5. Five Things Every Building Company Must Have With Andy Skarda

This is Professional Builder Secrets, the number one podcast to help you grow your building company safely and securely. Brought to you by the association of Professional Builders. Join us every week as we talk to industry experts and your fellow professional builders on everything you need to know to generate more leads, more sales and higher margins while improving the building experience for your clients. Hello and welcome to the Professional Builder Secrets podcast, a podcast by the association of Professional Builders for building company owners, general managers, VPs and emerging leaders. Here we discuss all things running a professional building company from sales, processes, financials, operations and marketing. Today I'm joined by Andy Scarda, head coach and executive business coach for the association of Professional Builders. Andy, welcome. Thank you for being here. It's lovely to have you on the podcast. How are you doing today?

Good day, Bosco. I'm doing incredibly well, thank you. And thank you for having me. It's an honor to be here.

Likewise. Likewise. What compelled you to join the association of Professional Builders? Let's go back down memory lane a little bit.

I think it was a combination of factors, to be honest. If I give you the short version, it was seeing an organization whose fundamental principles and protocols lined up with my own experience in business and the culture above all else. You know, I came to realize very quickly that this is an organization that practices what it preaches. Literally everything that we teach our members to do and our private mentoring clients to do are principles and protocols that we apply ourselves on a day to day basis. So those are probably the two primary reasons, and of course I did need to eat a cake occasionally was another reason.

Now tell us a little bit about your background because I'm assuming you came from a different industry before you joined the association of Professional Builders.

Yeah, so as you can probably hear from my accent, I'm a South African born and bred, grew up in South Africa, studied law in fact, after I left school and realized very quickly that a career in commercial law was going to bore me to tears. So kind of got out of the legal world quite quickly, got into the business world and ended up as a director of a property management company by the time I was 30, doing primarily major shopping center retail mall developments all over South Africa. And essentially what that did was it got me into the mainstream of business and business leadership and management. And essentially for the the kind of 30 years after that, I traveled the world in various industries. I had five years in the United States, I had another five years in Southeast Asia working out of Singapore, and I've been in Australia now for just over a decade where I was either the owner or the leader of a business. And essentially that kind of brought me to the point that I realized there were a couple of fundamental things that applied, no matter what the industry was, that needed to be addressed. And that took me really into a process where probably in my early 50s, I had that kind of moment that I think most men have where you, you start to look at wanting to do something of significance rather than something for just pure financial gain. And I kind of had that moment in my life where I realized there were specific things in the previous 30 years that I'd love doing. And then there were also a whole bunch of things that I really hated doing. And I realized that the two things that I love loved doing was solving problems and helping people. It was too late to go into a medical career and become a specialist in that field. So I really looked at where I could apply my experience and my business knowledge. And that took me through corporate training initially was the first kind of place that I had a look at, but stumbled into coaching through the back door and realized that this was a, a far broader arena where I could actually bring all of my experience to bear. Ended up doing an executive coaching qualification. And that got me into business coaching, where I started what most coaches call a boutique coaching agency, which is a fancy word for I work for myself and I wish I had clients, but grew that to some degree to cut my teeth and obviously to get my experience. And then from there saw the opportunity at the association of Professional Builders. And the rest, as they say, is history.

Before we explore the coaching side of things. You know, it sounds like you've been in leadership roles, it sounds like you've been in leadership opportunities throughout your career span. And everybody has a different definition of what thought leadership is. So I'm just curious, what does thought leadership mean to you today, looking back on your wonderful career?

You're right. It's a term that I think gets overused to some extent in the business world. But I think the fundamental around thought leadership is you must have a level of expertise and experience. I think those two things are the critical ones that you've got to have bumped your head enough on the theories to have proved which ones work in the nitty gritty of the real world and. And which ones don't. We have some very interesting private clients in our membership group, one of whom I'm thinking of particularly, who's a highly academically qualified business person and yet has found real value in what we do, because not all of those theoretical models are applicable or executable in the real world. So I think for somebody to really talk about being a thought leader, it's going to always be in a particular field rather than generally. And from my perspective, unless they've walked the walk, I'm probably going to take a little bit of the talk with some salt until such time as I can actually prove the hypothesis.

