98. Running a Remodeling Business With Barbara & Kris MacGregor

What do you like about fixed price?

From our perspective? The clients love it. Their banks love it. It just makes the journey and the final outcome that much nicer for all parties involved.

Yeah, we're still on talking terms and getting really good referrals and testimonials from our customers because they've, you know, a lot of them have enjoyed the journey and it's been more certain.

Welcome to Professional Builders Secrets, podcasts for building company owners wanting to grow safely and securely. I'm your host, Will Blunt, and today I'm joined by Barb and Chris McGregor from my home renovations in New Zealand. Welcome to the show.

Hi, Will.

Hi, Will. Thanks, Will.

Yeah, we were just joking before the show. I don't think we've had anyone from New Zealand on. Well, if we have, it was before my time, so. But looking forward to this chat. As long as you don't get into anything about rugby union.

Yeah, we'll keep. We'll keep that till later on after the World cup, eh?

Yeah, yeah, exactly. We can talk about Union in the 90s if you want, but there was a bit more competitive back then.

Yeah.

So tell me more about my home renovations and how it all came about.

Yeah, we started off life and under a company called McGregor Building Services. The background to that was I'd been working for someone else doing insurance work, actually doing pricing and managing insurance work. And I had an uncle at the time who became our accountant, actually, who kind of gave me a nudge and said, hey, look, time to get out on your own. I procrastinated a bit and thought, no, I need some more experience. It's too early. But, yeah, I think, you know, I got a lot to thank him for. Barbara was in a stable, you know, corporate job and was earning enough to pay the mortgage and. And by the grocery. So it was really a good time to make the jump, which we did. And, yeah, that was an interesting journey, I think learned a lot in those early years. You know, we're pretty. Pretty young and naive and, yeah, didn't know a lot. I knew how to build, but that was about it. So big learning curve. We had that company for about six years, I believe, and it was going okay. It was a little bit up and down, if you like. So we were kind of looking for the opportunity to grow.

You were still on the tools?

I was still on the tools and getting a bit older and thinking, you know, I want to get off the tools. This is, you know, my back saying to give out and, you know, we want to grow this and Start employing people. We did have an apprentice and I had one other builder who was actually a good mate of mine. So, yeah, I think it was Bob actually, who came across this opportunity to join a franchise group which was appealing. And the fact that, you know, there was a bit of, I guess, scale there in terms of buying power, you.

Know, multiple people, bit of a marketing machine was behind them. So we knew that there'd be some, you know, a good flow of leads coming in. So, yeah, we jumped. We took the opportunity. They liked the look of us. And so, yeah, we joined a renovations franchise here in New Zealand. I think we were the second franchise. So very, very early stages of their journey as well. And I guess we helped to help to form that, what that looked like for them and their processes. And we learned a lot through that as well. And we were with them for six years.

Yeah, six years as well, too. I think we've always specialized in renovations as well. So McGregor building was renovation specialist, obviously. This franchise group was as well. I think, unfortunately, the issue with these guys was there was a lack of building knowledge in there. Very good marketers and salespeople. And we kind of quickly learned that things weren't quite as established, I guess, as we were led to believe, which I think subsequently led us to going, hey, look, there's just not enough in this for us. And we. We talked about, yeah, breaking out again, back into a mum and dad, doing our own thing, which is. Yeah, how. How my home renovations has come about. We'd learned a lot and part of that was obviously sort of having a name and a brand. I think that was recognisable. You know, we could market and things. Barbara's background is marketing as well, too, so she had a lot of. A lot of thought and input into that. And, yeah, we. We dreamed up the name and. And stepped out of the franchise and.

Back out on our own. Yeah, haven't looked back.

No. Things kind of transitioned very quickly, actually, and quite smoothly. Like, we. We built up work very quick, so there was no lag time. We. We had no change in staff as well, which was really nice that the guys all. All came with us.

We're keen to come with us.

Yeah, keen to come with us. And. And it transitioned smoothly and then, yeah, we've just been growing it ever since.

The one thing I'd add to that is that we came across APB as we were transitioning out of the franchise and into my home renovations. So it was a really opportune time to stumble across them because we went through A lot of the action plans and the processes and that's helped us create the brand. My home renovations, the APB training, you know, we stepped ourselves through what our target market was, what our niche was. It was just perfect timing, really, because we had this blank sheet of paper, so to speak. We had a new opportunity to build a new business the way we wanted our business to look, and APB was there in the background helping us to do that. So it was. Yeah, just perfect timing.

