59. Preparing for 2023 With Russ, Sky & Andy

You think in terms of who is going to do this, not how do I do it?

What are our weaknesses right now? Don't be tainted by what they were. Close your eyes and just think, what do you actually want?

Don't pretend that something's good when it's not.

Revenue. That's just vanity. It's profit. That's sanity.

If you believe you can't or you believe you can, you're right.

Plan to plan.

Ploc. Plan, lead, organize and control. It's the fundamental definition of management.

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. We have another exciting episode from the Professional Builder Secrets podcast. I'm joined today by co founders sky and Russ Stevens, as well as head coach Andy Scardo for the association of Professional Builders. Sky, always lovely having you join us.

Thank you. How are you, Bosco?

I'm doing well, Russ. Thank you for joining us today as well.

How are you doing, Bosco and Andy.

Great to have you with us too.

Nice to be here, Bosco. Always happy to see your face.

Well, 2023 is around the corner and I'm already scared to ask this, but let's focus on how builders can best Pre prepare for 2023. What should they be doing?

Well, I think I'll jump in on the front end of this one. My favorite four letters. Plot, plan, lead, organize and control. It's the fundamental definition of management and obviously the planning that needs to be done is strategic planning for where builders want to be taking their businesses next year. So it's one of those things that we kind of do it on an ongoing basis with our private mentoring clients and our elite clients. They never really stop because we make sure that roundabout this time of the year. We are doing a strategic plan for the upcoming year, but that's getting reviewed throughout the year. We run business planning workshops with all of our members and people that are considering coming into the mentoring program. It's really an ongoing process, but in terms of your specific question, the one thing that must happen is it must be done before the new year starts because obviously you want to hit the new year running. You don't want to be arriving back from a vacation or a holiday and then only starting to plan because time is disappearing.

Wouldn't people be actually taking time off during the end of the year as well? You're actually recommending that they go into the planning stage before the new year starts, correct?

Absolutely. And really what that means is we've got a set of smart goals for the new year. Smart, specific, measurable, achievable, relevant and time bound. And the emphasis there needs to be on achievable. I was actually talking to a client today who was bemoaning the fact that he set up his entire year based on financial outcomes that he did not tie back to the realities of what's going on in the construction industry now. And because of that, he put himself in a place where what he wanted to do was not achievable. And obviously that's created incredible frustration for him this year. So that making sure that this is practical and real and takes into account what's going on in the industry and in the world at the moment, critically important.

I think just touching on what Andy said there about doing it before the end of the year, don't delude yourself by thinking you're going to do it over that Christmas period because this is setting yourself up for failure. We see this a lot of time, people kind of think, oh, that downtime, two, three weeks off, I'll do it then. It rarely happens. I mean, there are exceptions, but a lot of the time you're setting yourself up for failure. So yeah, make that time before the end of the year.

And I mean, let's be real, particularly with the year that most builders have had this year, they need a holiday then, you know, the last thing you need is when you in your break time, you now crunching your brain to, you know, kind of project where next year is going. Get that done, all set up, ready to go. You're going to have a wonderful Christmas break and then come back and make it happen.

So let's talk about the members at apb. When did they actually start to work on their plans? Is there a magic spot just before the holidays? When's the sweet spot? You know, if you have to look at an opportunity in time, when's the best time to actually plan for that?

Well, like Andy mentioned, they're always working on it, really. And that's because they've got a three to five year plan that they're always working on. So it's always the next 12 months is always on the radar, albeit at a high level. But I guess the first time they really start to put some meat on the bones is those members that attend our annual retreat, which occurs in June each year. That's the first time that they probably start to put some real meat on the bones for that calendar year ahead. But apart from that, generally it's in between September and November. I wouldn't be leaving it too close to the death. December, you've got that mad rush in before Christmas, all those deadlines occurring, very hard to organize trades as well and supplies. So again, you might be setting yourself up for failure by trying to do it in December, but between September and November, that's when I say most of our members create their detailed plan for that next calendar year. And by detailed plan, what I mean is breaking that year down into quarters and bearing in mind as well that quarter one is already going to be largely influenced by what has happened in quarter three and quarter four of the prior year. Because the workflow figure, which is the balance of uninvoiced contracts, that is going to give you a good insight into what your likely revenue is for quarter one. Also, the sales marketing that occurred in those final two quarters as well will have a huge bearing on contracts being signed in quarter one, quarter two. So kind of the, the closer you can finalize it, you don't have to leave it all to the last minute, but the closer you can finalize it towards the year end, the more accurate it's going to be. But yeah, there's quite a bit of.