So what does coaching, mentoring, high performance coaching mean to you in today's world? Now that you're working with business owners, builders, professional builders, you know, what does that term mean mean to you? Today more than ever before, it's really.

An opportunity to help people realize their personal and their business potential. That's it in a nutshell. At the end of the day, coaching is one of those interesting occupations where for me to be 100% successful, I have to make myself redundant in my clients world. So the most effective coach in the world is the person who you no longer need. That actually means that you've done a good job of coaching now what actually happens in the real world. And we'll probably get into the mechanics of this a little later, but the truth is, as everybody evolves, there's this transition from implementation to optimization. Now you know, if we take it into the sports world as an analogy where I think everybody can relate to this quite easily, the best athletes have a coach. People that win any form of sporting activity or motor racing, you name it, anything where performance is an element, they have a coach. And the reason for that primarily is that a coach is able to be objective because they're not emotionally involved in the situation, but they are focused on your success. So to get those two things running concurrently, an objective outsider who's focused only on you succeeding, that's really the fundamental of what mentoring and coaching should be.

So give us a snapshot of what your day to day role looks like. I'm sure Covid has changed how we all do business. And obviously you have an international variety of clients. With the association of Professional Builders having clients in New Zealand, Australia, Canada, the U.S. what does that day to day look like for someone like you coaching other builders?

It's interesting and I think just one of those small technical realities. The manner in which we work has always been online. So strangely enough, Covid from a day to day, let's call it orthopraxy, the way in which we run our business has not really made a huge difference on that front at all in our lives. We've been online since day one, basically. That doesn't mean that we only ever do online stuff. We do live events as well, and those have been curtailed by the realities of COVID But most of our instruction, most of our interaction with our clients is online in any event, so that hasn't really changed. My day is split primarily between managing our team of executive coaches around the world and then working with a select number of our individual private clients. And that really means each of them is on their own journey, each of them is at a different point in that journey. And it essentially means me being able to apply the protocols that the APB has proven to work in the context of their individual lives and their business situation. So it's essentially having this arsenal of content and training and principles available and then essentially diagnosing each client's current situation and applying the correct solution to whatever it is that they are dealing with.

Now, your role gives you some really strong insights about different industries, specifically the residential construction industry. As you're interacting with your coaches, with your fellow colleagues, with your builders, what is your insight about the current state of the residential construction industry today, post Covid era, I guess, where do you feel the construction industry has landed on?

Well, I think you've got to break that into a little bit of a geographical situation because certainly what we're seeing around the world is there are some similarities, but there are also some, some major differences. So the COVID reality in terms of the downside of things has made supply chain security really an issue because obviously factory capacity and manufacturing has been affected. That has rippled through into the distribution chains around the world being slowed down and in some cases certain countries not trading with other countries at all for periods. So that's brought a fair amount of stress into the industry in terms of builders being able to schedule their work in such a way that it follows a logical sequence. In most cases these days, builders are needing to be very, very agile and very flexible in terms of being able to build with what they have available at that time, rather than building necessarily in a linear kind of direction. Similarly, we've seen that both the pure medical impact, the health impact of COVID on subcontractors and tradesmen, and then that has been exacerbated by things like government inspired shutdowns for periods to try and deal with the disease has then made the situation even more difficult because now you have a lack of tradesmen available to carry out some of those specialist things on a building site. And really what has happened is it's brought a lot of builders to the point of going, this is all just too hard.

What are Some of those pain points, then how does that translate to builders businesses? I guess, I mean, there's so much that they're dealing with on an Internet national and a national level.

