61. How To Get New Work Fast With Dennis Wong

It's actually become very dangerous for builders to become complacent. If the money's not in a bank, it's actually not a sure thing. Interest rates and inflation is what everybody is currently talking about. If you can maintain good margins, you're going to be able to do less jobs. To cover your expected overhead, you need to get sales contracts as quickly as possible. So you need to be prepared. You've got to really hit your bets. We always say that you can only scale a profitable business and one that is systemized.

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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. Joining us today is Dennis Wong, executive business coach for the association of Professional Builders. Dennis, lovely to have you back again.

Yeah, hi, Bosco. Great to see you again. It's nice to be back in front of the mic.

Yeah, it's been a while.

I can turn around for me.

Yeah, it's the second time on here. Look, I just wanted to start off by asking you a pretty quick and hard question. Why is it so important for builders to always have an eye on new work?

Well, that's a really good question, Bosco, and I'm glad you started with this one as well. There's just so much unpredictability in the building industry right now that it's actually become very dangerous for builders to become complacent because you just don't know what's around the corner that might have a negative impact on the business. So you need to be prepared and you've got to really hedge your bets. So at the apb, we have a sales process that is designed to help create more demand for a builder services than they can actually supply, so that they're always going to be in the driver's seat so that this way they can pick and choose which new work to take on and which jobs they're going to turn down.

You said some two interesting keywords here. Market change and obviously hedging bets. I've never really thought about builders. Hedging their bets. But, you know, let me ask you a different question. I guess. What is happening in the industry? You alluded to this by saying a little bit about the market right now. That should get every builder looking for new work. You know, what's happening out there? What are you seeing on the front lines?

Well, I was talking about unpredictability in the market. Now, if you look at what's been happening over the last two and a half years, I mean, we've had a pandemic. We've suffered global supply chain issues, which has been prevalent in the building industry. Builders have seen escalating construction costs, and now what we're starting to see is rapid inflation where the world economies are all on the brink of recessions. So it's a pretty, pretty scary time there right now. What I've started hearing from builders that I talk to is that work that they thought was in their sales pipeline. And often most of them will say to me, oh, I've got these contracts. They're good as gold, or they're guaranteed or they're a sure thing. What's happening is these contracts are now starting to fall over because a lot of these unpredictability uncertainty is causing a lot of anxiety in the market, and clients are getting very nervous. So prices to build are getting too expensive. Finance is starting to get more difficult to get as interest rates rise. So the professional builder. We really want to keep a full sales pipeline so that they can be prepared for these kinds of situations when good prospective jobs like sure things fall over in the last hurdle.

Yeah. There's no such thing as a sure thing by the sounds of it, especially in sales. Right. So unless the. Someone once said to me, unless the pendant, unless the signature's on paper, you really don't have a for sure thing.

Yeah. In fact, if the money's not in the bank, it's actually not a sure thing.

Fair enough. That's even more solid proof. So what are some of the trends that you're seeing with builders in the market when it comes to acquiring new clients? And I'm sure, you know, builders must be having a bit of heartburn when you're saying to them, you've done a great job, but you need to go out there and get new work fast. You know, does that create anxiety as well?

Yeah, yeah. I mean, there are certain things that really haven't changed because if you're trying to acquire some new clients, you still need to do the basics and get those things right. You still need to develop that level of trust that's going to give your clients confidence that you are the right builder for them. So that that certainly hasn't changed. So your knowledge, your experience, the expertise is still going to be there. Because if you're going to be able to build on time, delivered, on the quality and stay on budget, those things are essential. But something that's been happening more recently is that clients are increasingly getting more nervous because on the news, you know, you're seeing building companies are collapsing all over the place, both big and small. So what clients are now looking for is they need that added reassurance that you're going to be financially viable and you're going to be around long, long enough to finish off the build in x months time. 6 months, 12 months, 18 months. So builders that have a strong financial positions are going to be really well positioned for this.

Interesting. And do you think that the media is really not helping the fear? I guess the fear factor. Do you feel like consumers in general because they're around social media and the news and the TV and everything around them, it's just causing a ripple effect where people are starting to get even more conservative with their, with their funding?

