90. Achieving Financial Independence With Ryan Stannard

The industry, although I believe it's been good to me, has been pretty tough, you know, like I spent 10 years leaving home, you know, four or five o' clock in the morning, getting home six, seven o' clock at night, not seeing my family, not seeing my kids. And they were the years where I was making no money, you know, now I'm making tenfold and I'm having holidays whenever I want. I'm picking my kids up from school a couple of days a week, coaching my son's football team on a Wednesday night and a Saturday morning. All these things weren't possible when I wasn't making any money.

Welcome to Professional Builders Secrets, the podcast for building company owners wanting to grow safely and securely. I'm your host, Will Blunt, and today I'm joined by Ryan Stannard. Ryan's the owner of Stannard Family Homes in South Australia. Ryan, welcome to the show.

Yeah, thanks, Will. Thanks for having me.

Absolute pleasure having you on the show. This is not the first time you've. You've been on Professional Builders Secrets though, is it?

No, no, I'm a little bit of a regular regular around the apv for sure.

So no, it's great to have you on. So if anyone wants to check out Ryan's story from kind of day dot through to when he started his building company, they can check out episode 18. But today we're going to talk about something a little different. So obviously it's still through the lens of your story, Ryan, but we want to hear a little bit more about your journey through builder levels. But before we jump into that, can you just tell me a little bit about what your relationship with APB is all about?

Yeah. So I've been a member of the APB for five years. I started off in business coaching straight off the bat and moved into elite mentoring, I think after about six months. The move so quick was I just wanted to get stuff happening, so I wanted to get it happening as fast as I could and the best way to do that was to meet with my coach weekly and. Yeah. And that's elevated us to where we are today.

Yeah. Amazing. 7th May 2018, I believe you became a member.

There you go. All the way back. And I didn't know exactly when it was. I got my five year membership plaque earlier on in the year, so I knew it was five years before that. I didn't even know. So.

Yeah, that's good to know. Well, there's a lot that's happened. You recently became actually a certified professional builder by reaching level 10 of APB's builder levels. Now for anyone that doesn't understand what that means, can you tell me what your, in your own words, what the builder levels are?

So for anyone looking in and anyone that's just joined the APB or thinking about joining the apb, if they look at the levels of the apb, they would probably look at them and think geez, that is absolutely impossible. But it's truly not. I'm proof of that. So I just started working through modules and working through modules then never really took much notice of the levels until I'd been working through module after module for about four years and realized I was still only at level four, which was last year when I went to the retreat in Hamilton Island. I realized I was on level four and at that point I realized the steps to get me to level 10. I'd already started a lot of the steps but hadn't finalized them. So the company manual was already part done, the sales manual was all pretty much done which were, which are key parts of, of the, of the levels. But, but the big big ticks tickets were trying to get the gross profit above 25% and the net profit above 10%. That was, they were the big kickers. So going through Covid times, every build has been smashed to the wall. So I set myself a goal coming out of Hamilton island that when we got to Hawaii this year I wanted to be level 10. So. And it's been a huge credit to my team that we've worked so hard in that past 12 months to get everything in tip top shape. So it could be, so it could all my manual, my systems manual and procedure. So that's my company manual and my sales manual could get get vetted by Andy Scarter, the head coach. So that was a daunting thing in itself sending that over to him to have a look at. So yeah. But the professional builder levels from the outset, you look at them and you think there's no way that that's actually possible. So. And I don't. I think I. Well, I know I'm actually the first person to ever reach it, so it actually is possible.

So it's a huge achievement and the speed in which you kind of accelerated towards that over the last 12 months is pretty impressive. Just just to clarify, for everyone that's greater than 10% net profit and over a 500k salary, is that the tier for level 10 of the builder levels? So yeah, congratulations man, that's a huge achievement.

No worries. Well, thank you.

Yeah. So I guess how long did it take? I mean, you mentioned that you're at level four the start of last year, so pretty much 12 months from four all the way through to the end.

Yeah. So I think the first four levels, the first couple of levels are just working through the things that you need to work through with your coach to get there and then it starts to get into the nitty gritty. So working through these levels, you'll probably be doing a lot of the stuff in, in the higher levels, like I can't remember the exact levels off the top of my head, but the, the higher levels like your company manual and your sales manual, you'll be working on these for years. Like they are not something that can be just done. And we decide, all right, we're going to create a company manual and you'll have it done within a year. You may have a company manual within a year, but it'll take you four or five years to complete it to the stage where you could hand that manual to somebody else and you could step out the door and they could run your company. So there's a lot that goes on that's not actually progressing you in levels over the years.