Yeah, look, it hasn't really brought with it any new pain points, but what I think it has done is it has exaggerated and exacerbated some of what was already there. If you asked me to distill that down to kind of the fundamental problem, the fundamental problem is that all of us, to some degree, but it's very, very evident in the construction industry are taught academically to be technicians. So we learn to do a certain thing. And what happens with most builders is that skill is going to be either a building type qualification, which might be a sub trade like carpentry or something like that. And essentially they reach the top level of that particular slice of the business and then find that they've inherited a business almost by mistake. And they know beautifully how to build a home. They can build a fantastic, structurally beautiful home, but nobody's taught them how to build a business. So what really we find is happening with most of the builders that we work with is that they've reached that point where they've, they've hit saturation point on their ability to grow what they've created. And where we step in then is to help them fill in those gaps in the areas that they really are just not knowledgeable about because nobody's, they haven't had the opportunity to be taught essentially. So it really comes around making sure that they have a solid pipeline of work. And that obviously comes back to the fact that you've got to have marketing as a strategy and both as an executable discipline. You've got to have a sales process that moves people from vaguely interested to actually committed to building in a reasonable space of time and in a logical sequence. And then you need to be executing those buildings in such a way that it's actually a positive experience for clients, which is one of the big problems in the industry. Unfortunately, from a PR perspective, the industry is not often viewed very positively. We at the association of Professional Builders with the emphasis on professional, deliberately are really working to try and improve the industry for both sides, make sure that builders are delivering a world class service so that clients have a great experience, but then also getting clients to understand you cannot expect to build it to provide world class service when they are functioning on the thinnest of margins. It's just not possible. It's bringing those two things together mainly.

And it sounds like you bring a Lot of financial awareness for builders as well, because that's one of the biggest struggles that they go through from what you've mentioned as well.

Yeah, absolutely. It's one of those things where I think all of us, no matter what sort of business discipline you're in, can become easily overwhelmed by the complexity of numbers. One of the things that Russ Stevens and Sky, that the founders of the APB have managed to do is to kind of demystify that overwhelm and really distill things back to. Not every number is critically important to a builder. And what we really do is focus them in on the numbers that are the important numbers only, and then help them to understand exactly what story those numbers tell them about their business. And that obviously gives them the confidence then to move into that space.

So, Andy, success leaves blueprints, as we know, and as an executive business coach, you're looking to design success for your clients. How do you personally create that transformation? How do you take them on that journey of change for them to see that success?

Well, every single client that we work with is unique and the same. As strange as that may seem, the kind of problems that builders deal with globally are very, very similar. And what that means is, you know, we can look at kind of the fundamentals of the business and very, very quickly by analyzing the important data, identify where the problems are in the business. And one of the biggest things that we do at the apb, generally, and very specifically in the advanced mentoring program, is help our clients to work out the best sequence in which to solve their problems. Most of the guys that come to us have a pretty good idea of what's wrong, but when they sit back and kind of look at the plethora of things that need to be fixed, nobody's 100% certain where to start. And then what do we do? And largely, that is what we do, is we give them a blueprint exactly as you said, dependent on their individual situation. We can then prioritize the things that need to be done, and then we can help them stay focused on what's important today. The other things are important. We'll get to them eventually. But let's make sure that the eight hours or nine hours that we have today is used as efficiently as it can be.

So one of the interesting statistics that I've read holistically about businesses is that 80% of businesses fail in the first five years. Why do you think that this is such a high number? And what's really causing failure in those first five years?

It stems primarily from that lack that I mentioned earlier, that we are trained to be technicians. We aren't given a holistic business education, and we don't know what we don't know. And essentially what that means is, as with anything, you can deal with a situation when it is relatively small and contained, but as it starts to grow, it picks up a momentum of its own and the issues that affect it become more complex and more intertwined. And you can get away with a lot of things when something is small, but particularly as that growth starts to come, that's when the cracks appear. And unfortunately, in the building industry, outside of the association of Professional Builders, there's nobody else that is primarily and specifically focused on what happens in the building industry. And it has a couple of things that are really unique, that even builders themselves who've been in it for a while, accountants who work with builders are unaware of the nuances. And because of that, things that would apply in, let's say, a manufacturing environment or a straightforward commercial environment don't apply in the building industry. And to be honest, are counterproductive. They don't work. They can often in fact, exacerbate the problem rather than solving it. And obviously, once a builder gets into a downward spiral, this is an industry that literally your business can turn around in a matter of weeks if you are not on top of the things that need to be looked after.

So one of the key things that really struck with me was the fact that you look at the data to identify a story. And this podcast is really about professional builders secrets. Anyway, so let's try to uncover a secret here. In your biography, you had a statement that said that there are five key essentials of a building business that you pay attention to. And I'm just curious to know what those essentials are and what's really behind a business. So what do you look at when you're paying attention to a business or working with a client for the first time? What are some of those essentials that every builder should be paying attention to?