Work that goes into this for our listeners out there. Can you break down the components in a strategic plan for us?

100%. Firstly, they're a lot more exciting than they sound. Like these are very exciting documents and plans for your entire building company. So the way we teach planning and strategic planning is first of all, forget the detail and forget all of your numbers and close your eyes and just think what do you actually want? Like design your perfect building company, what do you want? And then what, when is that? When, however it looks, how far in the future is that? And that's when we know the picture of what we're wanting. Then you start being more logical. Then you can actually think, okay, what do I want? What does that actually look like? How far away is that? And then let's just start working backwards. And that's our. That's honestly all a strategic plan actually is. Once you've done your dreaming, whether it's just you Yourself or you and your business partners, whoever strategically involved in the company. Then you just start working backwards with, you know, real numbers. That's when you actually start including your lead indicators, your lag indicators, because you need specificity. So a strategic plan isn't your, your vision board or anything like lackluster for any numbers. But you need to start with your vision and your goal so that you can put those numbers in place. The components of a strategic plan. I think Russ just mentioned it. We've got three to five years, what's going to happen in the next one year and then break it down for the next quarter. It really can be as simple as that. And then you can make it as advanced as you want to be by how much detail you get into. We teach a pretty simple structure so that you can keep it. We teach it on a one page so you can actually always print out a one page. And in your three to five years, you've got a lot of your lag indicators there. So just for everyone listening, lag indicators take a little bit more time to influence. These are things like revenue, gross profit margin, net profit margin and cash. Whereas your lead indicators, they're a little bit quicker to move. These are things like total advertising budget, the amount of leads, anything that you can actually influence quicker. And so on your three to five year plan, you're going to have what, you know, how big your building company is actually going to be, but you're also going to have about three to five key initiatives of what needs to be in place for your building company to be of that size. It's probably going to be how big your team is or how many offices you have or whatever. And then you can break it down to, okay, what's my one year goal? How am I actually going to get there? And again, you're probably going to have three to five key initiatives of, you know, what needs to happen in order to get there. And then you break it down into your quarter. And these are a lot more specific numbers because these have to be achieved in the next 90 days. We don't have three to five years to achieve them. So obviously there is work that goes into it, but it starts off really fun and by the time you get into the specifics, it's getting more and more exciting because you can see all the puzzle pieces just coming together.

How much detail is too much detail in a strategic plan?

Well, we always recommend that you stay out of the tactics. Sky mentioned some really important words there. Dream. I recommend to all of my clients that they have a glass of wine or a decent gin before they start the dreaming process. Just so that they get all of the kind of day to day humdrum out of the process. You know, it's a, it really is something that, that you want to be able to visualize clearly in your mind where you want to take your business. And then we always break kind of the things that builders need to do to get there down into three primary areas. So rocks, pebbles and sand, sand being the day to day stuff, the email and the, you know, the stuff that is going to be there, like it or not. The pebbles that support the main things that will move the needle and then the rocks are the things that are actually going to move the needle on your business. And we always like to keep strategic planning at rock stage. It's kind of left so that the pebbles and the sand can be discussed with your team to drive engagement. So what you want to be doing as the owner of the building company is to be saying, this is the outcome I'm looking for. That's at the strategic level. And then when you sit down with your team, you are not debating the outcome, but you're actually inviting them into the discussion for them to help you determine how it's going to be done using the people and the tools and the vehicles and the ender. Now we're into the tactical space. And what that does is if they're part of coming up with that process, you're going to drive a lot more engagement from them because they were part of coming up with it. You didn't tell them how to do it, they told you how they would do it.

