212. Document, Delegate and Grow With Jon Engquist

Welcome to another episode of Professional Builder's Secrets. In this episode, I interview John Enquist from Subtrack. John is a third generation contractor who has built a service called Subtrack that helps builders document their standard operating procedures and turn them into live checklists that your team actually follows. We explore how to go beyond SOPs and start enforcing them in a way that that gives your business consistency and enables it to grow. 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.

System is how your business operates. Every builder has a different system in their business. Everyone has a different way of doing things and so it's really important to document how you do things and how you want things, things to be done in your business.

Yeah, there's enough chaos, so you've got to control the components you can control.

A lot of contractors actually enjoy or get used to working in chaos. It's those gray areas that allow them to kind of operate in a way that they're comfortable with defining your system. Writing SOPs kind of holds up a mirror to both the parts of your business that are working really well, but also the parts of your business that are not working so well that need improvement. Think it's very brave to realize that there's more than just firefighting all day at at some point you're going to want that return. And the reason you don't work for someone else and you work for yourself is that you want that time freedom, that flexibility.

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 John Enquist from Subtrack. John, welcome to the show.

Yeah, thanks Will. Thanks for having me.

Very excited to have you on today. Can you give the viewers a bit of a background about Subtrack and how you've landed where you are today?

Yeah, absolutely. Subtrack kind of in a nutshell is a business systemization platform. I spent kind of a lifetime in the construction industry. I'm a third generation roofing contractor by trade and spent the last 15 years managing projects, managing people, as vice president of a commercial and Public works roofing company here in the Bay Area. And in my time there, talking with other contractors, kind of experience from my own company, I saw how difficult it was to communicate standards and expectations to my team, to subcontractors, basically everyone that we interacted with. So I wanted a way to kind of codify our system and then be able to make sure that people actually follow it. And that's kind of how Subtrack was born. It's a software platform that helps contractors specifically to document their systems into a playbook that is accessible to their whole team and then make sure that those processes and best practices are carried out in the field. Yeah, great.

Maybe we take it back just a step. What's your definition of a system?

Yeah, well, system is how your business operates. So every builder has a different system in their business. Every roofer has a different system in their business. Not everyone runs their company the same way. And that's because people have different capacities, different size teams, different scopes of work that they do, different customers that they handle. So everyone has a different way of doing things. And so it's really important to document how you do things and how you want of things to be done in your business. And a lot of that has to do with the definition of done. What is your standard? What is when you tell someone to clean up the job site, for example, how clean are we talking here? You know, a lot of people have different expectations of what that means, but do you want everything just kind of swept up and just kind of left as it is, or do you want it really tidied up? Do you want everything locked up, material secured, that type of thing? And so having that definition of done is kind of what defines your system and how you want things done in your business.

So you're saying a system is an overarching infrastructure for a company and how it runs? Is that right?

Correct. Yeah. And there could be different processes for different departments. You know, in your sales department, it's good to have a defined sales process for estimating. It's good to have a defined estimating process so you don't miss anything. So you kind of cross all your T's, dot all your I's, and then, you know, accounting closeouts, managing subcontractors, scheduling. You kind of want a standardized process for all of those things. And, you know, your system is ideally, in a perfect world, you know, we all know construction has a lot of chaos, but in a perfect world, how would you want your business to run? You know, take a good project. What went well, on that and what didn't, and the stuff that went well is what you're trying to turn into your system, your kind of signature of how your company operates relative to someone else's.

Yeah, there's enough chaos. So you've got to control the components you can control, right?

Yeah, absolutely. Absolutely. We all deal with subcontractors who are a nightmare, clients who have unreasonable expectations. And so all you can kind of control in life in general is what you can control. So. And that's where that comes in, documenting your best practices. So that way you're at least accounted for one variable and that's yourself.

So those processes that you're talking about, which sit below the system, I guess are what are called SOPs, or standard operating procedures. Right? Is that your definition of them as well?

Yeah, yeah. I mean, we talk about systems, we kind of break it down. So traditional SOPs, right. Standard operating procedures. A lot of folks may think that that is for an individual task, right? How to order office supplies or how to create a schedule or create a budget. But a lot of times too, I like to organize them by more of an overarching process. So a good example is like your sales process, right. That's a whole large process that has a lot of different steps and tasks along the way. The way I think about it is an SOP may be for how you qualify a lead on that initial call. For example, that's only one part of your entire sales process. So the way that we think about it at subtrack is an SOP is kind of a. A bite size component and a piece of your overarching larger process.

Yeah, so I guess it's like a hierarchy, isn't it? You've got your entire business and then you've got your department processes and then within that you've got sub processes, which are SOPs, I guess you could call them.

Yeah, absolutely. And how you kind of organize those and structure those is kind of what makes your system.