Well, I mean, it's a little bit of a misnomer. I generally refer to it as the five plus one because the five need to be a cohesive unit to really function. But let's run through the five. Marketing is number one. If people are not aware of the fact that you exist, they cannot do business with you. So there's the first one. Number two is sales, and it's not sales. From the manipulative, cheesy, salesy perspective, it's really understanding that most clients are about to spend the biggest amount of money on a single item that they've ever spent in their lives, they are naturally concerned and they don't know what they're getting into. And a builder that is able to come up with a process that the client understands and that systematically helps the client to achieve what the client is looking for within the budget that they have available is going to be significantly more successful than a builder that doesn't. So marketing feeds into sales. You've then got to deliver what you've sold. So at the end of the day, that is the construction discipline. That's number three. As you are moving through that construction discipline, you need to be managing your numbers. So we now get into financial management number four. And whether you are doing it with an in house group of people or an external subcontractor group, or a combination, you're going to be working with people. And those are your human resources, which is number five. All of those, the five plus one is for those to be cohesive. One thing that a building business owner needs to be as a leader and leadership is probably the fundamental thing that we focus in on in the mentoring program. Because you can be really good in any one of those individual disciplines. But if you're not able to bring them together into a cohesive unit, your business is not going to function at the level that you want to. So those five fundamentals, marketing, sales, construction, financial management and hr, and then brought together under that overarching umbrella of leadership.

You mentioned the mentoring program. What are the differences between being a member of the association of Professional Builders, which is growing, you know, in all these different countries around the world, and what is the difference between being a member of the Advanced mentoring program for the association of Professional Builders?

Great question. The primary difference is that in the advanced mentoring program, every single person in the program has an individual executive coach allocated to them to work with them. So if I was going to draw a comparison for you, it's kind of a. Whereas the membership, we often talk about our membership area that has without doubt the most incredible resources, really, really well proven protocols that every builder can apply. There is a requirement in that space that you are self motivated, that you are the one that's got to discipline yourself to literally allocate the time to work through learning things and once you've learned them, to then implement those in your business on your own. It's a lonely road and it's often one that takes people longer because you end up going down a couple of side streets that you probably didn't need to go down. What happens in the advanced mentoring program is that you're working with a coach who understands that catalog of resources and is able to look at your individual situation and then apply the correct resource to what is going to help you most right now. So it brings those two things together. And what we find happens is that in the advanced mentoring program, because there is the accountability of a coach who is going to check that you have actually done the training and you've come up with the methodology to implement that in your business, that accountability drives up the implementation. And because the implementation has been driven up, the results are achieved. So the content is exactly the same. But the methodology generally in the mentoring program will produce results quicker and more focused than what you would find in the membership program.

And that's because builders are getting that one on one, much needed attention as well. And, and someone's holding them accountable as well to implement those things. Now let's talk about some of the problems you face when you know you're trying to resolve these problems. Challenges when it comes to coaching. I'm assuming that some of these problems are more mindset related. You know, take me through some of the common problems you're trying to resolve as an executive business coach as well.

Yeah, and you're 100% right. A lot of this is mindset and attitude. And what the coach will always try and do is to clearly separate what is being done well from what is not and what is missing. So essentially what we're looking for in every one of those disciplines that we spoke about is to make sure that the fundamentals to generate the desired outcomes are in place. If we talk about what that is, a lot of people have had bad experiences with, let's say, advertising, and therefore they've developed this mindset that advertising doesn't work. The wrong kind of advertising definitely doesn't work. But if we're able to scientifically approach the situation from understanding what a client is looking for, and therefore being able to give the client the kind of information they need to make an educated decision. And we start to advertise from that perspective, all of a sudden we start to find that advertising actually does work. So it's bringing together the technical differences or the technical principles that that client needs in order to overcome their resistance to some of the other things. We spoke earlier about numbers and financial management. A lot of people, a lot of builders in the building industry employ accountants because obviously there are statutory returns and things to be done and they tend to abdicate rather than delegate and what we need to do is to get them back to a place where they are confident enough in the numbers that matter to be able to engage positively with people like an accountant. But to do that on the basis of, I actually employ the accountant. I'm not in some way subservient or answerable to my accountant. And the only way that comes is by really educating them and then giving them the confidence to be able to step into that space. If I was to summarize this thing, it really comes back to, we will always work to make sure that a builder has enough work coming down their pipeline at different stages of their sales process so that their cash flow situation is positive. We'll then look very closely at their margins, because probably that's the area that most builders fall down. They end up competing on price. And when you compete on price, you have no option, really. The only thing you can cut is margin, and that kills growth. You cannot grow your business if you are cutting margins.