Yeah, absolutely. I think definitely media has sort of, I guess focused attention in a very narrow band of builders that are, that are collapsing. And of course, you know, they hit, you know, hit the front page news and then everybody's on everybody's minds. But there's, you know, the industry is a very big industry across the world. There are lots of thousands and thousands of builders out there. So the number of builders I'm seeing out there, you know, that are collapsing is still a relatively small percentage. So a lot of builders out there still are out there trying to run, run their businesses.

Well, Dennis, let's I guess unpeel the onion and let's get into what are some of the best practices that you recommend, being an executive business coach as well. For the builders out there currently, when it comes to new acquisition, what should they be focusing on and what should they be preparing for?

That's a great question. Again, Bosco, we all know that when it comes to new work, especially if you're doing design and construct, they tend to have very long sales cycles. Typically 12 to 18 months is certainly not unheard of. So one of the best practices we teach at the APB is that you need to get your sales process as efficient as possible. And that way you can get your leads in, you can get work your opportunities and shorten the sales cycle so you can get to that Sales contract as quickly as possible. And at the apb, the sales process that we're talking about can then be customized to each builder specific situation and their their particular needs.

And how are you preparing your clients? You know, you're talking to builders every day with your role, how are you preparing them for and the industry as well. What should be builders in the industry be preparing for in the coming months? I know it's hard to predict the future, but where should they be putting their energy towards?

I think right now interest rates and inflation is what everybody is currently talking about. I mean, what we're seeing is central banks around the world, they've been hiking up interest rates in the last six months and this obviously impacts all the other areas of the economy we've seen prices of petrol and energy prices are just skyrocketing at the moment and these are going to have a flow on effects on prices of pretty much everything else, including what's in construction. So inflation is going to be with us for quite some time to come. But thankfully it does seem that the steep increases in interest rates at the moment is starting to slow down inflation. But I'm not an economist, but I think in the short term that we will start seeing a slowdown in these interest rate rises that have been happening. And I think this is already we're starting to start to see this in the US right now. I think in Australia I think we might expect a couple more interest rate increases in the short term. But then the other thing is construction costs increases are also starting to rise at a slower rate than we've seen over the last 12 to 24 months. And then the other thing is suppliers in the industry are also starting to become more confident in the supply chain, so that supplies themselves are now also becoming more predictable. So often when we are working with our clients and members, we are constantly telling them you need to start being aware of these external factors outside of your business and to really try to be as prepared as you possibly can.

So I guess the hard question is, and for the listeners out there, why should and why do builders need work fast today?

Okay, well, I think just recapping what we were saying earlier, Bosco, there's just so much uncertainty and unpredictably industry right now. So nothing is guaranteed. As we were just saying earlier, I believe that there are two groups of builders that actually need to find work fast now. The first group are builds that haven't yet established their sales and marketing systems or need more time for the existing systems to gain traction to actually work. So what these builders are probably experiencing is that they don't have a consistent flow of good quality leads and opportunities right now. And so for that reason, they haven't booked as much work as they actually would like or need and actually are desperately looking for new work because they've got bills to pay, they've got, you know, payroll, et cetera, et cetera, and they need to generate the revenue and income quickly. The second group that I'm talking about here are builders that have established sales and marketing systems. They are working, but they are suddenly find themselves in a situation. They suddenly got a vacant construction slot which is actually literally just turned up. So even if you've been fully booked out for the last, say 12 to 18 months, any of those projects could fall through at the very last minute. As we said, nothing's guaranteed. So if you want to avoid being left with an empty slot in your construction schedule, you have to be agile and you have to be prepared, be prepared to find work fast, to fill those gaps quickly if they happen. So these builders need to find work more quickly than they probably would have previously expected. So it's all about being a good, good scout. Be prepared.

So when you talk about being a good scout and being prepared as well, you just talked about potentially two tracks of clients, the ones that have the systems and the ones that don't. With your potential clients that you work with, do you find a balance between the two? Is it sort of split or do you find that you spend more time with the people that don't have the systems in per se?