Yeah.

I'd love to hear more about my home renovations. But before we jump into that, what are some of the warning signs that other builders could see if they were thinking about joining a franchise? Because there's some great franchises out there, but obviously there's some that don't meet expectations as well.

Yeah, I think for me, it's really doing your homework about the franchisor. So it's looking into their background and just seeing what skill sets they have and equally, I think, as to who they employ too, because, I mean. Yeah, you don't know. No one, you know, can be fantastic at everything. You. You want to employ the right people for the right role. With this particular franchise, when we joined, they did have a builder on board who was fantastic, you know, in respect to the whole building aspect and pricing, I guess, and things.

Project deliveries.

Yeah, yeah. He unfortunately left, I think, within about what, six to eight months of us joining through various circumstances, but it left a lot of blank holes. So my advice is really dig pretty deep on the skill sets of that franchise group, have a look at their systems, and just make sure that everything's meeting your expectation. There's a lot of good sales pitches, I think, that go with them equally. I think try and talk to some of the franchisees and. And just, you know, get some honest opinion feedback from them would be a really. Yeah. Sensible way to go about that.

I guess it's tricky because you don't necessarily. You may not have known at that time what the right systems were.

Right.

So you're buying into.

Yeah.

The dream of getting, you know, a marketing engine behind everything that you do, and I can see why it'd be attractive.

Yeah, yeah.

And they were, you know, in their defense, they were in a startup phase themselves, so even they probably didn't understand the systems that were required to deliver the renovation projects on time and on budget and so forth. So, yeah, they were learning as much as we were. Obviously, if you're buying into a much more established franchise, then you'd have to hope that the right systems are in place. And yeah, like Chris says, my recommendations to anybody would be. You've really got to try and test those out somehow before you, before you leap in.

Yeah. And I think you kind of. You get what you pay for. Like, we didn't pay a lot, given it was a startup, which was good too. But like Barb says, if you're getting into something that's established and proven, expect to pay for it, but equally expect results as well, too, and, you know, the proper systems and processes.

Well, at that point, you've got the benefit of talking to other franchisors as well that have used them already.

Right. So. Yeah, that's right. Yeah. Rather than being a trailblazer and I guess making mistakes and as we kind of did, I guess, and learning from them as well.

Okay, so you made some mistakes. That's fine. Everyone makes mistakes. So it was a great learning experience. And you're still here. You've got your own business focused on renovations. So what are some of the key differences between running a business focused on renovations compared to like, custom homes or new homes?

Yeah, this is. And I don't want to be contentious with the new home builders. You know, I've been building nearly 30 years now. I've only ever built three new homes in 30 years. So, you know, like, to be honest, I look at a new home and I'm like, that's a walk in the park compared to some of the stuff we do and have to deal with. No disrespect to the new builders, and I know there's plenty out there and, and we know a few.

We know a few.

So. Yeah, please don't hate me. But, yeah, look, we, you know, we're dealing with existing sites where a lot of limited access, often, you know, extensions are done out the back and, you know, it's quite narrow up the sides of homes. These houses are out of, plum out of square, you know, often built in the 1920s. We sort of, we do arrange through all decades, but, you know, there's, there's. Yeah, they're not square, they're not plumb. So we're, you know, starting from a platform that's. That's not ideal compared to a new home, I guess, where, you know, you ground up and everything should be level and straight and square. Often it's interesting, we, we come across a lot of DIY disaster, if you like, so do it yourself where dad's kind of gone in and, you know, we've got a job at the moment where we had a false ceiling. We pulled the Ceiling apart and found what's currently two rooms was about eight or nine. So they've just cut wall framing out here, there and everywhere. And I don't know how the thing was standing up and all hidden, you know, between ceilings. So we need to deal with that. You know, it's a big one.

And as a result of those sorts of things that we uncover, there's a lot more administration and behind a renovations company, I believe, because you often do have lots of variations or change orders that you have to process. Yeah. When you're, when you're tackling the. The unknowns that sort of reveal themselves through the project. So.

And we. A lot of our clients will. Not a lot, but probably maybe 50, 50 will actually live on site during the renovation depending on the complexity and. And I guess their level of comfort.

Yeah, their level of comfort and 7:00am drilling.