So, you know, there's a lot of risk prevention in your role. There's a lot of things that you're doing to manage this risk, because again, if it gets out of control, that's when a lot of builders start to see a lot of problems, whether it's financially, operationally, or from a human perspective as well. What are some of the risks builders need to be aware of today in this bold new frontier? Because this industry is rapidly changing with the inclusion of everything that you're doing and the association of Professional Builders, it's becoming even more and more professional as well, in many ways. What are some of those risks that builders need to be paying attention to today?

I think that one of the biggest problems we see is that builders do not understand the difference between turnover and profit. And unfortunately, in this industry, one of the biggest problems we have is that you often end up with money in your bank account that is owed to suppliers and subcontractors. And if you are not aware of things like that, you can very easily end up in a place where on a pure cash flow, bank balance basis, things look very profitable. But the reality is, if you start to take into account how much of that money is not yours, all of a sudden, things can turn around very quickly. And the problem for every single business owner, it's not unique to the building industry, but it's exacerbated in the building industry because of the realities you just mentioned. You've got to make decisions based on quality data. If you don't have quality data, you're not going to make quality decisions. I know in the early days of computer coding, there was that gigo, you know, garbage in, garbage out. That's the reality these days. So we work very, very hard to get all of our members to a place where they are measuring progress, they are setting targets, they're actually aiming at something that is measurable and then measuring their progress in actually achieving that. And that attitude of continuous, continuous improvement is the thing that's really going to help. The risks for a building industry or the building business owner are pretty much the same as any other business. You've got to make sure that your focus is on producing the work that needs to be done that enables you to invoice your clients. And you need to be doing that at a level that gives you the headroom to make the profitability you require to grow your business. That's fundamental to business, no matter what the industry is. But the reality in this industry is that because of the fact that we start a process with a client and by the time we hand over the keys to their front door, we could be 12 to 15 months down the line. It is a very, very long and relationally heavy situation. We're not selling a commodity. This is not a cap. This is not a click and my cap arrives at the front door. This is a process where we literally will be potentially for a remodeler or a renovator. You could be in somebody's home with them for six to nine months as you carry out that work. So there's a number of those sort of nuances and unique things in this industry that other industries don't need to work with.

What are some of the tools that you're offering some of your clients? I know that I've been impressed with the website, with all the different resources. What are some of the tools that you give the builders to help them manage these risks? You talked a little bit about that. Financial awareness and managing cash flow. So what are some of those tools that you get your builders to be aware of when they work with you?

It varies. Again, in our membership portal, for example, we have, I think at the moment, about 42 different training programs, if I can call them that, video based, that cover all of those five disciplines that I mentioned earlier, plus leadership. Within each of those are a number of downloadable and usable calculators and tools that help the builder to do whatever the subject matter is that is being covered. So there is that kind of double resource of, number one, we want them to understand why this is important. Number two, we want them to understand how it works. And then, number three, we want to give them some tools to help them do whatever is required quicker, better, with more accuracy. We absolutely run on the DDD principle, you know, data driven decisions. What that means is we want builders to be measuring every part of their business on an ongoing basis. So once they move into the mentoring program, we go into things a lot more strategically. We go into each of those subjects in significantly more depth. And because we're going into a lot of them now at a granular level level, we've developed a bunch of different things within the mentoring program that our members don't necessarily get access to, because at that point, they haven't decided to go to that granular level. Probably the one that stands out above all others in the mentoring program is that we've created what we call the KPI workbook, which is a key performance indicator workbook that all of our mentoring clients use that takes the data they need from each of those five disciplines and eventually summarizes it for them in a single dashboard where they can literally measure the health of their business on a daily, weekly, monthly, quarterly basis throughout their business, top to bottom. That in itself is an incredible time saver. You know, we spoke earlier about what do builders face? I think builders are probably the hardest working people on the face of the earth. I mean, some of the guys that we work with are putting in 80 to 90 to 100 hours a week because they're on site all day with a tool belt building, and then, you know, they come home, they get a quick meal and five minutes with each of their kids, and maybe a peck on the cheek from their wife, and then they're into the office to be estimating and quoting and ordering materials, et cetera, et cetera, often late into the night or very early in the morning. So, you know, helping them to manage their time more efficiently, make sure that they're focused on what's important, those are the kind of tools that we look at.

