219. Financial Literacy With Blake Doolan

Welcome to another episode of Professional Builder Secrets. In this episode, I interviewed Blake Doolin from the not so Silent Business Partner. Blake helps builders take control of their financials in a way that feels both simple and practical. His company supports residential builders with bookkeeping, payroll and financial reporting so they can stay on top of their numbers and make more confident decisions. In this episode, we explore the challenges builders face when it comes to tracking their financials on a day to day basis and what steps you can take to get back in control. 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.

Builders are really good at their craft, but a lot of them don't quite understand their numbers.

If you have confidence around your numbers, you can just make decisions much more easily.

We're not always chasing the top dollar, we're chasing freedom. The biggest room to improve your business is getting the right job management system. So what you do is you make everything as easy as possible because if you're easy, you'll do it. If it's hard, you won't.

I think the big thing in terms of picking the right partner, they need to have experience with construction financials.

I think I'm making money, but for some reason there's never money in my bank account way of thinking. This just solidifies what direction your business is going to be. Completely free. You'll want a good, sustainable business and the only way to get there is to understand your finances. Foreign.

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 Blake Doolin from the not so Silent Business Partner. I got that out.

It can be a bit of a tongue twister, that one, but it really encapsulates who we are and what we do. Because I'm not a very quiet person, as I'm sure the podcast listeners will find out today.

Yeah, yeah, they're in for a treat. They're in for a treat. But Blake, thanks for joining us today. You've been a partner with APB for a little while. You're heavily integrated with a number of other softwares and players in the construction Industry in Australia in particular. But could you just give a bit of a background about what the company does and how you fit into it? Yeah.

Awesome. So the company started back in 2011. We are a bookkeeping first company that really helps builders understand their numbers better than any financial person around. They don't need to understand how you get there. Go to TAFE or uni or college if you want to do that. But if you can understand your own numbers, what that allows you to do that it gives you the freedom. So we started back in 2011. My dad started it back when it was just a generalist bookkeeping firm. But because my mom is actually the builder in our family, she was the first fully qualified female builder back in the 80s in New South Wales in Australia. And through that we found that builders are really good at their craft, but a lot of them don't quite understand their numbers. So with easy setup and understanding of the other systems, it can become really easy for them. I took over back in 2020. My dad sadly had an accident, quite literally fell off a cliff. We can joke about it now because he's all okay, but he fell off a cliff and just was laid up in hospital. And from that day on he's been retired. And then you've got me now the younger, better model, as I like to say.

That's really interesting. I think a lot of builders could relate to that journey because you know, whether or not they are don, like your dad in this story or yourself, that's very common in the building industry for having that kind of transition to the next generation.

Well, it's the hardest thing to do, right. Like you come from having an old head and moving into a bunch of technology or you've got some up and comers within your own business that you would really like to hand off the company to, but you find it hard to run. It's not gonna be super attractive for em, even if it is your kids or it could be some project managers that you wanna buy you out. So what you do is you make everything as easy as possible. Cause if you're easy, you'll do it. If it's hard, you won't. It's a pretty, pretty simple world.

You must have had an appetite to take on the general manager role or were you kind of pushed into it?

Trial by fire? My background is actually a sportsman, so I had a full right college scholarship to the US to play golf and I was going to go study astrophysics over there, but I broke my back when I was about 17 and I had my scholarship pulled. So what happened was I just was like, oh, I'll go work in a bookkeeping firm as a little. As a little bit of a gap to go work for dad. And then I found a love for actually helping people because I've grown up in small business, so helping people is really where my passion lies. And I want to help as many people understand their numbers because I think it is what truly sets you free within your own business. We're not always chasing the top dollar, we're chasing freedom. It's just that money seems to be intertwined with freedom.

Yeah, it's very true. If you have confidence around your numbers, you can just make decisions much more easily in your business, in your life. Yeah.

And like I said, the easier you make decisions, the more frequent and the more confident you will make them.

What challenges do you see building company owners face when it comes to tracking their financial numbers every day?