Yeah, totally. It's, it's, you know, it's stressful enough, you know, pay and do these things, you know, let alone being. Yeah. Woken up at 7am by point builders, you know, making noise and mess. So that, that can be, you know, tricky in itself too. And we need to, we need to be respectful of neighbors as well. Is a huge one too. So, you know, they've all got neighbors that they've got to move back into the renovation and live. Live next to afterwards. So we need to make sure that the neighbors are happy, you know, we're not blocking driveways or, you know, you know, dropping materials on this section or, you know, blowing dust over the fence. So. Yeah, there's just so many more complexities that I perceive can. Compared to new homes. So. Yeah, it's part of why we do it. We enjoy it, we enjoy the challenge, but it has its moments at times.

Are there more complexities with liability because you're building onto like you're extending onto someone else's build compared to just building it from scratch.

Yeah, we take out, we, we control the contract works insurance rather than the homeowner. So we do. It does cost us a little bit more money to protect the asset that's already there. But there's ways to do it. So I'm not sure that it's more liability, but it's just a different way of having to manage it, I guess.

Yeah, I guess there is existing structure to be careful of and think about. So a lot of planning is key and probably just obviously not damaging neighbours, properties and things. We're often dealing with overhead power lines too, which are a huge hazard, you know, and existing underground services and Old pipes and drains and things, you know, where they are meant to be and not. So yeah, I guess there's an extended level of liability but it's really managed by careful planning and just thinking about how we're going to tackle this.

What does your process look like in the sense that someone comes to you and says I want to get a deck done or I want to get this additional room added to my house? Something like that. Do you help them through the design phase and everything like that from end to end?

Yeah. So we follow a similar process to perhaps some of the custom home new builders and that we are design and build. So same sort of process. They approach us, tell us what they're thinking of doing, hoping to do. We obviously have to do a little bit of research into the property and what the legislation or the rules are around that property from a council perspective and then yeah, we walk them through concept design. We'll do a cost estimate based on that concept design so that we know whether we're in cui of what they're hoping to spend on the project. And then once we've been given the tick of approval there, we move through to the working drawings or the consent drawings and apply for consent on their behalf. And at that point we do fixed price. We present them with a fixed price quote, which I guess is a little unusual, particularly in the New Zealand market for renovations. Most builders will do renovations on a cost reimbursement or charge up basis because there is so many things that are unknown. That is the easiest way for a builder to quote or price up, whereas we do the fixed price, which is a bit of a differentiator for us in the market here. It's taking us a while to, to get that process down pat and our pricing tool built. But we're there, there or thereabouts now. It's always a process of continually improving it. But yeah, so we present them with the fixed price quote and. And then away we go. So it's. Yeah, that's the process very similar to a new build.

Yeah, I liken it to the, to our customers I say we're a turnkey approach. So right from start to finish we'll take care of everything or as much as you want us to in terms of if they want to supply their own plumbing fittings, we can, we can live with that. We prefer to use our own subcontractors just for control as well too. So yeah, it's like a new home turnkey approach but with renovations is how I position it.

What do you like about fixed price.

It's. For us, it's been a much nicer journey with the clients. I know of companies doing cost plus or cost reimbursement and there's a lot of litigation because, yeah, there's not a lot of time put into giving the clients an estimate of what it's going to cost. It's very much pie in the sky. You know, it'll be around this and often they get to and beyond that point and, and you know, the job's only half finished and the clients are really questioning it. The banks, the banks push back, say, hey, we can't lend you more, or you, you can only borrow another 50k or whatever it might be. So it gets really ugly really quick.

Yeah, there's been some horror stories that we've heard and, and so from, yeah, from our perspective, the clients love it, their banks love it. It just makes the journey and the final outcome that much nicer for all parties.

Yeah, we're still on talking terms and getting really good referrals and testimonials from our customers because they've, you know, a lot of them have enjoyed the journey and it's been more certain.

Obviously it's sharing the risk between the two parties. I mean, we're obviously having to take a lot of time in the process to understand their plans and their project and the property that we're working on so that we can estimate the, the time and the labor and materials involved with the project. So there's a bit of risk on us to getting that part right. Obviously the arrangement is that if we find anything that's unusual or unknown, that becomes a variation and a change order. So we're trying to minute but, you know, we try to minimise those down as much as we can. Whereas I guess under a cost plus or cost reimbursement arrangement, the risk is all on the customer, on the homeowner. You know, they're the ones that are taking most of the risk because the builder's saying, well, it's going to cost what it's going to cost. I can give you an idea of what that might be, but the risk is with them. And yeah, like we've said, you can have some horrible stories where the clients run out of money and they've got an unfinished house and we would never ever want to leave any of our homeowners in that sort of situation.