How are you preparing builders for the future? Obviously, it's changing. The industry is evolving. Covid, you know, thrown a wrench into a few things as well. So how are you preparing builders for the future in the current mentoring and coaching programs that you're offering today, primarily.

Through education, so making sure that those gaps that building and construction training leave, we are literally looking to fill up those gaps in the armory so that builders become totally prepared for the realities that they're facing them. You know, there's this horrible thing called life that we all go through on A daily basis. And what that means is we've got to be prepared for the realities of every day in this world. And that's really what we're doing. We're trying to give them the tools and the skills to understand what's happening around them and then to apply the right solutions to the problems that they faced with on a daily basis.

So I'm going to give you my final question here, and it's been a pleasure talking to you and picking your brain in different aspects. Do you feel that you are living your purpose today? And how do you leave your builders inspired? You're obviously working with builders who, you know, have to put in a lot of work. Coaching isn't easy. Coaching is about putting in the work and working and trusting with someone. So, you know, this is a two prong question. One, do you feel like you're living your purpose in life? And two, how do you leave your builders inspired when you work with them as well?

Well, question number one, I think, is. I'm assuming you're talking about me personally.

Yes.

I love what I do. If I didn't need to eat occasionally, I would do this for free because it is one of the most rewarding things that I think any human being can go through to see the aha moments. We say things sometimes that become cliche, but it is genuinely the truth. If I look back over my time at the association of Professional Builders and I think about the condition of some of the people that came into the mentoring program three years ago and where they are today, we have literally had the privilege of walking alongside them as they have changed their lives. And I'm very careful to put it that way because the truth is they do the work. Okay. So we don't take any kudos for the work that's been done at all. But it is genuinely a privilege to get up every day and to interact with people who are committed to making a difference not only for themselves, but also for their clients, which is the fundamental tenet of what we do. How do we leave builders inspired? I think, to be honest, because of the difficulty of this industry, what we do, although you and I have zeroed in a lot of the technical things, the one thing that we do give builders is hope that it doesn't. In most cases, from the time a builder comes to the APB or specifically into the mentoring program, things get progressively better. And that's really what they're looking for. At the end of the day, very few people are looking for a coach. They're looking for a solution. What we get to do is to kind of lead them to the solution that is best suited to their circumstance and then help them implement that into their lives. And what they see very quickly is that the light at the end of the tunnel is no longer an oncoming train. It's genuinely light. If they keep their heads down, their bums up, they keep doing what we're telling them to do, they will get the results that they're looking for.

Andy, it's been a pleasure chatting with you today. Any parting words for any of our builders listening in, any words of advice? You've been in the industry for quite some time. Any words of wisdom from you?

Well, the only thing that I would say to builders, I'm saying this genuinely from the heart, is if you need help, don't leave it until it's too late. One of the most frustrating things for us both at our member success coaching level and in our mentoring program coaches with our executive business coaches, is that we often have people come to us too late in the process for us to be able to help them. And that is incredibly frustrating. So, you know, I know part of what we want to do through this podcast is to educate and inspire. I really would honestly ask people, get the help you need earlier rather than later. Talk to us. Let's see whether we can work out with you where you are and put you on that trajectory to success that you deserve.

Well, that's it for today. Thank you, Andy, for joining us and for our listeners as well. Yeah, for our listeners as well. Thank you for joining us. Another episode of Professional Builder Secrets. See you in the next episode. Thank you for listening. Remember to subscribe to Professional Builder Secrets on your favorite podcast platform and leave a review to learn more about how the systems at the association association of Professional Builders can help you grow your building company, visit associationofprofessionalbuilders. Com. See you next time.