Yeah. Level seven and level eight are the sales manual and the company manual. So that's kind of right towards the pointy end, I guess. Just as a holistic concept though, what was the real driver behind you wanting to even get to level 10? I mean, it might just sound like a vanity thing to someone that doesn't quite understand what the achievement is.

So if you listen to Russ, Russ reckons that Getting to level 10 is like having a AAA credit rating in this industry. And, but I want to get to level. I wanted to get to level 10 myself, which I think we may go into a little bit further in the, in the podcast. But I wanted to get to level 10 myself because I, my, my daughter is planning on taking over my role in this company and I'm planning on setting up another company of the same size somewhere else in Australia, somewhere I know nothing about. So the only way that I can be, feel comfortable that my 19 year old daughter could step into this company and run it is if I'm at level 10. So otherwise I would be freaking out all the time that she's going to go through what I've gone through over the years of running a, running this business, which has been a lot of hard work. So that was, that was a lot of the driving factor and bringing family into, into a business, you don't want to bring them into a burden. You want to bring them into something that's profitable, something that's systemized, something that they can actually run. So. And then maybe I've got three other kids, maybe they might even follow in and want to be involved in the business as well. Who knows?

Yeah. Interesting. So how long's your daughter's name's Erin, right?

Yes, Erin.

How long she'd been working in the business for? She's only 19. She's pretty fresh and young.

Yeah. So it's an interesting story, really. She. She was doing year 12 at, you know, year 12 at high school, and we're trying to work out her career path and where she wanted to go. And we sat her down. I said, shoot for the stars, Aaron. You tell me what you want to. What you want to do, and I'll try and create a path to get there. And she actually said to me right then at the table, you know, I want your job. And I was a bit thrown back by this at the time, but I was. I said, look, that's probably the easiest thing that I could get. You know, I can't. You know, that's the easiest thing that I can do. So then after that was probably a huge drive for me to hit this level 10 mark, because without that. Without that level 10 accreditation, I wouldn't have been comfortable to welcome her into. Into something that I didn't know was going to succeed. So.

Yeah, that's a fair point. But it's interesting because it kind of really gives you that. That purpose right around doing all the stuff that you do for the business.

Yeah. And to be honest with you, being in business is a really lonely place. And the years of being in business before I joined the apb, I was running a pretty shitty building company. I was running a building company that wasn't making any money. Over the five years before I joined apb, I watched my. Watch my mortgage on my house actually grow because I was building houses and wasn't making any money. I was actually probably putting money into people's houses on some stages because I didn't know my numbers. But it comes down to, you don't know what you don't know. And I didn't know when I started with the apb, I think I was marking up my jobs by like 15%. Might have even been 10%, but 10 to 15% now with all the marketing and stuff that we do along the way, we're marking up our jobs by 35% plus, plus contingencies, plus we're allowing for inflation now as well. So it's all these things that you don't know. And the building company that I was running, that was marking up by 10 or 15%. My fixed expenses are more than 10 to 15%, so I was actually making nothing.

So, I mean, what was it that you felt at the time like, made you only mark up your jobs 10 to 15%?

Oh, because I thought that was. That was how much I could mark up the jobs for. And you look at, you say, you look at, you know, 500 grand and you mark it up by, you know, 10%. There's 50 grand. That should be enough. It was only, you know, the company was a lot smaller back then, and you think, oh, yeah, back then I had on site staff as well, so I thought I was making money on them as well, but as it turned out, I was actually on a downward spiral.

So, yeah, that's an interesting, Interesting kind of revelation, I guess, for you. So you only really figured that out once you. Once you started to dig into the numbers at some point?

Yeah, yeah, definitely. And I'd worked with business coaches before I joined the apb, and the business coaches were. They were advising me that this was a good thing that I was doing, marking up by 10 to 15%. And until I joined the APB, I realized that that was definitely not. But it goes into. And we could probably chat about these sort of topics all day, but it goes into the. Into the WIPA calculator and understanding your numbers and knowing what your numbers are so that you can make real financial decisions knowing where they are.

So, yeah, I'm just. WIPA is actually enough. Enough cash to cover. WIPA is actually level two of the builder levels, funnily enough. So, yeah, just for anyone that doesn't know what's. What's the WIPA acronym stand for?