Yeah, that'd be worst nightmare kind of stuff. I think, you know, there's cases where, you know, hey, mistakes happen on sites and I think you Know, if we have that, we have to rectify it at our cost, whereas, you know, cost reimbursement. And the homeowners will never know. They don't understand the building process. But they can be paying for, you know, reworks or if there's a builder forming on site who's on his phone talking about other jobs all day, you know, only working half a day, they're still paying for that time. So for us it's just more ethical, you know. And again, I don't want to run down Cost plus builders because there are some good ones who are very honest. But from our point of view, yeah, it's more ethical. It's a nicer journey. We have a saying that we have no hidden surprises within our company and what that means is that the customer will always sign and approve any expenditure right through the whole process. So they're never going to get a bill that they didn't expect.

Yeah, I mean, it's nice to, from a consumer's perspective, just to know what you're paying. And as you said, there's always going to be things that come up which, which might need to change, but rather than like always just getting new bills and new bills when, when different costs come in. So, I mean, it comes down, it must, it must come down to how accurate you can accurately. You can estimate though. So how do you go about that process?

Yeah, so. So we, yeah, look, this. We have some jobs go well and some jobs that don't.

And like Bob said, there's less of those don't nowadays.

Yeah, improvement. And this is a really tricky thing with renovations. You just never quite know what you're getting into at times. So we've built, I guess, a lot of experience around some of the areas where we kind of know that, hey, when we're dealing with a 1920, 1930s home, that it's missing a lot of structure. This is how it was built. So it's going to be lacking this. No building paper, no insulation, inherent issues with the different eras of houses. We will approach some areas where we're allowing what we call provisional sum. So it's kind of our best guess allowance for that particular area. And for example, excavation we'll do a provisional sum on because we just don't know what's in the ground.

Auckland's built on several volcanoes, so there's.

Often rock and, you know, like you could spend 10, $15,000 on a geotech report and find all this out and then still have to deal with the rock. So we kind of sort of say, the clients, hey, look, we've got a pretty good idea. There's some rock. But we don't need to spend 10, 15k with a geotech. We'll start digging. If we find it, we find it. And then we have to deal with it anyway. So it's just that balanced approach to how we tackle those sort of unknown areas. But yeah, it's experience through mistakes and we're constantly just reviewing and taking learnings from every job.

And I know we promise not to talk rugby union, but the analogy here is that, you know, the All Blacks, whenever they play a game, they spend an awful lot of time reviewing how that game went and learning the lessons for the next game. And that's exactly how we approach it too. We review the jobs, we do what went well, what didn't. How do we tweak that pricing tool so that when the next job rolls in, you know, we're not going to make that same mistake again.

And it's never perfect. Like perfection doesn't really exist, does it? So you a level there where we're just trying to do the next job, just that 1 to 5% better and more accurate and just continually striving to do that.

And Chris, hit on it before that because we are specialists in renovations. We kind of understand how some of these old, lovely old homes are built and we kind of understand what we can expect. Whereas if you've got a new home builder who's trying to fill in his gaps in his workload with renovations, he's not necessarily going to have that experience. So he's going to have to. Or she, I should say as well. Nowadays they're going to want to do it on a charge up or a cost reimbursement basis because they just don't have the level of experience that we've built up over the years of tackling these older homes.

Yeah, and there's some skill and technique in some of the ways we can tackle these issues too, which I think a new home builder, obviously they won't have because they don't, you know, it's not what they do and deal with. So it's. Yeah, we have some solutions to problems that, you know, we can fix fairly, cost effectively, I guess, if you like. And again, that's just through trial and error and experience.

Yeah, Bob, just before we move on, I've actually always loved the metaphor of a high performance sporting team. And the All Blacks are a great example of that. I mean, anyone that has come across the All Blacks in their life, they would Understand how high, like elite they are in terms of their systems, processes and everything like that. The comparison between that and a business. I think there's a lot to take. You know, you've got a coach, you've got a number of players in the team. Everyone's working towards a system processes review process. Yeah, I love that metaphor.

Yeah. And outside is our APB coach, Andy Scarter.

Okay.

He loves it, too.

Yeah.

And it's like he's a Springbok, though.

Yeah.

He's a bit of an All Blacks.

