Understanding Financials

Location Homes has been around since 2008 in the region that we operate. In 2011, my wife and I bought the franchise and took over some other areas north of where we are.

We redeveloped the business from a branding point of view, re-systemised the business and getting an understanding of our market.

We needed to find out what we were passionate about and what our skills were as a company.

We then realised what we had to offer the market, and we focussed on quality and affordable luxury in our designing and building of homes.

Our typical client is someone who has a budget but is aspirational. Someone who really wants to create a home that they can be proud of, that’s functional, but meets those budget constraints.

We have a full in-house design team, a full quantity surveying team and we take care of the entire package from start to finish: consenting, preliminary design, pricing, everything.

It gives the client complete confidence that all the problems that may arise can or will be dealt with by our team.

We Struggled to Convert Our Leads Into Sales

We had a few specific challenges in our business which led us to connect with the APB’s Mentoring Program.

No matter how capable you think you are, there are things in the building industry that will always catch you out.

For us, it was knowing our numbers; understanding where we made our money and where we lost our money.

It was also wanting to understand more about why we could attract leads and not always convert them.

To be honest, I held off contacting APB for a year.

I thought, “Here’s another gimmick.” But as the marketing kept coming across my feed, I started to do a bit more research on the company, and I realised there was a lot of substance to what was being offered.

We were really looking to fix lead generation, quality of leads, knowing our numbers and reporting.

Reporting is big and I feel that one of the reasons so many building companies fail is not because the technical side of the building is poor, but business operators and owners, and their accountants, often don’t actually understand the fundamentals of financial reporting in a building business.

Our Entire Mindset Shifted

The three greatest solutions that we’ve achieved working with the APB Mentoring Program are, first of all, a much greater awareness of our numbers, in real-time.

Looking at revenue; what have we achieved quarter on quarter. Our margins; understanding our true margin in our jobs.

In addition to that, forecasting; looking forward.

We have much more comfort and awareness of where we have holes opening up in our workflow and then linking that with our marketing strategy.

Under the level four lockdown that we’re having in New Zealand (COVID-19), within the first week, I gathered our team around and Glen, my partner, and I met with our coach and we discussed the need for a marketing platform.

I can report that two weeks after that meeting, we rolled out our marketing initiatives last week, and we’ve had eleven new enquiries in the past eight days.

That has never happened in my 16 years of business, that we’ve gone from having next to no leads, in a very difficult time, to eleven.

So, my biggest issue right now is getting around all of these new client leads and making sure we’re looking after them. We build around about 15 medium- to high-end homes a year, which has kept us pretty busy, and if we convert half of those leads, we’ve got our hands full going forward.

The second great solution that we’ve experienced is better pricing practices and increased margins.

I think that confidence comes from the conversations we’ve had with our coach and the training that we experience as well.

It’s good to see the building market is slowly realising that, in order to serve our clients and to be in a safe pair of hands to trust all that money with, we need to be making money because profit is security.

And the more profitable we are, the more we can support our clients.

The third great outcome we’ve had with APB has been around our attitude towards marketing.

I had a very strong aversion to marketing and I believe that was a key reason why our lead generation was patchy and poor.

Now, we’re so passionate about doing focused, well-planned marketing campaigns and understanding who our clients are, where they are, and how to get to them.

And that’s been a key thing, a mind shift for our whole team and we’re very excited about the results that we’re seeing.

Knowing Our Numbers Was Game-Changing

The most valuable and favourite topic that we’ve covered with APB and how it’s directly impacted our building company would be knowing our numbers.

We’ve increased our margin by 4% in the eight months that we’ve been working with APB. That’s been partly due to this awakening, or awareness, that it’s okay to charge what we believe we’re worth, because we’re adding the value.

We were already beginning to improve our margin, but the reporting and new knowledge of our numbers approach to running our business have allowed us to be much more critical and act a lot quicker to problems in pricing.

Things like managing variations, changing orders, really understanding that every dollar counts and understanding the movement of sales through that funnel, when it’s going to impact us, or a lack of sales, when it’s going to hurt us.

As boring as numbers are, I get excited by seeing those changes, because they translate into real-world benefits: we can pay our staff more, we’ve got no problems paying our creditors and ultimately, there are potentially dividends there for the shareholders.

So, if we can do all of those three things, I believe we’re a successful company, and that’s what knowing our numbers has enabled us to do.

APB Provided Us With The Pathway To Progression

Would I recommend the APB Mentoring Program to other builders? Absolutely.

They’re great people. They know what they’re talking about, which gives us confidence and direction.

The APB Mentoring Program consolidates a whole lot of key tools and knowledge that every business owner needs.

And I feel the longer you go on in business, if you’re not taking that time out to work on it and to learn, you just keep doing the same bad things.

By being stopped and checked by the APB team on a regular basis, our upskilling is exponential.

As we learn more, we want to learn more, and as we implement and see the results of these changes and these tools, we want to do it even more.

With the very clear, logical progression, or the pathway that our coach has built for Glen and I as we’ve progressed into understanding our business, understanding its weak points and then building on its strengths, the financial reporting and knowing our numbers is the starting point.

And then building this big picture around it, looking at our forecasting, there’s been a very logical, steady-as-she-goes progression towards enlightenment around our function of our business.

It felt a little bit slow to start with, but when we look back, we’ve made huge progress.

I’m definitely feeling very accountable and our coach is not afraid to gently kick us in the butt, if perhaps we’ve shifted or lost focus.

And that’s what we need; I think it’s so easy when you’re the leader of a business to feel you are not accountable to anybody.

You are the master of your own destiny.

And that’s all good and well if you’ve got a clear focus and a path to follow but if you don’t, it’s easy to drift along. Creating tasks and targets between our catch-ups with our coach have been very, very helpful to keep us on track.

We’ve got the day-to-day running of the business, and that has to happen.

But this kind of urge to get back and work on the business every week so that we are scoring the goals that we need to every month has really helped us accelerate our progress.

Also, people who are starting out in the construction industry are notorious for being technically brilliant, and a lot of great builders become business owners, but they don’t have a foundation in finance, client relations, administrative systems or reporting.

And that’s a weakness in our apprenticeship scheme and our education structures.

That’s where APB and the Mentoring Program fills the gaps brilliantly, and provides a non-public school education facility.

So I would absolutely recommend the APB Mentoring Program to anyone at any stage of their business.