It's probably a combination of both. I mean, as a, as a business executive coach, I work with clients that either looking to establish their sales and marketing processes so that, so they sort of fall into that first category. And then I also do have the opportunity to work with some builders that have been in industry a long time, some 15 to even 20 years. So they have some of the more mature developed systems. But as I said, so. So it's probably a balance between the both. But at the end of the day, as I said, nothing is certain and there are times when you just need to find work quickly.

So yeah, and look for the critics in the room that are going to say, oh, well, if you look for work really fast, potentially you're compromising to make those deliverables, you know, take shortcuts. Do you have to make any compromises as a builder to win work quicker? Do you feel like this would prompt them to, to take more shortcuts?

Well, the answer to this one is a little bit, well, it's not so straightforward. The answer to this is yes and no. If you're looking to find work quickly, and I'm going to refer to this as emergency work, then you're going to have to make some compromises. Because if your number one priority is to find work to generate revenue and income, and why do you want to need to generate revenue and income quickly? Well, it's because you've got business expenses to pay, you've got employees on the payroll, your rent is due, you have insurances, equipment, leases, and that list goes on. If there is no incoming revenue, someone has to pay to keep the doors of the business open. If the business has cash, you're going to eat into your cash reserves. If the business has low cash reserves, then the business owner has to fund the shortfall. So the faster the business can find work, the faster that you can avoid the situation. You can minimize this particular shortfall. So in terms of your compromise, if your number one priority, as I said, is to generate revenue and income, then you may have to take on projects that are sometimes outside your usual criteria. So they might be outside your geographic location. I know some builders who refuse to work more than about 10km out of where they're based. Or you might have to take on projects that are not in your niche. Sometimes you may even have to take on projects that are smaller in value, which incidentally may actually be good if you're desperate because smaller projects tend to be quicker to turn around and you actually get the work done more quickly. And you can actually get those invoices out and the cash flow in your bank more quickly. So there are some advantages there. But there is also a couple of things that you should not compromise. And the first of these things is you should never compromise your profit margin. If you can maintain good margins, you're going to be able to do less jobs to cover your expected overhead. But if you drop your margins, you're going to have to find even more quickly, which puts you in a bigger hole. You got to find more work. So never compromise on quality either because this can have a very long term detrimental impact on the reputation of your business. So that's why I say to this question, there's a couple of things that you can compromise and a couple that you cannot.

So speaking of compromising and also sort of adjusting to the demands, do you feel that builders then need to look for a different kind of client if they're looking for fast work?

Okay, good question. Now, at the APB we believe that a professional builder should know who their ideal client, or what we call an avatar, is, because that way you can target your marketing and sales to attract more of those ideal clients. But if you're desperately in need of work, you may need to compromise your avatar too. Because if your number one priority is to find work now, you may have to settle for somebody else. For example, you may be a custom home builder and you see yourself as that luxury home builder, but you may discover that there are smaller renovation projects in your local area which are available right now.

So if you can so you can.

Convert those jobs quickly and you can make good margins on them, you can then turn them over and then that will help you, obviously your, your cash flow and your overall profitability situation.

So from what you're telling me, I mean, it looks like there's an opportunity here to really, really impact the numbers. But I'm just curious, are you met with much resistance when you're speaking to your clients or you're speaking to your builders and you have to let them know that there's a potential here to look for new work faster? What type of emotions are you going through generally? Are they surprised or if they're paying attention to the numbers, they sort of understand that this needs to happen.

I think most of the builders that I've been working with certainly are not surprised. They probably already anticipating that this is the thing that needs to happen. I mean, by the time they've been working with us at APB in the private mentoring program, at least they have a pretty good understanding of the financials. So they should be able to recognize that there is the gap in their numbers and that it somehow needs to be filled very quickly. For most of them, then it's not really a surprise at all.

And Dennis, do you feel like this scenario applies for builders that are needing work because of the uncertain times, or should any builder be considering this, even. Even the ones that are doing really well or achieving their goals or have hit their levels of performance? Should every builder out there look for new work to be safe?