Work in Progress Calculator. So, yeah, so, and it's been interesting over the last. Over the COVID time. So the WIPA calculator generally means that when we are getting paid progress payments, we are holding a fair chunk of the customer's money at points through the build that we need to manage our. Our cash flow that's not ours. So that that figure used to be a lot higher before COVID when we could build houses a lot faster. That figures actually came down a fair bit through Covid because the, because we got material sitting around on jobs while we're waiting for labor to try and get it done with this labor shortage that we're in at the moment. So, yeah, knowing these numbers is Massive in progression.

So getting back to the builder levels, what level do you feel like had the biggest impact on your business?

Good question. There's been a lot of progression over the years. So at the, at the very outset it was understanding wipa which is the work in progress calculator because before, before I calculated wipa I was paying tax on money that wasn't mine. So you have a huge tax bill and you actually had no money in the business because it was account. It's an accounting thing. So to start and understand WIPA right at the outset and to be honest with you, I butted heads with Russ a bit on WIPA because understand it. But then Russ was quickly, he was. I know Russ well enough now to know that Russ is always right. You know, if he believes something you just got to go along with it. Whereas in the early days I used to butt heads with him and try to prove him wrong. But yeah, once he was right for sure. So then I work worked through that and that that process of introducing wiper into the business was great. And then we knew we're only paying tax on the money that we're actually earning then, then moving through the levels. So WIPA was huge. But I think now the biggest thing is going to be the next 12 months of having a fully vetted sales manual, fully vetted company manual that now we can live by. So now that that manual, I'd hate to think how many hours has been put into creating that manual. And to be honest with you, we created the manual, the company manual twice because we in the in we'd created it over the years and had it right. And then I changed from co construct to build a trend which is our, which are our softwares that we use to run our jobs. So most people would be aware with that. So we were running co construct for years and then I changed to build a trend about 18 months ago and at the same time I changed from MYOP to zero. So anyone that's ever done a company manual understand that that means that every single process that you've written in the company manual then needs to be rewritten over again to suit the different softwares we're using. So then we had to go back and rewrite this whole manual over again to get it to where it needed to be. So the implementation of that, now everybody in the business has a clear path of what their role is and exactly how to do it. And then if someone goes away on holidays or is sick for some reason, somebody else in the business can step in and read this manual and do exactly what that person does. But also the power of this manual will be that when Erin, who will be 20 to 21 when she takes over my job in the building company and by then it'll be a 15 to 20 million dollars building company, it'll be being run and managed by 20 year old so that doesn't happen by accident. So the amount of work that goes in behind the scenes to create this manual that then she can live behind. So the decisions that she'll be making in the company and the respect that she'll need to earn from the staff in our company and the clients as well will come from living by that manual. So if anyone's unhappy with anything that she does then it's not her fault, it's the company's fault or my fault. Because I've approved basically I've approved the manual to be what it is. I haven't written it all myself, I've had all different staff write their portions of the manual but I've approved that. This is how we do things at Stanard family homes. So that will be without a doubt will be the biggest, biggest thing that we've done for sure and it'll have the biggest impact because that means that 15 to 20 million dollar company I'm running here in Adelaide. I could literally get the map of Australia up, get a dart and throw it at it. Wherever that dart lands I could take this business and set up exactly the same company within 12 months.

So do you have an idea on where you're going next with that once Aaron takes over?

I do have a bit of an idea but we'll keep that for another episode. Most people that, most people that know me well know where it's going. But yeah, so we'll leave that one for now.

I reveal it to the world just yet.

Yeah, yeah, that's right. Yeah. I don't want to builders in that part of the world freaking out.

Yeah, no, fair enough. I mean it sounds like you've, you almost need those fundamentals of the financial side of things, the whipper side of things to be able to progress through to these, the manuals that you're talking about which set you up for further kind of the future.

Yeah. And you're exactly right. So the financial numbers are not something that can, they're not something that can be focused on too much because the financial numbers become a formality of good systems and processes. So if your systems and processes are right and you focus on them, the old saying is if you start a business to make money, you'll probably go broke. Whereas if you start a business because you love doing what you're doing, you'll make money, you know, and that's the same thing. So if you're, if you're focusing 100% on the dollars and cents and the profits of the company, you're never going to get anywhere. So if you focus on your systems and processes that are going to make you the most professional builder in your area, the money will come along with it, you know, and it may take a few years for it to come, but I'll guarantee you it will come.

It must be hard though, I guess when you're in the heat of the moment and you're just trying to run a building business because money's important, right?

Yeah, yeah, yeah, yeah, yeah. And cash is king, you know, trying to get money into the company. But the harder you try to get money into the company, the less money you'll get. I'll nearly guarantee you of that because you'll make too many wrong mistakes. Whereas creating the processes, the systems and processes that can be clearly followed by everyone, it creates the company to run smoothly.