Why do you think so many building companies struggle to document and implement effective processes like this?

Yeah, well, I think a lot of people, it's funny, I think a lot of people want to tell themselves that it's because they don't have enough time. Right. But I find that we often make time for things that we want to make time for. So I don't know that that's necessarily it. What I've found working with contractors is that a lot of contractors actually enjoy or get used to at least working in chaos. It's those gray areas that allow them to kind of operate in a way that they're comfortable with. Right. And defining your system. Writing SOPs kind of holds up a mirror to both the parts of your business that are working really well, but also the parts of your business that are not working so well that need improvement. And it's a bit. Can be a bit scary. It can be a bit intimidating to have to really sit down and figure out, hey, why is this not working? And a lot of that is holding yourself accountable to doing things the right way, not cutting corners. And so a lot of builders, and a lot of people in general are just afraid to kind of hold themselves, I think, accountable to, you know, those processes and those best practices. It's always hard to kind of practice what you preach. Right. It's easier to kind of tell people what you want rather than sit down and really hold them to that standard. So I think that that's a big part of it as well. And I think a lot of contractors also think that it's a waste of time, that maybe if they. Even if they sit down and they write these things and they decide what their system is and what those best practices are, how do we get people to follow those? And that's a common issue with SOPs in general. You know, how do we make all these SOPs, but how do we get them into the hands of the people doing the work in the place of where they are doing the work so that they can really refer back to them and really follow them when the time comes to do whatever task it's describing?

I would imagine, as well, having the trust and confidence that they will follow the process as well.

Yeah, I mean, that's the whole kind of name of the game, right? I mean, you're in business to make money. You're in business to employ people that can do more work than you can just do by yourself. And so finding a way to get your years and years of knowledge and how to avoid mistakes and risks, get all that out of your head and in front of employees that may not know all of those things or haven't learned all of those things yet, is such a big competitive advantage for builders. Being able to have, whether it's a remote employee or a field employee on site, maybe your best foreman, superintendent, that kind of thing, but just really being able to make sure that they are staying on top of everything you need them to stay on top of is huge.

Do you ever see builders that almost wear it as a badge of honor that they've got everything within their Head. And they're the expert. They're the one that everyone needs to go to to get the problem solved.

Absolutely. Absolutely. And sometimes it can almost become like a bit of an addiction, kind of that hero complex. Right. People want to feel very important in their business. A lot of contractors view themselves and their business as almost one in the same. Right. And I think it's very brave to step out of that and to realize that there's more than just firefighting all day and that you don't have to be the person to come in and save everyone. And it's even more empowering and actually better for yourself and to train others to kind of pick up the ball and run with it. That can be a really freeing and empowering feeling. And I think it's the only way that you can really scale a business, you know, responsibly and profitably and with control. If you don't do that, then you're going to be the bottleneck for everything. You're going to limit how fast you can grow your business, how large you can grow your business, and how profitably you can grow your business.

Yeah. Can we talk a little bit more about the why, so why documenting processes is so important? Because to your point, I think you touched on it earlier. There's so many different priorities in a day for the owner of a building company that, you know, a client calls over here or something's going on on site over here, or, you know, something's happening with their financial accounts over here. So how do they block out all of that noise and understand the importance of this process?

Yeah, well, you just got to make some time for it. Right. I mean, you really just have to block out. And it doesn't have to be a lot. It can be an hour or two a week where you're just sitting down and having some concentrated time documenting some processes to make your business run more efficiently. And what I like to say is you start off with processes that you already do really well. Right. A lot of people will say, start off with your biggest pain points or your biggest challenges, but I like to kind of build up some momentum. So if a contractor is out there wanting to document their processes, start with something that you do really well, whether it's your sales approach or your client meetings or dealing with subcontractors or your scheduling or, you know, you know how to do something really, really well. And that's what makes your business better than others. And so document that first and foremost, and then you can start delegating some of those tasks to other people. And like I said, that'll free up more of your time to be able to continue to work on your business and not just be that firefighter working within your business. So all it takes is an hour, two hours a week. I think we can all probably find that if we really just, you know, put the phone into, you know, do not disturb mode and just put some heads down for a little bit. The world's not going to end, you know, it's going to be fine without you. You have good employees that can kind of take over for a couple hours, and then the benefits are really just huge. I've talked with business brokers, for example, who talk about how a documented and systemized business, you know, one with SOPs and all the right documentation, may sell for 30% more than a business who does not have documented systems. And it's kind of easy to tell why. Right. Someone wanting and looking to buy a business doesn't want to buy a job. They want to buy a repeatable, systemized business. And so by documenting your systems, you're. You're really creating, you're really turning your business from a job into an asset that can outlast you and can be transferred and sold and passed on to whoever you wanted to pass it on to. So a lot of benefits there.