Well, if you remember, you know the two categories of builders that we're talking about. So if you are a builder that doesn't have a consistent flow of work, then absolutely you need to be on a look out for new work all the time. Because until you fill your pipeline and then you start develop the consistency flow, you have no choice. You have to generate work so you can generate income and that you can cover your costs and hopefully make some profit. Even that second category so for the builders that already have great systems in place, they've got their books full for the next 12 months, you need to be, as I said, prepared. You need to be agile. Because as we said, a job can fall through at any time. And I've been hearing this from clients over the last couple of months, a couple of jobs that they thought were guaranteed. They said, oh yeah, we definitely will win that job. Well, it didn't pan out. So that's why you've got to prepare to have a plan B. And I think having being ready to find new work is going to be that plan B.

So from an operational perspective and from a capacity perspective, okay, on one side we're talking about the conversation about getting new clients, but what do you need to do as a business owner or as a builder to make sure that you have the capacity to take on that new work as well? Because again, the other part of this conversation is bringing in so much work that you can't fulfill the work. Right.

Well, if we are talking about capacity and we're talking about gaps in the capacity, then I'm really working on the assumption that you already have the operational capacity to take on the work that you need. But what's happening is that you've got a gap in your capacity so that you're underutilized at the moment. So really the answer to this one is you don't need to change your operational capacity at all. Because what's happening is all we're doing is we identifying that there's a hole in your pipeline, which means that you have excess capacity right now, and we need to help you fill that hole as quickly as possible. So either the, as I said, if you don't have a constant flow of good quality leads, there are going to be holes in capacity, or that hole has suddenly sprung up unexpectedly in that ship. So really, at the end of the day is all you're doing is finding new work to fill those gaps that you already have existing capacity for.

So are there any other aspects of the business, either operationally, marketing, staffing, that you know you need to consider when you're bringing in new business?

Of course, of course. I mean, when you try to acquire new new business, it very much focused around your sales process. So your sales process needs to include your estimating. So it needs to be working well so that your pricing is accurate and it's timely and that you can get your proposals out quickly. Because remember, it's all about shortening that sales cycle so you want to get those prices out to your prospects, get them, you know, go through the documentation and have them signed as quickly as possible so you can actually start the build. Now, once you start the build, then you need to make sure that your construction team and your processes are also efficient. So this way you can gear up quickly and get started as soon as possible. And then your focus from that point on is to make sure that you complete the build in the shortest possible time and then you can move on to the next job.

Yeah, let's talk about gearing up. So, you know, it's an interesting theory because typically when you think about companies that go under or, or end up basically folding, it's mostly because they've either grown really quickly and they can't sustain themselves from a cash flow positive perspective, or they're in financial crisis because they grew too quickly. So I guess the question is, is there a balancing act? How do you grow and scale effectively, knowing that, yes, you're taking on more business, but you're also not compromising yourself long term to avoid layoffs?

Okay, well, at the apb, we have two criteria for growing and scaling a successful building company. We always say that you can only scale a profitable business and one that is systemized. So in this situation, if you're talking about new work and we're talking about emergency work, then I don't, I don't feel that growing and scaling is something that you should be talking about considering at this point in time, because your number one priority is just generating enough work to generate revenue to keep the doors open. So really, growing and scaling is not even, or shouldn't be even on the radar at this point in time. Right.

So what you're saying is, is that get the business in and then look at the next level or the next step and then how to bal that once you've hit the revenue margin.

Absolutely. So once things have stabilized, stabilized and your business is running profitably, then it's the time to start looking at systemizing and then going to the next step.

And if you're looking at your financials, you're looking at your P. Ls, then you should be able to know very quickly, I guess, how stable your business really is. And that's what you do as well, working with the clients. Right. Okay. So, okay, I understand a little bit about the stability. What suffers when you're finding work too fast? I mean, where, where are the pain points? I mean, I think, I guess everyone's going to say, every build is going to say, if it's that easy, then everyone should be doing it. But you know, what are the challenges or what are some of the things that really make builders really struggle with this?