I feel like, as well, like you've just caught this fire based on having this long term vision of handing over the company to your daughter as well. Like, it's almost like that is like a key driving force like that people would need to find to be able to be super motivated to take those progressions.

And it's having Aaron back into the building or having Aaron in the building company, which. This has only been 18 months she's been here, she started last January, she's only been here 18 months, only been probably two years that the progression of her coming into the company was actually going to happen. So that hasn't been something that's been around forever. So at the time before that my visions for the business were completely different because I actually had fallen out of love with building. I'd actually, I'd done it that hard for that many years. So I left school when I was 14 years old. I finished school halfway through year eight. I got, I got sort of asked to move on from school, but that's another story. And my dad was a builder, so I'm going into a bit of my story. But my dad was a builder and I got my first, I got my last day of school. My first day of work was the same day. And from that day on I've been building houses. So, but building it the hard way. So the, the industry, although I Believe it's been good to me has been pretty tough, you know, like I spent 10 years leaving home, you know, four or five o' clock in the morning, getting home, six, seven o' clock at night, not seeing my family, not seeing my kids. And they were the years where I was making no money, you know, now I'm making tenfold and I'm having holidays whenever I want. I'm picking my kids up from school a couple of days a week, coaching my son's football team on a Wednesday night and a Saturday morning. All these things weren't possible when I wasn't making any money. Yeah. So the then that's why I'd fallen out of love with building. It was just I didn't know how to get out at the time. A building company is not something that you can just shut the doors and walk away on. It follows you like a bad smell if you. Yeah. If you try to leave it. So that in itself. And falling out of love with building, when I joined the APB was like, was literally the final straw for me and my building company. And that's probably why I went in head first and made it happen.

So yeah, it's interesting because like, I mean, most people the instinct would be you work harder then you're going to be more successful. But what you're saying is, is not the case.

No, no, you were. If you work harder on, if you. Well, I'm not saying that you've got to work smarter, not harder. So. Yeah, so like when I first joined the apb, and I think Russ has brushed on this a few times, is, you know, when you, when you join the apb, you join the APB because you need to get your systems and processes in your business. Generally, every person that joins the APB is time poor. So how are you going to find time to work on your business when you've got no time? So I was having this conversation with Russ just last week that when, when you join the APB, the first couple of years or the first six months, really six to 12 months is going to be the hardest grind of your life because you're going to see the opportunities are there. You'll see podcasts like this with me talking about how I've done it and understand how it's possible. But that first six months, you're going to be looking at that portal and going, how the hell am I going to get through this? How am I going to do this? I haven't got enough time to do what I've got to do. Now let alone get, get through these modules. So what I did when I did it is I started going to work at like 2, 3 o' clock in the morning. So I'd go to work 2 or 3 o' clock in the morning, 2, 3 days a week and I just smash out modules early in the morning. Everyone else would roll into work at like 7 o'. Clock. I'd done half a day's work and I did that for about six to nine months until I build up the cash reserves in the business to be able to employ the next person and then the next person would come along and then I would, maybe I had to go to work at 3 o' clock in the morning one day a week and then that changed itself until I had all the, all the staff that I needed and then I could peel completely out of the day to day operations of the business and work on the business completely. So yeah, because these days in Stanard family homes I literally have, I work in the business two days a week and I work on the business three days a week or that's if I'm even here because I go away a fair bit on those days, you know, spending time with family and whatever else. So in those two days I run all my staff meetings and make sure the business is running. So yeah, it's a, it's a different side of things these days.

What's, what kind of hours are you working now?

I generally work, I mean generally in the office, seven o' clock every morning. But I leave the office generally by about 3, 330 most days. And anyone that knows me well knows that I'm a, I'm an avid water skier, barefoot water skier. So in the summer months you won't, if you, if you can't find me around the office, I'll be up the river and it could be Monday, could be Tuesday, could be Friday, could be whenever, whenever I can find someone to drive the boat. I'm up there skiing. So yeah, so things have changed a bit over the years.

Yeah. Getting up at 2 or 3 in the morning sounds pretty daunting, I imagine to most people. Did you feel like at any point you were getting burnt out from all of that extra work?

No, not really, no. It was just. I had a vision, I knew that I had to do it otherwise it wasn't going to work. Hard work was something I've never ever been afraid of. But yeah, it just, I knew it had to be done. And when you, when you set your mind to something, because the alternative of me not Doing that was the company going into liquidation, me losing my house and losing everything that I've ever worked for. Nothing to tell the kids that they can't go to the school they go to anymore. That was literally the alternative. And I'm sure there's probably people out there watching this that could resonate with that. And that was me six years ago.