Well, there's a few very common challenges and a few very common areas where it's mass improvement models, and one is truly being consistency. That's my favorite because you find guys that may be invoicing once a month or every once in a while is once in two months and, and all of that and tracking numbers when it's an inconsistent model, it just means that you're never going to have accuracy. The biggest room to actually, you know, improve your business is getting the right job management system for yourselves. Right. As a, as a builder, you're very good at building and it doesn't matter what country, what state, what territory you're in. Right. If you can track the numbers easily through your job management system, which integrates into your accounting software, it means that you've got essentially a board of numbers where you can find. If something does go wrong with admin, data entry or anything like that, then you can quite literally find where it's gone wrong and make it easier because. Yeah, it's. Making it easy is probably the biggest thing.

Yeah. I mean, that software has come a long way in the last five years in terms of the number of options out there. It can be quite confusing, to be honest, for a lot of builders. But there's also. Every software has its own strengths and weaknesses as well. So how can a builder go about finding the right one for them?

Well, it's usually at the different stages of business that you're at. Right. So across the board there are a few different levels, one being a very bare basic, which is something like a build exact. Right. It will get you into the understanding so if you're coming from like a spreadsheet background or just keeping it in your head, it is a massive step just to get into a system. So you go with the simplest, easiest to use, right? And you step into something like a wonder build, which is like your mid range model. It's bringing in a lot of the aspects from the bigger boys. Integrates really nicely to zero. I know they're planning to integrate to my B. Not sure about QuickBooks for our American listeners, but I know that the Xero integration is awesome and they're planning on mib and then you step up into the big boys, like your pro cors, your builder trends. There's Jonas in Canada and all of that where you can kind of get the all in one system. Now in Australia, just I'll try to speak globally. But for our Australian listeners, there's a few of them that don't quite do GST right for us and unfortunately build a trend. And a few of the other really big ones do fall into that category. So you just need to be careful with those. But it kind of depends on your stage of business. If you're starting from nothing, you go to whatever you find is easiest, the two easiest to use and the two most common right now of Build, Exact and Wonder Build. I really like them because they both integrate to zero and I'm a zero lover. I do love zero because I find it is easy for business owners and then it'll go from there.

Yeah, okay, cool. Well, if you've got a good job management software in place as a builder out there, or you know, you're just kind of dipping your toes into that, what do you need to do next to start thinking about tracking your finances on a regular basis.

Yeah. Right. So it comes down to a bit like when you're building a house, right, it's all about your team and who you have around you that's helping you. So I could be your accountant, a bookkeeper, a cfo. It could be an internal team. But you've got to review what team you've got helping you and how consistently they can help you. Because as business owners, right, we all know you wear a million hats. So we get a couple of hats off our heads and just do it as a. I understand my numbers and people are presenting them to me. Think like a bigger business, even though that, you know, even if you're only turning over $600,000, right, think of a bigger business. Here they have people present the numbers to them. So it's the who, not how. Method. Great book by Dan Sullivan. One of my favorite books in business. It actually changed my business. Heard from the intro I did inherit the family business so it changed the way I did it. But finding the right who to do something. And there will be industry specialists. So for example, they're all obviously very good industry accountants that can help you on the top level side of understanding your numbers. Okay. So we're looking forward projections and tax planning. But then there's the guys that will help you with you week to week. That's what you, I'd call it educated bookkeeper. Now for a build up, it's very easy, right? You find these people, they will hopefully be able to help you. People like myself who partner with companies like the APB who vet you and make sure that you're good at what you do. So find the people that are vetted so that they can help you find. Big thing is once you've got your job management system set up, link it to your accounting software, make sure you're tracking jobs. So you've got individual jobs that you can look at. So and then you can make it easy.

I think the big thing in terms of picking the right partner, whether they're through APB as a partner or you've got your own bookkeeper or accountant or you've got someone internally, they need to have experience with construction financials because it's totally different to pretty much any other industry in terms of how you understand it.

Oh, 100% it is. I say in all the industries I work in now, 70% of my client base is builders. But again I nation construction. But like how I reckon I tell my builders to do it. Is your nation a certain thing, but if people come along that are willing to pay the margin, you also take them. But I nation construction, right, but 70% of my client base is builders. But across all industries I have worked for, there is two industries that always come up that you need a specialist no matter what you do. It is mining and construction. Mining because everything's so expensive and there's so much of it. And construction because it is a very unique industry in the fact that, well, let's say your average builder is what, 25% gross profit if they're a really good builder. So that means 75% of your costs are just pure materials.