Yeah, yeah, that's a great point. Actually, a lot of builders do get to that point of wanting to retire or wanting to move on to the next thing in their life, and they don't have anything that's sellable because it's so reliant on them and their IP within their head and all of that kind of stuff. Right. And the only way it becomes a sellable asset or something you can pass on to the next generation, potentially, is if it is documented very well.

Yeah, I mean, I always kind of think what's the point of running your own business unless it gives you back time freedom at some point? Right. I think a lot of contractors are willing to kind of grind and do the work that's necessary. I mean, no contractor is afraid of hard work. That's why you're in construction. But at some point, you're going to want that return. And the reason you don't work for someone else and you work for yourself is that you want that time freedom, that flexibility. And ultimately, at the end, wouldn't it be nice to be able to sell your business or pass it on to someone else? Either keep it in the family or. Or pass it on to someone who can run it for you? And now you can work 20 hours a week, 10 hours a week, or maybe not at all, and still enjoy the benefits of having that business turn in profit for you.

Yeah, that's a great point. That's a whole other podcast, probably just. I like what you said about just allocating even an hour a week to start. That's something we do. We have time. The leadership team at apb, we all have time allocated in our calendar each week. We call it delegation time or process time, where we literally focus on just, you know, setting up our team for success with, with processes and stuff like that. So it's really powerful just to have that in your calendar each week.

Yeah, absolutely. And it holds you accountable. I mean, part of this process, when you're the leader of a construction company, there's no one there to hold you accountable. And that's kind of a blessing and a curse. I'm sure everyone knows how great it is to be able to operate on your own and kind of make your own schedule and make your own rules. But at the same time, it can be kind of a lonely feeling. It can be a difficult and stressful feeling to be the one at the top, the one making all the decisions. There's no one else to kind of commiserate with, bounce ideas off of. So kind of taking that time to invest in yourself and to invest in your business. Take an hour, take two hours to really document those things so you can hand them off and start making a real business rather than just kind of a job you show up to.

So what does it actually look like to document a process in practice? You mentioned maybe starting with the thing you're best at or what makes your building company better than others or something like that, because you're most passionate about that. But let's say, for example, that's your sales process. Where do you start?

Yeah, so let's start with that first task of qualifying a lead. What you would want to do is make sure that you capture not only the steps that are required to qualify that lead, you want to capture things like why it's important to qualify the lead, what specific questions you want to ask, what we're looking for, and you really want to write your SOPs like it's the first time someone has ever done that process before and you're explaining it to them. So try not to use any industry jargon or anything like that. And your SOP should also have, if possible, pictures, diagrams, videos, attachments. It should be a whole kind of self teaching tool to let people know how to do that process.

Yeah, that's a great starting point. So let's say, for example, you've documented your sales process from start to finish or even just the qualifying aspect like you touched on there. How do you then get other people to follow these processes so you feel confident in them being implemented?

Yeah, and that was the kind of the million dollar question that we were looking to solve with Subtrac. Right. A lot of contractors have standard operating procedures, but the number one complaint that I hear is it's hard to keep get our guys out in the field to follow those processes. And so that's where a tool like Subtrack comes in. So we allow people to, we help people document their system and online playbook and then use those sops and workflows as real life checklists and tasks that can be followed on site. So we think it's really important to not just give people tasks to do, but to also include that SOP that how to do the task, what the definition of done is with that task. So Subtrack is a task management system that also attaches that SOP so that your, that your employees know what to do and how to do it, not just, not just what to do. And then we find that that makes a big difference because a lot of times people have the best intentions, they have a lot of great effort, but they just don't know how to do the thing. And so keeping that SOP right there, top of mind where they're doing the work is really key for people to execute things the way that you want them to.

What are some of the impacts you see on companies that do start to implement strong SOPs across like their whole business?

Yeah, well, a number, a number of things. One thing is that kind of the cream rises to the top. Right. They're a players do not shy away from following SOPs. In fact, really good employees want to be told what the expectation is because then they can go past it. Right. It's those people in your company that kind of shirk away from responsibilities and standards that don't really like following SOPs and following the rules. And honestly, those are the people that you don't really want in your company anyway. So what we see is a company that has a playbook of SOPs and has a training program is much more geared for success bringing in new talent. A lot of people like to be part of a company that can train them well, that can give them knowledge and to progress them in their career. So that's a big factor for it. But Then we also just see companies being more efficient in general. Right. So there's less rework, there are less callbacks, there are more standardized processes, more accountability with subcontractors, all of these types of things that benefit and really free up the contractor's time to continue to grow, to work on the business. Internally. We have this kind of diagram, we call it the contractor hamster wheel. And it starts off you don't have any documentation and that makes it impossible to train people and that makes it impossible to hold people accountable. And then that leads to problems and micromanagement on projects, which in turn takes all of your time and doesn't allow you to make any systems. So it's this kind of never ending cycle that a lot of contractors get caught on. And the only way to kind of get off of it is to document your systems once and for all and really make sure that you have a playbook that you can communicate to your team.