Yeah. The house. The house was somewhat burning, I guess, and you needed to make a choice. One. One way or the other.

Yeah, that's it. Yeah. Yeah, yeah. So, yeah.

Not sure it's the best metaphor for a builder's podcast, but never mind.

Yeah, There you go.

So what. What was the hardest thing then to. In your progression through the levels, all the way from the initial WIPA calculation through to where you. Where you are now? What was the biggest challenge you had?

What was the biggest challenge that I had? The biggest challenge that every person has is staff. Every company, it doesn't matter whether it's a building company or whatever it is, is staff and finding the right staff. So probably the. The. Probably one of the biggest challenges that every business owner will have is. Yeah, getting the. Getting the right staff and building the right culture in your company to get people to understand that, you know, we're not just here to make money, we're here to make a difference and. Yeah. Make a difference in people's lives by building houses for them. So, yeah, that's. Yeah, that's probably the biggest challenge. Yeah. Because if you could just cherry pick the right staff and put them into where they were with the right. Is the right fit for you, life would be easy. But that takes years to do that. Yeah.

I mean, I like what you said before around, like, it's like you were growing safely by just, you know, get enough cash reserves, hire someone. Cash reserves, hire someone, that kind of thing. That approach seems to be a safe way to do it.

Yeah, yeah, it's a good way to do it in the early bit, but as you get bigger, so the transformation from about 4 million to $6 million company is. Is that's exactly the motto you need to be. You need to get your turnover to where it is. You need to make the money, make enough money to employ the next person and make it work. Once you get to. Once you get to 6 million, 6 million to 10 million. The amount of staff that you need to run that $6 million company is the same amount of staff that you need to run a 10 to $12 million company. So in that. In that regard, you've got to. You've got to see it. And that's so the net profit and gross profit things of the company. I've been close on the 25 gross profit for about the last four years, the last three years, literally hovering around 23, 24, 24.9. I was at one stage, in the end he wouldn't even give it to me. So hovering around that, hovering around that stage for a long time. And that's because I was holding margin on my jobs. But for the amount of staff that I needed to run the company, I had to sacrifice net like net profit for, to keep the company running to get it to grow. So then I needed to get more turnover into the company so that I could pay the staff that I needed to make the company run. And it's been not until I've got to 10 million that now the amount of staff that I've got at 10 million, I like one or two people more than what I needed to run at 6 million. And now the company's running smoothly and making money. Yeah. So it's a, it's, it's understanding and knowing your numbers. So sometimes you've got to sacrifice net profit growth. Yeah, net profit. And keep your gross profit to keep the company growing. So it's, this is where having having a coach and working with your coach really makes you, really makes you understand exactly where you're headed. And my coach is Andy, obviously. And I've had, and right from the get go. And he's been a pivotal part in this. So he's been like my shoulder to cry on my rock to yell at my. Yeah, everything the whole way along. So. Yeah, but it is, it's interesting times and, and, and, and going into the knowing your numbers side of things, like, we, we had to go through a bit just last year where I, I was, I was holding gross margin on jobs, but no net margin, no net profit or net profit was down. Because as a building company owner, I've always focused on holding margin on my jobs. Every single job. Nah, that guy's gonna be charging us too much. We can't pay him that. We can't do this. But through Covid, it's been a completely different beast. So if you, if you don't, if you haven't rode with the times and paid people what they needed to get paid to keep the jobs going, the jobs sit. And then when the job sit, that erodes, that erodes the net profit. So you can hold gross profit on jobs, but it erodes the net profit of the company. So we had had to sacrifice gross profit by paying trades more money to get the job done, but then we could get it done faster, which actually gave us more net profit. So that might be a bit confusing for some people, but yeah, it was literally what we had to do. So it was knowing the numbers, it.

Sounds like you're always making trade offs depending on what stage of business you're at.

Right.

Like you mentioned, from 6 to 12 million, you're in a growth phase, so you kind of need to sacrifice net profit in that phase compared to where you base. You're probably moving up and down the levels a little bit. But that's just the way of running a business.