Like you're dealing with big numbers. Even if you're a small builder, you're doing a couple of homes a year or something like that, it's still a like several million dollar business, right?

Yeah, 100% you got a lot of.

Cash flowing in and out of the business that isn't yours.

Yeah, 100%. Like you have so much money going in and going out and your progress claims can be so separated. So something like work in progress or work in progress actuals, depending on where you hear it from. Or wipa. WIPA is very, very important for a builder as well. And look, Will, you'll know from dealing with clients through the apb, there are a lot of people, people out there that get it wrong. And if you don't find that person that is industry specific, the thing that happens is it can swing. Like I have a client who came to me, he actually came from a quite a reputable accountant, generalist accountant, but he was very reputable. But he put the work in progress wrong, $500,000 in the wrong direction. So all of a sudden that's a million dollar swing if you get it wrong right in what your numbers are telling you, which can completely change what your perspective on your own business is when making business decisions going forward.

When I cut you off and before we went on the WIPA tangent, you're about to talking about P. L's. Do you want to take me back to that?

Yeah. My favorite thing to do because I'm a finance guy is I like to look at a few different aspects. So you've got your job management system that's purely for your budgets versus actuals. So understand. So we budgeted X amount for the job. We're making sure that it's hitting that nice and easy. That's your weekly look. Then let's move to monthly. Monthly is all about profit and loss. Now I like to pull out two types of profit and loss. One is a per job and one's a per company. Right. To work out how we are sitting percentage wise. Now you gotta understand if you are doing this yourself and you don't have that finance person behind you, income's gonna swing. So what I like to do is I like to average out 3 months every month I look at it. So if I'm looking at December, I'll average it out October, November, December and then that'll give me what my average should be because that'll give you a bit more of a clear cut view of how you've actually performed against your overall company budget. Because you can have a per job budget, but you got to treat your company like a job. Right? We've got to set up our metrics, we've got to understand where we've got to get and Then go forward and tracking that can be really easy through profit and loss.

So let's say you got your job management software in place, you're tracking WIPA regularly, you've got your profit and loss statement and you're looking at that at a monthly or multi month level. How can you use that data to start making better decisions in your business?

Yeah, well we all know of the, the good old I think I'm making money but for some reason there's never money in my bank account way of thinking. This just solidifies what direction your business is going and it makes forward projection easier. So when you're making a business decision, the way to take or not all, you can never take all the anxiety out of a decision in business. But the way that you can take a bit of the anxiety out is actually having a clear cut view of the direction you're going for when you are doing that. So when it comes to that, when you get on top of understanding your budgets, your actuals, where the business is going in the direction of understanding your finances, all of a sudden making that decision, like maybe we can loan this money because for this development that I really want to do rather than saving up for another two years to do it because our account's given us the feasibility, it's okay, we can get the money and I know that I can afford the repayments. It just gives you the easy and clarity to make those decisions. Now the biggest thing is if you aren't financially clear. Money rules the world, right? It's one of those things I love freedom. Everyone works so hard to get freedom, but money kind of seems to be the helper to get to being free. Because if you try to be free with no money, it's never a lot of fun. You're not working for you. I mean if you're surfing in the water and Byron Bay and loving it, then. Yeah, but those types, types of guys usually aren't engaging with the company like the APB who are trying to be the professional builders around Australia and really get on top of their numbers to be completely free. You'll want a good sustainable business and the only way to get there is to understand your finances.

Yeah, that's exactly right. It kind of, they all feed each other, right? Like if you sort out your finances and you really understand your cash position and your profit and all that kind of stuff, you can reinvest into marketing which can improve your lead flow and the quality of leads, which then feeds into your sales system, which then means you can increase your margins which feeds back to your finances and just helps you be able to grow the business and, you know, do all the things that you said, like, may, I guess, end up surfing in Byron Bay.

Yeah, if you wanted to. Yeah. Just make sure you've got a bit of cash behind you just in case. But it's like we all, you know, as small to medium or SMAs, like small to medium business owners, we all want to make a good life for us and our families. Right. That's the end goal for a lot of people. And we all want our kids to grow up better than we did. And it's just if you want to provide that and once you know and are on top of your finances, you can use that in every facet of life, not just your business as well.

Is that playing out for you as well, Blake, as your dad set it up, good enough for you?