So in many ways what you're saying is the vision is where the creative engine starts and then you basically get the team to collaborate with you to sense check those into actual executable items.

Correct. Stephen Covey talks a lot in his book, the 7 Habits of Highly Effective People about the two creations that you first. And I mean this applies to anything in the world. Somebody first had to visualize a wheel. Okay, there was a caveman, his name was Ooga booga and he was sitting looking at the saber toothed tiger that he just killed. But he was 8km away from his cave. How's he going to get 190kg of tiger home? And he sat and he thought about it and then he came up with a round thing and a stick and another round thing. And then when he could visualize it in his mind, then he knew what he needed to go and look for in order to get that saber toothed tiger home.

Wow. Is that how it happened?

That's exactly how it happens. I was there.

I think we're going to have another podcast just on story time telling from Andy, just on all the creations of things. All right, so how far ahead should builders be looking for when it comes to planning the goals?

Well, we've talked about, we've got three to five year goals in the strategic plans that we do, but what we also have in this one page plan and when we work through with our builders on Business planning workshops that Andy just mentioned, actually these are something that our best members actually do every year. There's a section for your bhag. And this is your big, hairy, audacious goal. We did not invent this. This is straight from Jim Collins. And your big hairy, audacious goal. This is, you know, not just your dream, this is your ultimate dream. And your bhag is, is supposed to scare you a little bit, not pluck a wild number out of the sky for, you know, how big you want the building company to be, what you want to sell it for, anything like that. It doesn't need to be pie in the sky, it needs to be realistic. But far enough away that you can't achieve it in a few years or five years. You know, your big hairy audacious goal could be 10 years into the future. It could be 25 years into the future. It depends how old you are really and how, like how far into the journey you actually are. But that's the furthest away you could look. But your bhag is not your entire strategic plan. Like, we're doing all the numbers for every single year in the lead up to this 25 year goal. But it's sort of, it's kind of like the North Star. That's sort of the direction, you know, just so you can keep moving forward. But what's your three to five year goal? And we say three to five because you've got to commit, by the way. It's not anywhere in the middle, honestly. And I mean, Andy, you correct me here, but we tend to just pick three years because it's a lot more. It's a lot easier for people to picture. Three years into the future is far enough away that you can achieve some massive things, but it's close enough that it's around the corner.

Yeah. And I mean, without a doubt, you don't want to go too far. And I think Covid has taught us that none of us three years ago believed we would be in the situation we have been for the last three years. So the problem, the BHAG, as Sky has mentioned, is wonderful because it is taking you further out. But when it comes to actually now starting to work out numbers and tactics and so on, three years absolutely would be kind of the, the longest horizon you'd be looking at.

I was convinced Guy was going to say 500 years in line with the Japanese.

Ah yes, There was this line. Someone said this to me, it's like, well, you know, I'm going to butcher this story now. What do you say to me? He's like, well, the, The Japanese make 500 year business plans. What's stopping us from making a five year plan? That's a very good point.

That's interesting. When you think about planning, is there a difference between forecasting and planning? I've always been curious about this.

Well, a forecast is a prediction of future events and planning that is an articulation of how a company intends to respond to that forecast. So really a business plan, it starts with the numbers, which is the forecast, but then you put meat on the bone by developing the strategies that are going to enable the business to reach and exceed that forecast. So if you're looking to grow, then think about how, what strategies are you going to need to put into place? How are you going to scale up your lead generation? Will you need more resources to service this increased revenue? In which case, what's the recruitment process? And also another good thing to look at when you're planning. Planning is the results of your SWOT analysis. So that's an analysis of your strengths, weaknesses, opportunities and threats. And what gets uncovered there drives a lot of the planning because obviously you want to cover off your weaknesses. At the same time you want to be taking advantage of the opportunities that you've identified.