Yeah, that's it. And, and there's all these builders going insolvent at the moment and. Yeah, and you hear on the news or look on Facebook or all the rest of it that these builders are crooks and they're doing this. Anyone that steps into the, into the game and runs a building company is the most courageous person that you'd ever find. Because where we are, the most volatile industry, it goes up and down. You know, there's labor shortages. You know, every single thing that happens with government impacts how we run our businesses. And these builders that are going broke, they're not crooks. They've just been caught up in the wrong, wrong thing and they haven't, haven't been running their business quite how it should be. But there's a, maybe a lot of businesses out there and a lot of industries that are not running their businesses quite how they should. But they get away with it because they're not exposed to the markets as much as we are. So. Yeah, so every, every builder, I believe we're the most courageous people in the world. So.

Yeah, well, I mean, it's a high kind of cost business, isn't it? There's lots of, like, there's lots of cash coming in, but there's obviously lots of cash going out as well.

Yeah, yeah, and that's exactly right. You look, you look in a lot of other businesses that, you know, they might have a 2 or 3 million dollar company, you know, and make twice as much money as what we do. Because the money that they get to hold is so much more than us. We deal with millions of dollars. It's millions of dollars passes through our bank accounts yearly, weekly, and only a small margin of that is ours. So unless you know your numbers, unless you can understand that, you're doomed basically because you'll spend money that's not yours and it's easy to do that when you're in a growing phase because you think you're making money, there's money in the bank, but the money's not yours. And that's where the WIPA calculator comes in. Really important.

I'm intrigued to jump back a second and hear a bit more about your journey from like 10, 15% margin all the way to 35%. Was that just like a big hop or did it take some time? And do you ever get pushback from clients about the margin you're marking up your projects?

Well, the clients don't know what margin we mark up the projects by. It's just an overall cost of doing business. So, yeah, so they just know what the cost of their house is. So we don't actually get a pushback on that at all. We'll get a pushback that our price is higher than everyone else. But in the first general conversation with a client is we'll tell them that we're probably going to be the most expensive builder that they're talking to. And we're booked out for 18 months. So in that process, scarcity and urgency. Well, why are they booked out for 18 months? They must be good if they're the most expensive. So then you get people getting trust. But that doesn't happen by accident. So, yeah, this is, this is a really interesting topic. And it's when, when I first started working with the apb, I never did any marketing and there's so many builders out there. And once again, I was chatting to us about this just last week. You know how many builders won't spend money on marketing now because they're busy? So through the, through the COVID times and through the booms that we'd had, I was in constant, constant conversation with my marketing team and we were spending more money and more money and more money on marketing all the way through that boom when nobody else was spending money on marketing. And the reason why I was doing that was one, because I had the money to spend. But also I knew that if I spent the money on marketing, I would be able to get the best quality leads out there. So I would be able to get myself in front of the best people looking to build that we would be able to disqualify so hard the people that we don't want to build for or. And they may be marginal sometimes, but we're picking the cream of the crop. So we're like, my company now is 10 to 15 million and we're spending about $250,000 a year on marketing alone, and that's the ad spend on marketing and about another hundred thousand dollars a year on content creation. So that's a lot of money for a lot of people to spend on marketing. But when you, if you, if you don't have that sort of marketing, you can't drive up your margin because you, you're waiting for someone to walk in the door and sign up with you. So that's the referral business and that's what I ran before I come in. So you'd have. It'd be boom or bus. So you'd have heaps of people come in wanting to build at one stage and then you'd have none when you. At other stages. So the advertising now gives it a consistency, but also you're getting in front of a whole lot. Whole different range of people than what you ever were before. So, yeah, it's all in the marketing. Yeah. You. Any builder that's not spending money on marketing is leaving so much money on the table. So you might look at it that I don't need to spend that much money. Spending that money will bring you back money tenfold, I'll guarantee you. Yeah. Then that proof's in the pudding, is what we've done with it for sure.

How long does it take you to get to that point? I mean, that is a significant budget. Right. For marketing, which I imagine most builders aren't dedicating to it.

Yeah, it. Start it off smaller, obviously, and then you build up to it as you get more money into the company and understand how it works. So you sit with your coach or people that have got coaches will sit with their coach and their coach will tell them, you know, that you should be able to look at your marketing numbers and you should know by looking down your sales funnel, where it is all the time, and know the numbers and parameters of where. Where that. Where things need to sit so that you can grow safely and securely. The only way you can do that is with, with spending money on marketing. And, and I know that say if I look at my, look at my Funnel and my PSAs or preliminary services agreement, preliminary building agreements, whatever you want to call it, that's, that's what we use for the next step to get into contract. I know that if they're dropping below 10, I'm starting to get into strife. So I need to hold 10 preliminary service agreements all the time, which is we're only building 24 houses a year here at Stannard Family Homes, so that's more than a half a year's. Work I'm holding in front in the design phase. But I know that if that's not where it is. Right. I've got the next six months before I run out of PSAs before I can do it. So if they drop below 10, I know that if I put another $10,000 into my marketing for that quarter, that'll bring me in enough, more than enough leads to fill that funnel back up again every single time. Yeah. In. And it, and it's been proven in, in nearly every market. So.