Well, it was set up. Bones were there. I had to change a few things, which was good, but it's just given him the ability to retire the way he wants to.

Right.

As we mentioned, him and Russ went racing through the mountains, down to the penguin island down. Down in near Melbourne there they went racing and they had a lot of fun. And not being. Being on top of your finances gives you the ability to hopefully get there one day. Because once you know your goal post, it's pretty easy to reach your goals on sales and everything. If you do have a really good coach and a really good system behind you on that front. 90% of people I speak to who are builders who have engaged a coach or someone to help them on that side. Sales isn't the issue. It's the growing too quick and not being on top of the finances. So you're not taking advantage of the good situation you're getting into.

Yeah. So tell me about an example of where you've been working with a builder where they've got control of their finances and it's improved their business and what that looks like.

Yeah, perfect. So I'm actually going to talk about a builder that achieved a life goal. So he was built up in Queensland. He joined us, actually, right as I was getting on board. He was one of the first payrolls I ever ran. But I remember he said to me, blake, I want to go around the country for six months, and I want my business to run smoothly and potentially grow while there, while I'm traveling. And I said, okay, that's a big ambition. So I got Don involved, and this is where I did a lot of my learning. But what happened was we found out that he had a fourth year. He really liked a fourth year apprentice. His financial systems were really hard to run. So there was no way that someone else was running it without the 30 years business experience this guy had and everything like that. So we set up a few different systems at the time it was zero and build a trend we set up for him. And we also set a roadmap for him to get to a goal where you can actually pay that fourth year apprentice when he is fully qualified and learning different incentive schemes.

Right.

Everyone would be quite well aware of the bonus structure nowadays where when someone does well and makes their KPIs you give them a bonus per job. Kind of started that way. And he was then going to go on holidays for six months. Right. He set a four year goal. So it's a. It was a good term. He set himself four years. He went I think last year or the year before and he said to the young fellow after setting up all these systems and everything he said if I get back in the business is the same size or grown, I'll give you 20% and I'll let you pay it off over the next five years. And he left with a $6 million turnover business netting about 9%. His overheads are a little bit high because he loved having a nice lavish lifestyle. And then he came back to a business turning over $8 million in so $2 million worth of growth in a year through QBCC audits and everything like that. He did get the growth turning over $8 million and netting 12% per year. So he actually gave the young fellow a discount on his 20% that he bought because he did such a good job and probably made him just enough. Just as much money as you'd get over the next five years anyway. Beauty of that is the way he set up his finances is easy for him to hand on to the next generation who's coming up. He's now on one to build. By the way. We did end up changing him a bit closer to where he went away for the ease of use. Yeah. So he handed on to the next generation and then from there it gave them the opportunity to thrive while he still had strong and understanding. He could log in from Uluru. He had starlink logged in from Uluru. Just checked that his jobs were on budget and the young fellow's going okay. Gave him a call once a week. And because he was on top of his finances and understand how to look at it, he got to have his life goal of going around Australia for About it ended up being nine or ten months rather than six.

Yeah, that's cool. You said you kind of set, you set up Xero and build a trend. When you say you set up build a trend, are you just setting up the way it operates with Xero and the financial side of things or are you helping builders set up their project management job work as well?

So we'll do everything kind of where the finances kick in. So that'll be setting up your cost center, cost codes or categories depending on what system you use your timesheets, your time tracking will set up all the job understanding on that side. The things that we don't usually set up is like Gantt charts and all that side, that is the builder side. But we do we set up build a trend on a financial aspect. So we'll make sure that it's easy to track all your Costco. I've got a set of very basic cost codes that I developed with a builder of ours that is just like if you have nothing, this will at least get you on the podium to at least start get you up that one step. It is basic but it works. And then setting up stuff like time tracking different divisions within the business. So you've got supervisors, some guys have their own plumbers in house and so on and so forth and making sure that that side is set up rather than just hey, here's buildertrend. We know how to use that. No, no, we, we, we can help you guys set it up.

Yeah. Cause I, I mean these days the data tells us that majority of builders are using some sort of software, whereas the spreadsheets even a couple of years ago spreadsheets were pretty popular for project management, estimating and everything, which they are. And they are still in place for some builders. But I think one of the biggest hurdles is actually putting the time into getting it set up and getting it right. So even if they are using may not be set up like 100% because it's a lot of work. It's a lot of work getting it set up properly. Yeah, yeah.