How do you balance the detail with the effectiveness of an sop? I think we've probably all been in that situation where we've, you know, 150 steps to do something which takes five minutes kind of thing compared to not enough information where you don't really know what you can do. So how do you kind of balance that?

Yeah, I mean, certain tasks in construction require more detail than others. Right. I mean, you don't need to go overboard. But I think it is important a lot of people, you know, different people communicate in different ways. Some people like a lot of context and some people kind of like to fill in the blanks themselves. And so you're right, it is a bit of a balancing act there, and it's a bit of an art rather than a science, I'd say, I'd say on the, on the one side, err on the side of too much detail, give people enough context to really go above and beyond. I mean, if that's what you want your company to be about, if you want to provide exemplary customer service, provide a really good product to your clients, then you want to do the same thing with your standard operating procedures and really give all of the knowledge that you have, all of your years of experience into training a new hire or an existing employee.

Okay, so tell me more about how subtrack actually works. Just like you said before about a standing operating procedure for someone that's never heard of a process before. No jargon, nothing. If I've never heard of subtrack before, how do I start building processes in my business?

Yeah, well, actually, in Subtrack, we kind of take a lot of that guesswork out of it for you. So when you sign up for Subtrack, you start off with a pre made playbook for home builders and remodelers. You'll get preloaded 200 end to end workflows, over 2000 sops, pre written for you, industry best practices, and you can take it from there. We find that contractors, you know, they don't have a ton of time to do this. So we find giving them a starting point really makes it a lot easier for them to get going. So in Subtrack we give you all those templates and you can edit them. We have built in AI to help you get the idea ideas out of your head really fast with speech to text. So you can literally just speak the process into the program and it will convert it into a ready made SOP that's nicely formatted so your team can use it right away. So that's something that we do. Another way that subtract kind of helps you get your instructions from your, the office out into the field because not everyone speaks English all the time. You can write your standard operating procedures in English and they can be translated to Spanish or whatever other language is being spoken on the job site or by the reader of the sop. So that sort of automated translation is really useful and kind of makes it so that there's no more communication errors there and there's no excuse to oh, I didn't understand the instructions. So that's really nice as well.

What's a workflow in that situation? You mentioned workflows. Templates, obviously. I'm assuming templates are literally like plug and play versions of different, like common processes within a construction company. How does the workflows tie into that?

Yeah, so the workflows are those kind of processes we talked about, right? A sales process or we have a number of checklists, for example, pre and post inspection checklists for all of your trades. So you're looking to build a home. We have pre and post inspection checklists for everything from slab to windows to electrical to roofing, doors, cabinets, painting, whatever you need, we provide those pre built checklists for you so that you don't have to come up with everything from scratch. So for a builder who doesn't, who wants to systemize but doesn't have a ton of time to think about everything that they want to put in their playbook, we make it super easy for you to get started and start using these systems from day one.

Cool, Sounds really good. What's the mechanism that the team members on site access this information.

Yeah. So it's all through. We're all mobile optimized. So in Subtrack, you can share everything through either a link or a QR code. So you can text your on site team with a link to instructions or you can print out a QR code, put it on your job site signage. So people who are on site have that, the standards for how you want the job site cleaned or any sort of safety instructions really accessible right on their phone. So all you have to do is scan it like you would any other QR code and it pulls up those instructions on phone, tablet, whatever you need.

Yeah, cool. Well, John, thanks for coming on the show today and sharing all that advice around documenting processes in a building company. I think it's super valuable. Obviously, there's a great alignment with what we teach at APB as well. So appreciate you coming on and hopefully for people check out Subtrack and see what you're doing.

Yeah, absolutely. And if anyone out there listening wants to schedule a demo, I'd love for you to come to subtrack.com demo. You can meet with me and we can check out your business and see if Subtrack will be a fit for you and see how we can help.

Yeah. I love what you said around defining what's done. I think that's a nice way to kind of summarize what we spoke about today.

Yeah. Yeah. I mean, it's a very important but often not documented part of construction. So, yeah, if we can help people with that, they'd be set.

Yeah. So like John said, check out subtrack.com if you want to check out what they're doing. Also subtrack an APB rewards partner. So if you're a member of apb, jump on their rewards page and you can get a cash rebate for getting that demo with John. So that's a wrap.

All right, thank you.

Thanks for coming on, John. 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.