Yeah. I mean and what I'm hearing you say as well is like there's no point in just spending money on marketing. You need to have your systems tied as well to start with before you can even think about it.

Yeah. And that's the biggest problem with marketing is it's such a broad, such a broad area. But what you need to do is do the action plans on marketing. So the biggest thing that you need to do when you're running a building company in any company for that matter is you don't need to know how to do everything yourself, but you need to know how to manage it yourself. So even like marketing, you need to know what to look for, the numbers you need to look for so that you're not just not getting ripped off. Yeah. Because you can throw money into marketing. You go to a marketing agency and they'll say give us 50 grand. It's going to be a six month process. You'll start to see stuff at the six month. But we've all heard it and yeah, we've all put money into it. Yeah. And then you get six months down the track. You spent 50 grand and you got nothing. Yeah. And that's literally how marketing works. And everyone's freaked out by it because there's so many shonky marketing agencies out there.

Well, they just get you a bunch of leads. But to your point like if you don't have the back end systems to qualify those leads and get yourself in front of the right type of client or prospects, then it's, it's pointless spending the money on.

Yeah. And exactly right. So with your marketing strategy needs to become your, your sales process need to meet together so that your qualifying process into there so you're not wasting any, wasting any of anyone's time. So our sales guys are only talking to people that have got sufficient budget. They've, they know the type of house they're going to build, they've got land to build on. We're only, there's all these parameters if they don't fit into our pigeonhole. Yeah, we're not going to talk to them. So.

Yeah, that's cool. There's a, there's a famous marketing quote. The business that can spend the most to acquire a customer wins. And I think that resonates with what you've said there.

Yeah, exactly. Right? Yeah, yeah, yeah, that's right. Like we spent thousands on it. On leads. Like thousands on every lead. Like if you think I'm spending $250,000 a year on, on ad spend plus a hundred thousand dollars on marketing, creating content, and I need 24 jobs a year. You don't have to be Einstein to realize how much it's costing me in marketing for every single person that we build a house for. But, but we're making that up with margin. So every single time.

I'm sure we could. I'm a bit of a marketing geek, so I feel like we could probably talk about those numbers for a couple hours, but.

Yeah, yeah, yeah, yeah.

You got a building company to run, so maybe we don't go down that rabbit hole.

Yeah, yeah, yeah. Go and have a look at my HubSpot.

Yeah, I'm interested. Just to get a bit more of an overview of your succession plan with Erin. So you mentioned she's 19 at the moment. You've got a couple of years potentially to hand over the business. What does the next couple of years look like? What are the objectives you set out?

Yeah, and this is interesting one. I've got a strap plan with Andy on Tuesday and we're going to map out the next two years. So me and Aaron are going to sit with Andy in that STR plan and we're gonna map out the next two years. So for people that don't know that the strategy sessions are a part of the leap mentoring, we do them every, every three months to create your plan moving forward. So we'll be going through all of that, but, so I'll have a clearer vision on that once I speak to the master, Andy Scarter. But in my head it's, it's getting Aaron to the stage. So Aaron, now she runs all of the customer selections in the company. So she started knowing nothing about building at all 18 months ago. Now she runs that whole department and that's been done by the systems that we created in that department. She was able to follow along with it and edit it. So now the biggest, the, the biggest thing we need to do to get her running the company is get her out of the day to day operations of the Selections. So, so what we need to do is create a plan for that to happen, which is also a little bit more complicated than would seem because at the moment you probably see I'm sitting in our, in our selection center where we do our selections in four weeks, four to six weeks time. We're moving into a brand new purpose built complex for Stannard Family Homes which will have a whole new selection center, all new offices. It's about a two and a half million dollar building that we've put there. So it's a, it's a pretty impressive space for us. So she's got a, she's got to set that up so that it works for the new selections as well as trying to handball that over to someone else. So that's going to come with a lot of challenges in itself. But we need to get her out of the day to day operations of that so that then she can work through that, the company manual, and make sure that she understands that company manual word for word because she's going to have to. That's going to be her bible for running this company. That's what's going to give her the trust and credibility from every person that she speaks to. So the thing about having such a young manager is that young manager needs to be so confident on what she's talking about or he or her is talking about. And if they speak with such confidence and conviction about the stuff that they know, no one will ever be game to doubt them. Yeah. And that's the biggest challenge. So that's why we've got a company manual. Right. Enough that's been vetted by Andy Scarter to say, right. They're a level 10 builder. Andy tells me that that manual is about 90 to 95% perfect. I don't believe it is 90 to 95% perfect. I believe it's probably 75% perfect. And over the next year we're going to get it to 100%. So yeah, that's, that's the, that's the progression. So that's, that's how important that document is to everybody here.