So even to the point right of you have to have your trusted advisors around you just like in any business you have to have the people you can point to when your knowledge base is tapped out. So I've actually got a builder who is very, very much actually prefers the tech side of it. So he contracts to us to help us set up completely from the builder side for builder trend and buildxact and actually show them how to use it at a day right. And then there's companies like WonderBuild who have their training built in. But the beauty of it is, is when you've got a company that can back you on your week by week work and they know the system better than you will, all of a sudden, that quick question is just a phone call away. You don't have to go through a chat bot, you don't have to go online. It is, hey, Blake, what's the issue here? Ah, X, Y and Z. We'll have it sorted in the next 30 minutes. We'll hop on Zoom today and show you it. That's kind of the value that. That kind of creates that. Unfortunately, that is one of the big problems with buildertrend in Australia. In America, it's a lot better because it is an American software. But getting time to have that training in Australia can be a bit hard.

Yeah, I think that gives builders confidence, having a partner where they can ask those kind of questions. We always recommend that builders are their numbers anyway, so they should ask. They know what questions to ask. They can ask those questions as well to partners so that, you know, no offense, you can be held accountable to the work you're doing.

I want, I want people to hold me accountable. It's why I actually say to all my builders on the way in, don't have a bookkeeper and account in the same office. They can be under the same overarching banner, let's say, like Grant Thornton, for example, but make sure they're separate because you want two professionals constantly checking each other and what comes out of that is a little bit of friendly competitiveness. But you have two people that really want to make sure that you get the best solution. I want to be checked by every client. I'd rather every client actually understand what I do and be like, hey, make sure that. Because we got 27 bookkeepers or something, all in Australia. I've only got two support staff overseas. I want them to check them. Check everyone. Makes my job easier. If your question numbers as good as we are.

Yeah, well, I mean, I think we've just seen so many too many builders. If you rely purely on your accountant or your bookkeeper's advice, then unfortunately there is examples where you might be getting led astray.

So no 100%. And I'm a bit of a unicorn in that aspect where I do. I'm very self aware that that does happen a lot in my industry. That's why I always say, like, there's some base principles around business and one's having your five advisors around you and picking them very specifically. One may genuinely be like for example one is my father. I have my accountant. I have some really high net worth individuals that have grown quite large businesses and I will make sure I ask every single person before I make a major decision. It should be the same with your accountant bookkeeper. If you've got them in different offices you can ask your accountant but then you should have hopefully find a bookkeeper that's just as educated and ask them too so that you can get their advice and vice versa.

Cool. Well Blake, if people want to find out more about you the nssbp.com that I you will drop that link in the Show Notes which is straight to your website or for APB members. The not so silent business partner is on our rewards directory. I'll drop a link in about the book you mentioned as well who not how by Dan Sullivan, which is a great read. But to round it out, what does it look like if a builder wants to start working with you or at least wants to just have a conversation about it? What what you guys do? What does it look like?

So I'm a very because I do do a lot of education around Australia and my core mission and our mission statement is as a company to help as many builders as humanly possible. My favorite way to get in contact with me is in the website. There's a little form that sends your phone number and email address but if you just check in, just want to have a chat or if you find my phone number somewhere and just give me a call out of the blue, I will quite literally just get if you just want to ask one single question, just ask. I will give you my honest opinion. I'm a very honest person so so that sometimes gets me in a lot of trouble, sometimes saves me from a lot of trouble. But what it is is it just means that you actually do have that person that you can call that's just not going to pull the wool over your eyes or just try to put you into something for profit. I just really just want to help as many builders as possible. So yeah the best part to do is just if you do have a if you honestly have a question out of today and you want it answered real easy and without a salesman. I'm really bad at selling. Will actually told me before this your your logo's cut off on your shirt. When I first joined the video call before you all saw that a bit of behind the scenes. But what it is is it's just some genuine advice. So if you do genuinely just have a question and want to ask it. I'll just. I'll answer your question. But yeah, phone calls the easiest for me or one of the forms through the website?

Yeah, perfect. Well, sounds good. Thanks. Blake, thanks for coming on the show today and sharing your expertise around financial tracking and how that relates specifically to the construction industry.

Awesome. Thanks, Will. I really appreciate it.

Awesome. Also, 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.