Well, I think the builder has to focus on what is their primary goal in finding new work fast. So if it's about finding those leads and opportunities out there that is going to then lead to a good opportunity that they can then convert into contract, then their primary focus has to be on marketing and sales, nothing else. So really, everybody in the company who is potentially available should help the business and marketing and sales. So everything suffers at that point. However, once you actually have a signed contract, then it's back to business as usual. Then the focus will be back on the construction, for example, getting everything geared up and primed to be able to get on site and get the work done and then move on. So really it's a combination of what is important at different stages of that business. So initially, sales and marketing, everything should basically be put on pause until that happens. Get some work in the door first and then things will start getting back to normality again.

It sounds like it's a balancing act too as well, because at some point you're marketing and selling and then the next point it's about the deliveries and making sure that the quality of the work is there so you can get more work. Right. So it's almost like a juggling act in many ways, I believe.

So that's why I keep using that term about being agile. I think you need to be flexible and you need to adapt to the situation because things change very quickly.

So what are some of the key metrics that you pay attention to as an executive business coach when it comes to acquiring new work for builders? What are you telling your builders to look for when it comes to metrics?

Okay, well, I think this is another really good question there, Bosco, because in general, when it comes to new work, there are a couple of things that I would like to look at. And the first one is what is the gross and net margin on the job? Because that obviously impacts the financials. Then the other metric I look at is how quickly does it take to get that sales opportunity through your sales process. So in other words, what's the speed of conversion? Because if you need work quickly, you need to turn things around quickly. You need to make sure that these sales don't just sit and linger in your pipeline. You got to keep pushing, pushing and move them through and get those contracts as quickly as you can. And of course, once the construction starts, then the other focus will need to then look at how quickly does it take you to complete the construction. So ideally, you must, at minimum, complete it on time. Ideally. But if you, if there's any way that you can actually complete a job ahead of schedule, that's even a bonus because that means then you have the capacity to take on more work following that file, falling on from there.

Now, they say that success leaves clues. Would you say that it makes sense for builders to also know their avatars or customer Personas to make sure that if you're looking for new work, you know what type of client you're going after, or does that limit them when they're too selective?

I think that was a question where you asked me about compromising. Yeah, but it's a good point. I mean, we always say that if you're going to be a successful residential builder, if you can model your ideal client on your favorite clients, so the clients that you've most enjoy working with or you are most successful with, most profitable with, then naturally we want to keep attracting that style of client, and that's, that's your ideal avatar. But back to what we say. If the situation is different and your number one priority today is to find work quickly, then you're going to have to compromise because that avatar may not be readily available. It may not be the kind of jobs that will convert quickly or the style of work that's currently available in your local area. So, using the example, remember I was saying about custom builder and the renovations? Like, you might not be thinking of doing another bathroom or kitchen renovation, but if that's the only workaround at the moment, and that's what your clients are demanding, you may have to do them.

Interesting. Well, look, Dennis, I could talk to you again for hours and hours on this topic, but I'm going to throw your curveball question to end this lovely, insightful interview between us. And this question is, you've talked about pipeline, you've talked about conversion, you've talked about speed. If you had to choose, would you say that one of these, whether it was a pipeline, which is volume and more marketing activity, conversion, which is your sales systems, and time to get to conversion, which one of these would you. How would you rearrange them? Or which one takes the biggest priority first? Or am I missing something from that equation?

So if the question is back in the context of finding new work fast. Yeah. And I would say, hands down, it's time.

Okay, interesting.

The most, the most critical thing there is that you need to get your sales contracts as quickly as possible. So time is going to be the critical factor. It will be nice to have a full pipeline, but that's not going to be guaranteed that a full pipeline will end up with a signed contract in the shortest possible time. I don't think there's any question I would rate time as the number one.

See, I was trying to get you to choose between conversion and pipeline, but you decided to go with the ball straight on. Look, but you know what? That's a good answer because it sort of answers both. Time is what you need for both marketing and sales.

Yeah. And I guess time also sort of implies that you are converting them into a contract. So I sort of cheated.

Well, look, Dennis, that was. That was a lot of fun. And again, thank you so much for the insights. We love having you here. We'd love to see you back again, but until then, I wish you continued success with your amazing clients.

Well, thank you so much, Bosco. As I said, it was absolute pleasure being here today, and I hope that you and your listeners get some insights from our conversation today. Thank you.

Absolutely. We'll hear from you soon.

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