And when you talk about strategies, are they the same as the tactics or are these two different things? When it comes to the strategies and.

Tactics, they're two different things. So a strategy to generate the leads that's gonna, you know, help you increase demand, which could be a strategy to I guess, increase profit margins or increase revenue. But that strategy could be obviously increase advertising on, on social media, for instance, Facebook. But then you go into the, the actual tactic tactics, that's when you're getting granular. Are you actually going to achieve that? You know, you're going to want a content marketing strategy combined with a lead generation strategy and then you know, the actual tactics of doing that, which really the tactics are going to be done by your team. Really? Yeah. This is. And this is high level planning.

That is really a great example of the putting the meat on the bone, because the strategy is the skeleton and then the meat on the bone. Using Russ's example would be who exactly in the organization, which human resource is going to do what in order to create that content or run that ad campaign? It literally becomes putting the names and the places and the tools that are going to be used and the software and the. And that.

Yeah.

Which reminds me of a great saying to keep in mind, I think, when you're going through this process, and that is who, not how. So, yeah, you think in terms of who is going to do this, not how do I do it.

Now, you talked a little bit about workshops. Obviously you work with builders on their strategic action plans as well. You also just talked about SWOT analysis as well. Is there a reason why you encourage builders to do a SWOT analysis? And take me through the process of the quarterly strategic planning.

It's kind of the first step because we always like to work on confirming where we are now. You know, if you talk, if you think about what sky said earlier, we're thinking about where you want to end up. We're thinking about your bhag. Bhag. But we need to know where we are today so that we know where we're starting that journey. And the SWOT analysis does that for us. And it sounds very corporate, but in reality, SWOT stands for strengths, weaknesses, opportunities and threats. And we always break that down into the two fundamentals. Strengths and weaknesses are internal. They are things that you can physically control because they're part of your business opportunities and threats are external. You have no control over them, but they are going to affect your business one way or the other. Now, strangely enough, what we find, and this happens a lot in our business planning workshops, which is often the first time that a coach gets to work with one of our builders, they battle with strengths. You know. Now you would think that that would be the easiest one of the lot, but funny enough, the weaknesses, when we say to a builder, tell me about your weaknesses, they can rattle those off very, very easily. But there's almost, I don't want to say it's a shyness, but it's, you know, we often. That's where we have to prompt. We literally have to say to people, you've been in business for how long? And they say, 15 years. And you say, so that means you've got. And then there's this deathly silence and the gears move and eventually they get to experience, you know, and systems and those kind of things. So it starts there. What have we got, what have we got to work with now in our favor? What's working against us now that we can control so their strengths and weaknesses. And then when we go externally, you've now got to look at what can we use to help us succeed. Our plan versus what's going to stop us achieving our plan. And it's really one of those things where what we want builders to be as honest with themselves. Don't put your head in the sand. You've literally got to, got to be really straightforward on what are we good at, what are we not good at, what do we know is going to hurt us? And in the current climate, pretty much you can look at it and go, price increases, you know, lack of availability of trades, those kind of things. Those are external threats that you can do very little about. But they could very, they could have a marked impact on your plan for the future. And therefore they must be taken into account before you get into the numbers.

You know what the trick is though? If when you sit down and do your quarter well, your strategic business plan, and we keep, we keep calling them quarterly strategic plans because this is I suppose what they're called to us at apb. But just, just to put that into context, yes, you're planning out three years, one year and then the next quarter. So you got your one year plan and you're actually reviewing it each quarter. That's why it's quarterly strategic planning. But the trick is when you kick off your quarterly strategic plan and you do the SWOT analysis that Andrew was just talking through, do not look at last quarter's SWOT because this is where it gets so interesting. You gotta always go in with zero based thinking, it's a blank canvas and ask yourself, what am I building company's strengths right now? What are our weaknesses right now? Don't be tainted by what they were because what's so interesting, always save these strategic plans that you do because in one year and even two years you'll have four and then eight of these to look back on. And it's so fascinating to see what your weaknesses were because you've turned them into strengths by now or you know, like the opportunities because you've now capitalized on them. That's so fast. Always, always save your plans. They're so interesting.