Fan too, though, on the fence, aren't you, Andy? But a lot of it's about culture, you know, and it's. And that's what we're trying to instill with our guys, you know, and it's not just while you're at work, it's how you behave and present yourself outside of work, too. It's that whole overall, you know, encompassing. Yeah, ethos, if you like. And that's your Blacks to a T. And, yeah, we are trying to model and emulate that somewhat. So, like you say, well, it's incredible, you know, the amount of transition from a rugby team that comes into a business that. That's the same or similar. It's nice thing, really.

And when we talk about that with our own team, you know, being New Zealanders, they are all black fans themselves. They just. They get it, they understand, you know. Yeah. It resonates with them. It's perfect, really.

You mentioned that your team came across like, from the franchise into the new business, which means you've obviously doing something right with maintaining them, retaining them, hiring the right people. What mentality did you take into that?

Oh, well, I guess I just. I hope that we're honest bosses that have their best interests at heart. You know, Chris and I take a lot of satisfaction out of seeing our own team grow, both professionally and personally. The fact that we can give them a stable income, which enables them to go out and buy their first home, man, that really warms our hearts as much as it must make them pretty proud. So I think, yeah, we've looked after them. We've given a lot of them some great career progression. We've got guys in our team now that started out their apprenticeships with us, so we've been able to give them the ability to finish their apprenticeship but then go on at some point in the future to run jobs and. And we still, you know, try to keep that working through now with, you know, having always having some apprentices in the team to help. Yeah. Build our future. Our future team for. Yeah.

And yeah, most of our guys are waged or on salaries too. And I think this is probably a big difference actually between new home and renovations. And we have tried just subcontractors or contractors with renovations and have really struggled and found it didn't work. So yeah, there's probably some new home guys going, oh, I just have, I employ subcontractors. I can, you know, they can come and go as I need them. But we, yeah, we found having, having employees is much tighter. Tight knit team. We feel more comfortable investing in them and it's. Yeah, I think it just makes for a better overall, you know, overall job satisfaction for everyone, including a client too. So we try and treat our team like they are our own family, you.

Know, like we will without them. We wouldn't have my home renovations.

Yeah. Outside of work, you know, if it's personal, but we're happy to chat and do it. Yeah.

It removes one level of complexity because as you mentioned, renovations can get quite complicated on site, all the different things going on. So if you've got your team at least you're removing the, the potential of inconsistencies in work quality.

Right. Yeah, that's right. Yeah. Yeah. And I think like just treating, you know, neighbors and stuff as well too. When you've got a subcontractor coming in, they want to do the job as fast as they can because they're going to make more money depending on how you, you know, set things up. They're not particularly interested in a lot of okay, we need to, you know, treat the clients, talk to the clients and the neighbors nicely. Whereas we, we educate our guys. It's hugely important. You know, we've had referrals from neighbors even because they're like, man, you guys have done such a good job. You're tidy, you're polite, you work, you know, quick. So it's really important. And I think a lot of builders don't, don't get that. You know, it's like the public are judging you all the time and watching and watching progress. So yeah, a good team is really key to that.

Tidy builders, there's not a whole lot out there.

Yeah. And again we like hey, we now guys, we price in cleaning time, you know, and it's not just the apprentices all the time or the labourer. We every Friday we have a big site clean. So knowing the homeowner's gonna come in probably over the weekend and have a look and that just reflects, you know, like if your site's tidy, they're gonna assume your work's tidy. If the place is an absolute mess, what does that say about your work? You know, quality and equally your work vehicle. Like, clean them, guys. And don't leave all your pie and, you know, wrappers and Coke cans just, you know, strewn all through your ute or your van because it looks terrible, you know, or sight. And take care of your tools because, yeah, people are noticing that stuff.

Yeah, those. All those little things add up, don't they? And that comes back to the marketing side of things, like that perception that people build subconsciously contributes to how much you can charge and everything.

Right?

Yeah, yeah, absolutely. It's the whole package that they're buying into.

Professionalism. Yeah. Yeah.

So you mentioned earlier about the franchise being a challenge in your complete journey, but since you've had my home renovations, what's the biggest challenge you've faced?

Well, I think it's probably still pricing, I think, in getting that right. You know, not missing things out or just really understanding that, hey, we're working with an old house with old walls or we're tying into an old wall or roof. And yeah, it's so variable that. Yeah, I think for me, anyway, that would be probably the biggest ongoing challenge.

