking vacations this time of year. So he's flat out. But we talked about that like literally when he's in the office, he has more distractions because people know he's available and they'll come see him. And we're literally talking about now putting like in office time for him where it's like, okay, they can only bother you between these hours because you can't get your normal day to day done because you're in the office and you're accessible. And so that since I've left the office, I've noticed that a ton. It's like, unless it's a major emergency, nobody's reaching out to me. We have regular cadences for meetings of different topics. And so if it's not a fire, which 99% of the time it's not, that's when those things are brought up and that's when we go through those things and it's a lot more structured and it's when I want to work on it is when working on it as opposed to like, yeah, whatever fire or whatever's coming and being dropped onto my plate to work on at the time.

I feel like the more we talk, I'm like, wow, that's another episode right there.

I could talk to you for three.

Hours about your company. It's awesome.

Oh, you just have to have me back on. Well, I'd love to love to chat more about it.

That's so good. But look, I think the attention span of our listeners is probably reaching its limit at this point. And I'm selfishly wanting to talk more, but let's try and put a bow on the episode. What's one piece of advice you would give to builders out there who are looking to improve their company?

Yeah, I think I touched on this already. But it's literally that working on the business instead of in the business, it fundamentally will make such a big difference for your company if you're able to take a step back and look at it from, you know, that 10,000 foot view down as opposed to being in the ground level every day. You just, you're reactive instead of proactive when you're doing that. As you know, in this business there's always something happening and there's always a fire to put out. You know, there's always work to be done and there's, there's more work in a day than there is hours in the day. So it's really crucial that you carve out that time and block that time in your calendar so that you are advancing and working on, on the business and not in the business. And just to maybe to add to that or to put an exclamation mark on that. Is that self betterment, like spend your time getting better, learning more. There's a million free resources out there. Obviously I've already recommend the paid resources like apb, but there's lots of free ones. Books are super cheap. You're basically taking something that somebody's learned in a lifetime, distilling it into a couple hundred pages and you're paying 20 bucks to learn something that somebody took a lifetime learning. Traction. For anybody, that's a new, new to business. Or maybe you feel like you're working on the business side isn't figured out enough. Read the book. Traction. It's very hands on, actionable stuff that they help you put in place. And I honestly feel like APB's built on, I don't know if it is or not, but traction. You guys use a lot of the same terminology that comes from traction. It's just built upon that. So it's like taking the fundamentals of traction and then making it specific to the construction industry, which is fundamental.

Yeah, I mean, that's exactly right. Like Russ and Sky have been avid learners and readers and stuff for a long time and you obviously run successful companies as well. But it's not like any information is new out there. It's just about getting it in the right way and in the right order and knowing how to implement that. And also to be honest, I mean, the biggest takeaway I've taken from this interview, there's been, there's been lots actually. I mean, the way you guys are tracking data and tying that into the objective of the organization and motivating your team based on that data, like that's amazing, but really it's your mindset and willingness to actually put in the work to learn more and improve. That's what it comes back to. Like if you've. If you have that mindset of just small improvements day on day, day on day, you'll get to a great spot at some point.

Yeah. And that. That's perfect way to put a bow on it. That's. Couldn't said it better myself. Well, that's exactly it. Well, I'm just.

I'm actually totally, like, I'm really motivated from. Yeah. Your story and just your. The way you approach it all. So I appreciate you coming on the show and sharing that with everyone else.

Oh, my pleasure. And like I said, I'd be happy to come back again. I know it's a pretty coveted spot. You have some pretty phenomenal guests on there. Not to mention all the information that Sky, Russ, Andy, yourself is always providing. But I'm an open book. I'm happy to share, whatever. If people want to reach out to me and have questions, I'm also happy to share. Yeah. Share any information, any. Any way I can help make other people's businesses better, I'm happy to do it.

That's a can of worms for you. But yeah, I'm sure, like, if I was running a building company, I'd be reaching out. Absolutely. You've got a lot of value to add there. So, Trevor. Yeah. Thanks so much for coming on the show today. I've really enjoyed it.

Thank you. I loved it. It was fantastic.

A big thank you to our listeners as well, 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. And if you want to ask Trevor a question, maybe you can reach out to him as well. Until next time, have a great day.