And when you think about this, it sounds like you've got to be really honest with yourself as well when you're analyzing this because it's A moment of reflection. I guess the question is, how honest do you want builders to be with their responses?

Totally, literally, don't pretend that something's good when it's not. If you can see that. Russ mentioned lead generation earlier. I don't have enough leads to get, get the sales that I need to generate the revenue and the margins that I need. Be brutally honest with yourself. No matter what else you're good at, the thing that needs to be addressed most urgently is getting in more leads. And make sure you put that on the top of your list.

There was a client who sat down in their that's like business planning session and they proceeded to say and communicate that one of their strengths was the systems and processes that they have in the company. And unfortunately, I mean, it was not a strength. You know, unfortunately, that is what they were here for. Like they needed to work on systems and processes because it was leading to unhappy clients, low margins, low team morale. But they were so adamant on putting that as a strength. It actually made the rest of the strategic plan completely worthless because you're doing it based off of rubbish information. And you have to make these plans so you can share the direction with your team. You're the leader and you then share it with your team so you can all row in the same direction. But when they start seeing that and they know that's not true, the rest of your plan's rubbish. Why would they follow it? You don't know what you're talking about.

How long should businesses be planning sessions like this and how long should it take typically to go through this process?

Well, I think a lot of it, it can depend on the prep that you put in before the actual planning session. It can be done in, in half a day with prep. But really, I guess when you add it all together, you're probably realistically committing a full day per quarter and maybe even a bit longer when you're doing the the annual and looking at the full year ahead. There's actually a business planning workshop that we run for builders online in very small groups. There's no more than four building companies attending these online planning and they go into a lot of depth, not just taking into account the numbers and what needs to be done on each individual company, but actually drilling into their marketing, messaging, the whole lot. So that in itself is a full day workshop and there's a bit more work for the guys to do beforehand and after as well. And that's something that they really need to do every year. It's not like a set and Forget these workshops aren't something you just attend once and you've ticked a box. It really is something every professional building company needs to attend every year. So there's a lot of prep that can go into these things in terms of developing some ideas. So you come to a meeting prepared. But it's mainly it's about the numbers. Because if you're tweaking and tweaking your numbers in terms of the forecast, then that can have a bit of an impact and you find yourself working down the numbers and then revising because your resources need to change in line with the revenue. So I guess to make a bit of sense of that, when we are tweaking the numbers, we always start with the end in mind, which is the net profit. It doesn't really matter about how much revenue you want to generate in the next 12 months, how much net profit you want to generate. That's what really matters. Revenue. That's just vanity. It's profit. That's sanity. And yeah, if we want to double the net profit in the next 12 months, then we've got a hard dollar figure there. So think realistically in terms of your net profit margin. What did we do last year? What can we realistically get to in the 12 months ahead? And then once we understand that, we can kind of start building out our forecast in terms of the numbers because we' we'll understand exactly what we need to do in terms of revenue to achieve that. We'll then understand what we need to have in place in terms of our fixed expenses and we can really start to build this out all the way through up into the lead indicators into. Well, how many prelims and concepts do we need to sign and how many opportunities have we got to create? How many marketing qualified leads have we got to generate? And then we know exactly how much we need to spend on advertising because yeah, we know what it costs to acquire a marketing qualified lead. So we simply times that by the number we need to generate. We've got our advertising budget. A quick slip down the forecast, check in our fixed expenses. Do we have that budgeted for? So, yeah, there's a little kind of bit of fiddling that a lot of that can, or a large part of it can certainly be done beforehand.

Sorry, just before you try and duck away, because there's a nugget, there's a gold nugget gleaming in the middle of that. That revenue is vanity. Profit is sanity. Is that what you said?