Well, I guess that's a sign as well. Like you've got high standards. Right. And that's a big part of, you know, being so why you've been so successful, I imagine.

Yeah, I guess. Yeah, I guess so. Yeah. And it's one of those things like I'm not diagnosed, but I'm pretty sure I've got dyslexia. So I get bored with things once I get something that works and get it, get it right. I, Yeah, I get bored with it. I move on to the next thing pretty quickly. Whereas a lot of people would be happy to get their company to do XYZ and roll with it. Whereas once I get it there, I want to jump to the next step. I want to change something, I want to move something, I want to get new software, I want to do this. It's like I've got ants in my pants. And I think the staff sometimes see me walk into the office and they go, no, what's he going to do today? Yeah.

Well, how have you, I guess, how have you then kept on the straight and narrow then?

Just by knowing it. Not like, you know, just working through everything and being able to take the bull by the horns. Yeah. And probably. What it wasn't what I said, silly part. I've never been scared of hard work, so hard work's not something that bothers me. If it's got to be done, it's got to be done. Just get in and do it. And working the long hours, as much as it probably bothers my wife, doesn't bother me either, so.

Yeah, but I think there's a slight difference. Like there's hard work for the sake of hard work and then there's hard work with direction, which is what you pick. You started doing, you know, at some point in your business and that's where you saw like such, you know, level levels and achievement. You know what I mean?

Yeah, yeah, yeah, yeah, yeah. Exactly. Right. Yeah, yeah.

Well, I mean, you providing Aaron an enormous opportunity. There's not many 19 year olds that would get that kind of business training at such a young age. So she's, she's very lucky.

Yeah, yeah. And I think she understands that. Yeah. And maybe I'm lucky too, because it means I can step out and go and work on other things, whereas to get the confidence in somebody else to hand them the manual, hand them the reins and say, go and run this. Here's the staff, here's my little pet that I've set up now. You go and run it. Yeah, so.

Well, that's exciting. Ryan. Look, I've really enjoyed listening to your story today and I'm going to be following it closely. I think maybe we might have to have Erin on at some point in the future.

Yeah, yeah. Hit her up for sure. I'm sure she'll be, she'll be keen for sure. Yeah. She needs to spend some time in front of the camera because she needs to start doing some marketing soon.

So her point of view might be different than yours, though.

Yeah, it might be. Might. They will be interesting. I'll be interesting to listen to. It definitely will.

So, yeah, very good. No, but I've loved everything you've shared today. Before we wrap up, is there any advice you'd give to other builders out there about the progression through the levels that you've gone through and all the success you've had?

Yeah, well, probably the biggest advice I'd give to people and I give this to people. I get phone calls from people all the time that are looking to join the APB or whatever. And the number one thing that I say to people is if you. Doesn't matter whether you're looking to go into the business coaching or you're looking to go into the elite mentoring, if you believe that you can't afford to pay the APB what they want for you to go there, that's enough reason for you to have to go there. Yeah. So if you can't afford it, you need to do it. Yeah. As a building company owner, we should be making enough money that you should be able to pay them, and you should be able to pay them whatever they're asking because the information that they've got there to give to you is so valuable that. Yeah. Can't be understated.

Well, thanks, Ryan. You're making my job nice and easy by giving those plugs, so I appreciate that.

Yeah, yeah, yeah, that's it. Yeah. And that's not a plug. Anyone's dog. We just do either. That's. That's my honest opinion. That's what I. That's what I tell people all the time. Anyone that's spoken to me would understand that's exactly what I tell them.

Awesome. Well, thanks, Ryan. Look, my biggest takeaways from the episode today, we're knowing your numbers, documenting your systems and processes, and also just having a purpose for you, which is obviously that succession plan with Erin. And that's like a really powerful driver for all the things you're doing with the builder levels, but huge. Thanks for coming on the show today. Also to our listeners, wherever you are in the world, thanks for listening. If you like the show, please subscribe. And if you're feeling generous, leave us a review as well. But until next time, have a great day.