Yeah, I would agree. I mean, at the end of the day, we want a profitable business because we want to be here in 5, 10 years, 15, 20 years time doing the same thing. So in order to be here for our staff and for our homeowners, we're going to have to run a profitable business. And that boils right back down to making sure that we price the jobs correctly and covering our overheads and so forth. So, yeah, it's been the building of our pricing tool and the constant tweaking of it. Yeah. We haven't always got it right. We're getting it more right nowadays, which is great.

Yeah. And you don't want to put too much fat into jobs. We need to be honest and fair about it. I think a lot of. A lot of cost reinvestment builders will, you know, say, say to clients, hey, those. The fixed price guys are chucking so much fat in because I've got to cover their, you know, cover their butts, whereas we're, you know, open books. So you can see it. But that it's just not true. It's. Yeah, we need to be, you know, still pricing the price checker. We need to be, you know, on par or roundabout. I think, like, we can't be hundreds of thousands of dollars different. So we do need to get it Right. You know, and within that we have some wins and losses, but they are learnings, you know, and we need to make sure we have really good cash flow, I think, to cover some of those losses at times and, you know, put our hand out and say to the client, hey, yeah, we made a mistake. We'll pay for that and, you know, carry on and keep the relationship good, too.

Do you find clients pushback based on that fixed price versus cost plus scenario that you just mentioned? Not really.

Like, they're all our clients, like, yeah, love the fixed price. I think as a unique selling point, that's a big thing.

They often come to us because we're offering the fixed price option.

Yeah, a lot of banks like it too, because they've got horror stories equally about, you know, blowouts with cost reimbursement. And the client really understands, hey, that's a, you know, pretty fixed point. So we know what we're in for. You know, we always Recommend A contingency. 10% would be our minimum. If we are dealing with an older home, we know something that's going to have issues we like, you know, 10 to 20. If you can put that contingency aside, yeah, you, you'll be, you'll be good.

And if you don't spend it, well, you know, if, if it's not needed, you can go and buy a whole bunch of new furniture for your newly renovated home or something.

And what's funny is that if we don't spend that contingency in the early stages, and that's when it is normally, you know, as we're doing demolition, we're uncovering issues. If we get half, three quarters of it through the job man, the variations from the client. Oh, well, you're here or can we upgrade? Yeah, just come. So they spend that contingency regardless because they've got, you know, the money or the borrowing capacity. So, yeah, it's a win win.

What are the sums? What are some of the things you've done over the years to refine your pricing and estimating process? You mentioned reflecting on previous jobs, that kind of stuff. Is that just organically happened?

No. One of the first things we did was bring in what we call task codes. So whenever our guys on site are filling in their timesheets, they have to let us know what they're doing. So if they're framing up walls, then there's a code for framing and they have to tell us what particular part of the house they were framing. So there's a little bit of admin for Our on site guys at the end of the day when they're completing their timesheets. And so what that means is at the end of the job we can filter out and look at the job through the various different stages. So we can look at framing for example, sticking with that example. And we can say, well, we allowed X number of labor hours to do our framing. This is how much we actually, this was the actual expenditure on framing. So we can know if we're going a little bit short or a little bit shy on that, that task or not. So I think that's probably been the biggest, the biggest thing for us and to be able to keep tweaking those, those prices.

Yeah, and, and what we. I'm constantly seeking feedback from the builders on site, you know, at the coal face if you like, they're coming across it. So you know, we have a, we call them a construction manager and one of our really good lead builders goes around all the sites once a week and just runs through some checklists and just gets feedback, you know, from, from the guys. Hey, what, what have you struggled with and why? And then we can analyze and have a look at that and, and just, you know, make, make adjustments. It's because, you know, every job's so bespoke. We've got to be careful not to overreact to some of that and, and kind of just average it and go, hey, look, it happened on this job, but it doesn't, didn't happen on these other four. So yeah, it's, it's, it's a, it's a team approach with that just to get the feedback from the guys in terms of what's working or not and sensibly adjusting our pricing, you know, to, to those. And I think just, you know, in general, just talking with the guys, one of them the other day had already got a deer about, you know, whether I can sort of preempt potential issues with, with the house and just note those. I might say, hey, there could be a bit of rock behind that. And you know, just so they're aware of it. So we can deal with it, you know, either at pricing stage or we're aware of it, you know, during the build too. So yeah, communication with everyone is really helping I think. Fine tune, you know, that pricing.