Yeah, yeah, that was taught to me.

Yeah, that's a t. Shirt. I'm sorry, maybe even a tattoo.

That's before I got my first business. I. I remember going into this wholesaler. Very successful guy he was. He used to strut around his warehouse with a big cigar coming out his mouth. And. And I remember him always going on that revenue is vanity, profit is sanity. And that's how he justified having a smaller business than one of his competitors, that he always reckoned that he had the better business.

Well, I mean, I. I worked with a client recently, the last couple of weeks, where we looked at the impact of increasing his margin versus the impact of increasing his revenue. And the bottom line was you can actually achieve double the outcome with half the work. Work. And you put the focus in the right place.

This is the fun bit the sky was talking about, I think. Yeah. Because this is fun, especially if you love numbers, doing those little what if scenarios. Let's just. Well, maybe instead of 6% net profit, how about if we could get to 6 and a half percent net, what would that do? Because what we're doing is we're dropping down the revenue that we got to achieve now. It's. Yeah, it's beyond exciting this. This time. Yeah.

And I think in, you know, if. If there's anybody out there listening to this that isn't a numbers person, you know, that's also okay, because what we're really saying is there will be somebody in your team that is, you've got a bookkeeper, you've got an accountant. If you can get to the place of knowing what you want, you can then go to part B, if you like, of your plan and then bring those specialists in to help you to get, you know, when you say to somebody, I want X out of the business, they'll be able to help you unravel the number side of that.

And I think a lot of the time we hear from some builders that they think maybe they're not good with numbers, but really they are a lot better with numbers than they realize. I mean, especially every builder is all across their estimates. They're doing some quite complex estimating there. If they can do that, they can really do this. This is quite simple by comparison, to be honest.

And I mean, we've mentioned it a couple of times. If there are members listening and you haven't yet done a business planning workshop, shop, you know, chat to your member success coach. Because we run them pretty much once a week, every week somewhere in the world. And as Russ mentioned, you know, we limit them to four builders per group maximum. And we always try and make sure that people that are similar on the same process. And literally, an executive business coach will walk you through the process step by step by step and get your first one done that way. And once you've been through it once, you know, once a year will be enough to keep the process going.

That's a good point, actually, because if you've never done one of these before, what a better way than to have an executive coach guide you through it? And if you have done them before, this is where so many builders get so much value. If you do do your planning quite regularly and you do these every year, what a better opportunity than to have a third party review it and challenge you on every one of your goals. Think bigger. Why this? Why that? Is it realistic? Is it possible? Who's going to do it? That's so valuable?

Well, and the big thing this guy is do it. Because, you know, one of the sad things we see so often is some people are really, really good at planning, you know, and they end up with that target indicator of ready, aim, aim, aim, aim, aim. They never pull the trigger, you know, so, like, doing it even once a year with a coach puts you in a place where the coach will say to you, all right, so here was last year's plan. How much of this did you get done? And that could then show you some areas that need some work.

You've reminded me of one of my favorite books. Ready, fire, aim. Forget the aim. Aim, aim. Ready, fire, aim. Because you're already running the company, you already got some plans in your head, and this is the opportunity to step back, and then you can re. Aim.

I love it.

And I've got a question here. This has been hitting my mind because you've talked a lot about, you know, aiming higher and setting, being aggressive and being competitive with your goals as well. And this is a hard question to ask, but do builders suffer with imposter syndrome? Do they have this glass ceiling typically that they have to break in your experience? Obviously, you're all surrounded by so many builders out there, but is that something that your coaches have to sort of change the mindset at the emphatic.

Yes, I think I've shared on a previous episode. If I have, forgive me, but, you know, we've just had a recent wonderful experience of a client who joined the private mentoring program. In absolute disbelief, he said, what you guys are telling me is possible is completely impossible. You've been smoking something exotic. You need to stop it. But I'm prepared to give it a go. And it took him just to prove you wrong. Yeah, just. Yeah, just to prove that it's impossible. I'll show you. You. And four months later, he literally has achieved every one of those numbers that he thought was impossible. So absolutely. There's a lot of mindset in this. I think Henry Ford said, if you believe you can't or you believe you can, you're right.

