Increasing Margins

I left school when I was fourteen years old. My dad was a builder, so my last day of school was my first day of work - and from that day on I've been building houses.

I've been a member of APB for five years. I started Business Coaching about six months in, then moved into Elite Mentoring after four years. I wanted to get stuff happening as fast as I could, and the best way to do that was to meet with my coach weekly. That's elevated us to where we are today.

The Stannard Family Homes Story

Being in business is a really lonely place. Before I joined the APB, I was running a pretty mediocre building company that wasn't making any money. Over the five years before joining APB, I watched my mortgage on my house actually grow because I was building houses, but not making any money, I might have even been putting money into people's houses because I didn't know my numbers. But it all comes down to, ‘you don't know what you don't know’... and I didn't know.

The industry, although I believe it has been good to me, has been pretty tough. I spent ten years leaving home at four or five o'clock in the morning and not returning until six or seven o'clock at night - not seeing my family, not seeing my kids, and they were the years where I was making no money. I'd fallen out of love with building, but 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.

When I joined the APB, it was literally the last chance for me and my building company, and that's probably why I went in head first and made it happen.

When I started with the APB, I was only marking up my jobs by around 10% to 15%, and now, with all the marketing and learning along the way, we mark up our jobs by 35%, including contingencies and allowances for inflation.

It's amazing how many things I didn't know back then. The building company I was running, which marked up by 10% to 15%, had fixed expenses that were more than that, which meant I was actually losing money.

I had worked with business coaches before joining the APB, who advised me that marking up by 10% to 15% was a good thing. After becoming a part of APB, I quickly realised that it was definitely not.

Now, I'm making tenfold. 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.

Professional Builder Levels - Reaching Certified Professional Builder Status

For anyone who has just joined or is thinking about joining APB, if they look at the Professional Builder Levels they would probably think ‘geez that is absolutely impossible’, but it's truly not. I'm proof of that.

I started working through modules without paying much attention to the levels for about four years. It was only in 2022 during the APB Annual Retreat in Hamilton Island that I realised I was still only at level 4.

At that point, I also realised I had started many of the steps to complete level 10, but hadn't finalised them. The company manual was partially done, and the sales manual was mostly completed, which are key parts of the levels. However, the big tickets were getting the gross profit above 25% and the net profit above 10%.

So I set myself a goal coming out of the 2022 retreat that when we got to the 2023 retreat in Hawaii, I wanted to have completed level 10. It's been a huge credit to my team that we worked so hard in the past twelve months to get everything in tip-top shape.

Russ (APB co-founder) believes that completing level 10 and becoming a Certified Professional Builder is like having a triple-A credit rating in this industry. But I wanted to get there because my daughter plans to take over my role in this company, and the only way that I can feel comfortable that my 19-year-old daughter can step in and run this company. Otherwise, I'd be constantly worried that she might go through the same challenges I faced over the years of running this business, which has been a lot of hard work.

When bringing family into a business, you don't want to bring them into a burden. You want to bring them into something that is profitable, something that is systemised, something that they can actually run.

Getting Our Financials In Order

Before I calculated the Work In Progress Accounting Adjustment (WIPAA), I was paying tax on money that wasn't mine. You have a huge tax bill and you actually have no money in the business.

Introducing WIPAA into the business was great. We finally knew we were only paying tax on the money that we were actually earning.

As builders, millions of dollars pass through our bank accounts yearly, weekly, and only a small margin of that is ours. So, unless you know your numbers, you're doomed, because you'll spend money that's not yours.

It's easy to do that when you're in a growth phase, because you think you're making money, there's money in the bank, but the money is not yours. That's where the WIPAA calculator becomes really important.

Future-Proofing The Business With A Company Manual

One of the biggest things to come from progressing through the builder levels is having a fully vetted sales manual and company manual that we live by. With the implementation of these manuals, everybody in the business has a clear path of what their role is and exactly how to do it. This way, if someone goes on holiday or is sick, someone else in the business can step in and do exactly what this person does.

The power of these manuals will be most evident when my daughter Erin takes over my role in the building company. By then, it will be a $15 to $20 million building company, and it will be managed by a 20-year-old. That doesn't happen by accident. A significant amount of work goes on behind the scenes to create this manual that she can then live by.

Working Smarter, Not Harder

When you join the APB, you join because you need to get systems and processes in your business. Generally, every person that joins the APB is time-poor. But how do you find time to work on your business when you've got no time?

The first six to twelve months is going to be the hardest grind of your life, because you're going to see the opportunities that are there. You're going to look at that portal and think ‘how the hell am I going to get through this? I haven't got enough time to do what I've got to do now, let alone get through these modules.’

For me, I'd smash out modules early in the morning. Everyone else would roll into work at seven o'clock and I'd already done half a day's work. I did that for about six to nine months, until I had built up the cash reserves in the business to be able to employ the next person… and then the next person came along… until I had all the staff that I needed and I could peel out of the day-to-day operations and work on the business.

Hard work was something I've never ever been afraid of. I had a vision and I knew that I had to go after it. Because the alternative was the company going into liquidation, me losing my house, losing everything that I've ever worked for, and having 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 are people out there that could resonate with that - that was me six years ago.

My coach, Andy, has been a pivotal part of this. He's been my shoulder to cry on, my rock to yell at, everything the whole way along.

Investing In Marketing

Even during Covid times when residential builders were booming and leads were easy to find, we were spending more and more money on marketing. I knew that if I spent the money on marketing, I would be able to get the best quality leads out there. I would be able to get myself in front of the best people looking to build, and we would be able to disqualify the people that we don't want to build for.

My company is now earning between $10 to $15 million a year, and we're spending about $250,000 a year on marketing. That's a scary amount of money for a builder to spend on marketing. But what I discovered after working with APB was that I could earn that money back ten fold because the more I marketed, the higher margins I could add to my projects.

If You Can't Afford It, Do It

The biggest advice I'd give to people looking to join the APB is - it doesn't matter whether you're looking to go into Business Coaching or you're looking to go into Elite Mentoring, if you believe that you can't afford to pay the APB membership fee, that's enough reason for you to join.

So, if you can't afford it, you need to do it.