Do you use any software to track all of that stuff?

Yeah, yeah, we use buildertrend as our project management software. We've been using that for a number of years now. I think we were, I think builders Trim was barely even known here in New Zealand. When we picked it up and started using it. And that allows us to obviously do those task codes that I was talking about through the timesheet or time clock function. And then also probably the other biggest thing going back to your other question was the purchase orders. We obviously have all our subcontractors put their bids or their quotes in to the system and then we can release purchase orders. So we're telling the subcontractor, this is, this job is going ahead. This is how much you quoted. This is what we've agreed to pay you for this scope of work and it keeps everybody honest. It means that if there is any extra work that's uncovered during the project, they have to raise their hand too and say, hey, look, we didn't allow for this situation. So now we've got to talk about charging some more money or whatever it might be and we can have that conversation with the homeowner. So build a trend has been key in being able to control our costs through purchase orders as well. And then we tie in with Xero, which is just a fantastic accounting piece of software. So yeah, that's revolutionized a lot of small businesses, I would say over the years.

It sounds like getting that feedback as well consistently on all of your jobs comes back to having your own team as well.

Yeah, 100%. And again, like a subcontractor's probably not going to be interested in even talking about it unless you're paying them for it. You know, it's, it's, yeah, that again, I think just sort of adds weight to having that, you know, close knit team.

Okay, so now about APB briefly. What's the one thing about APB that has changed your building company for the better?

We Both say it's P4P pricing for profit. Pricing for profit.

Calculator.

Yeah. Like really understanding what it costs you to run your building company every day. I'm not great with the financial stuff and never have been. It's not something I'm taught as a builder. You know, I could build and build well. But yeah, the financial side of it, I struggled. So yeah, get into that and learn. And then, yeah, just that light bulb moment where I understand, yeah, this is what it costs. So actually we're not charging enough margin to cover our fixed expenses and make some profit. You know, it's been a real, yeah, light bulb for me, probably less so for Barb. But again, just, yeah, that's been the game changer.

Yeah, just having that calculator where when Chris and our estimator have priced up a job and they're about to present it to the homeowner. I put it through this calculator and we can make some adjustments if we need to. That's just. Yeah, that's been the game changer for us and has definitely helped with our cash flow over the last few years to the point that whenever we do a cost estimate on a concept design, I now put it through the calculator as well. So we're not, we're checking even just any advice, pricing advice that we're giving our homeowners. It's double checked through the pricing for profit calculator first and it's. Yeah. Revolutionized things for us.

Well, that's good to know. Thanks for sharing. I'll be sure to share links to the action plan for any APB members on the work in progress calculator there.

So.

Yeah. Well, Chris, Barb, thanks so much for coming on the show today. Is there any further advice you'd like to give builders out there, potentially ones that are either looking to get into or currently running a renovations business?

Yeah, I think for me it's just like understand your numbers and just keep checking them and then, yeah, it'll just give you that platform, that cash flow to kind of launch yourself and, you know, expand or just tune everything else.

And I, and I would say surround yourselves with the right people, the people. You know, you don't have to be, you don't know, have to know everything. You don't have to be the most intelligent person in the room. You know, you make sure that you're employing people who, who know their stuff. And, and you are also, yeah, surrounding yourself with business coaches or accountants or whoever it might be to help you run your business. You know, construction companies are very complex beasts. And yeah, like Chris said, if you're a builder and you've gone through an apprenticeship and so forth, you don't, you haven't necessarily been taught how to run a building business. You've been taught how to build and there's a difference. And. Yeah. So just make sure you've got the right people around you.

And for anyone else in the world that doesn't know who all the all blacks are, they can look up, look them up online and start to model their business around their systems.

Yeah, absolutely. Some, some good books out there actually, to pick up. Legacy, I think, is one of them.

Okay.

Yeah, that's a really good all Black versus business book. So recommend that. It's a good thing.

Add that to my reading list. I just won't tell my dad. Mad wallaby fan. So.

Very good.

Well, yeah, thanks once again for coming on. I've really enjoyed our chat today and you've shared some great tips and information about, you know, running a successful renovations business. So really appreciate your time.

Thanks, Will. It's been great.

Thanks for having us. Yeah, appreciate it. Thank you, Will.

Also, big thank you to our listeners out there, wherever you are in the world. If you like the show today, please subscribe on your platform of choice. But otherwise, have a great day and see you next time.