That's extremely good point because that client who said, I'm going to prove you that it can't be done, it's actually quite lucky that he achieved it because it's very difficult if you go in with the mindset that you can't do that, that. So there was that little glimmer of belief. Clearly. I love it.

And we've recently talked about the different levels, you know, in previous episodes as well, and some of the things that you incorporate through these levels. Can the levels be incorporated into the planning as well as far as aiming for the next level? Or is there a parallel mesh between the levels and then also part of the planning when your members work with your coaches?

Well, I think we mentioned in that episode the fact that the levels are designed to help a builder get to what we call professional status, in which case everything that would come up in a strategic plan will be affected by one of those levels. So absolutely it wouldn't necessarily be. Although we do have some builders that say to us in the process, I want to move from level four to level five in the next year. In which case we'll help them, you know, make that one of the rocks that I mentioned earlier, and we'll make that a particular focus to get to whatever that next category is over the 12 month period. But the beauty of those levels, Bosco let's not forget, is that they all have a practical outworking. They're either focused on making the business more efficient or making the business more profitable, which is the fundamental reason for doing a strategic plan in the first place. So it dovetails very, very nicely in terms of combining the two.

So for the builders listening out there, how can they best plan their planning sessions? Are there any best practices or golden gems as far as where to do it, it and. And how to do it?

The end of the day, it's probably one of the first things to get bumped when you're busy. Like the second, Russ said half a day to a full day. Initially, when we talked to, to builders who have never done a business plan before, you know, the color goes out of their face, they're as white as a sheet because it's Like, I can't afford to not do anything for one whole day. But we'd probably argue and challenge. You can't afford not to. Especially if you're in a situation where you think you can't afford to take a whole day off in, in quotation marks, because you're not. You're working on the company. If you think you can't afford to do that, you need it more than anyone. And that's with any kind of coaching, let's be honest. But especially to take the time out of the company to plan. And that's going to be the key. You need to put it in your calendar. You need in advance. You know, you need to. To plan for your planning session. How ironic. But put it in your calendar. Invite who else is going to be there. They need to be the important decision makers, the leaders of the company. You know, typically, let's be honest, you know, the builders listening to this podcast, it's going to be you as the owner of the company and your other half if they're running the company with you, maybe your business partner, maybe you got two business partners, but it's just going to be you guys doing this, this planning session. And the best thing you can do, if it's in your calendars, it's in there in advance, so it's blocked out. Don't squeeze in meetings in between. Before or after. Leave it so it's that whole day. Set the agenda, have a proper structure, work to a plan. This is where our members have an advantage. We've got a whole action plan that they get to move through. But probably the best tip we could give you is actually go off site. Like actually leave your offices. Like leave your premises. Do it, I'd say at home, but if you have kids there, don't do it there. Like go somewhere else. So you're not going to be interrupted or disturbed in any way. Because if you treat it as one of the most important things for your business, it will be one of the most important things for your business and your building company. So go off site. If that's just not possible, for whatever reason or excuse, we end up giving whatever room or boardroom in your offices that you do end up doing it, it put a do not disturb on there. If you do go off site, let your team know that you're away and it's a do not disturb. I shouldn't be called unless the world is burning down. You need to be that clear so that you're not fielding calls and getting interrupted. It's so important. It needs your full attention, full concentration so you can make that plan. And, and it's actually why it takes so long. So at Russ and Andy were talking about, just before you have your dream, you need to put into detail what does it take, what do you need to do? And then what Russ was mentioning before with the forecast, you're having that dance, you're going back and forth, is it realistic? Do I need to change this number? So that's why it takes some time. If you get interruptions, that concentration is breaking. It's just, it's not going to work out so well. So, yeah, plan to plan.

I've got a question about backup plans. Should we have a backup plan in this world where we're living through with so much uncertainty as well? So we've talked about how these plans can, you know, you can get budgets forecasting. A lot of these things can come from these business plans as well. But in a world of uncertainty, should we factor in the uncertainty?

Well, it's part of why SWOT is not swot. It's part of why it's got the T on the end. Because we need to take a realistic look at threats. That's a practical thing that we look at. One of the things that amazes some people when I run a SWOT analysis with them at the moment, and my prophecies are starting to come true, is I'll put low interest rates as an opportunity and a threat simply because I'm looking at the fact that if they low now, where are they going to go in the next year or three years? It's that kind of being, having a healthy awareness of the things that could stop you achieving what it is that you're planning.

I think also to chime in on that one, a professional building company is stable enough that it takes care of its own plan base. So in our episode about the professional builder levels, when we talked about that level, oh, I need to remember this now. I think it's level eight of the professional builder levels about having at least three months of your fixed expenses as working capital, but the goal is to get to 12. There's your plan B. You're taking care of yourself. It's also another reason that we have our members get booked out 12 to 18 months in advance. Like you are taken care of, of you're not running pillar to post. You don't have to be so reactive by anything that could happen.

I think it's important to plan for success, but to budget for failure. I think if you can always do your planning with that in mind. Make sure you've got the budget numbers that can deal with not actually hitting that optimism.

And not only that, I mean, as a concept, we always are conservative on revenue and heavy on expenditure. That's just a fundamental process that we apply in this sort of thing. So again, there's no rose tinted spectacles in this. This is gritty. And this kind of discussion can some people can kind of look at this and go, this is too corporate for me. No, it's not too corporate for you. It's been stolen to some degree in the corporate world. But any business that wants to be growing and prospering, this is an absolute necessity. You know, sky was talking about, it's the first thing that gets bumped. I was on a Mastermind session recently with probably 50 of our top builders and I asked them this simple question. Would you go onto one of your client sites and renovate or extend their home without a set of plans? And there was this global gasp as the air left the room, like, no, how could we? We'd never think of doing that. Well, why would you do that with your business then? Because that's essentially what you're doing every year that you want to grow. You're extending your business, aren't you? Now, if you wouldn't build a home for a client without a plan, why would you consider extending your business without a plan?

There's a great quote, isn't there? Abraham Lincoln, he's quoted as saying, if you give me six hours to chop down a tree, I'll spend the first four sharpening the answer. And I think that really is a great thing to keep in mind with business planning. That's pretty much what you're doing, is you're, you're sharpening the axe before you start an execution. Because we can all think, we're so busy and all of a sudden we think we're better off just doing the work rather than sitting down talking about it. But no, that time you spent preparing, planning, talking about it, yeah, that will come back to you in reams.

Speaking of the tools, are there any resources that our listeners can get to potentially helping customize their own planning in the future as well?

Well, tons. You know, as usual, I think you've stolen, and I heard you do this on an episode recently, and I'm going to rebuke you publicly for it. Now. You've stolen Sky's Netflix for builders, which is, which is the reality. I mean, we, we refer to our training portal as that. But there, you know, there are. There's indepth training in there and Russ regularly and constantly is putting out articles on how to do this. So you know our resource page, our website would be a good place to start. You know me, I'm the bare faced one out of the trio. I think the simplest thing is sign up for a business planning workshop, become a member, and let's walk you through the process first so we can show you how to do it properly.

Always direct these questions to Andy Bosco. He's always done for us.

All right, well, it's been a pleasure talking to you guys. As always, any final words of wisdom for our list is out there for planning.

Planning.

Just do it, Nike.

Just do it. That's exactly what I was gonna say. Just do it. Get it done.

All right, well, thank you so much for your time today and energy and as always, pleasure talking to you again. 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 of Professional Professional Builders can help you grow your building company, visit associationofprofessionalbuilders. Com. See you next time.