Episode 16: Purchasing Practices To Maximise Profit With Ryan Lipchek

In episode 16 of the Professional Builders Secrets podcast, our host, Bosco Anthony is joined by Ryan Lipchek, VP of Sales/Region President at CBUSA. Throughout this episode of the podcast, Ryan shares some of the purchasing best practices to help builders maximise their profits. 

Ryan’s role at CBUSA includes homebuilder purchasing consulting. Ryan works with builders to help them strengthen their bottom line through more efficient purchasing

CBUSA was founded in 2004 by a group of custom and independent builders in Northern Virginia to achieve pricing and service equivalent to that of large-scale production competitors. CBUSA has 470+ premier builders in cities all across the United States. 

Together, CBUSA members have the combined purchasing volume and buying power of a national builder, allowing members to gain purchasing advantage over their competitors.

Throughout this episode, Ryan explains how group purchasing works, what builders need to do to leverage the power of group purchasing, the blindspots that builders are facing, what builders need to be focussing on with every job they take & heaps more!

Tune in to episode 14 now to hear Ryan share some of the purchasing best practices to help builders maximise their profits. 

Ryan Lipchek - VP Sales/ Region President at CBUSA

Ryan’s extensive homebuilding experience and innate business skills provide a unique perspective to the custom building industry. Before joining CBUSA, Ryan spent 10 years with one of the largest building companies in the country, Ryan Homes. He excelled in both production and sales, and won several prestigious awards during his tenure, including MVP of Northeast Ohio, Platinum Club Sales, and the highest honor on the building side of the company, Master Builder

Connect with Ryan

Timeline

1:18 Introduction to Ryan and CBUSA. 

7:31 What Ryan loves about the residential construction industry.

9:35 What’s next for CBUSA?

10:53 What is group purchasing? 

14:04 Where did group purchasing come from?

16:34 What builders need to do to leverage the power of group purchasing. 

18:15 The challenges Ryan sees when he’s working with builders. 

22:13 The blindspots that builders are facing. 

25:22 What builders need to be focussing on with every job they take. 

26:50 How CBUSA helps builders. 

30:48 Where Ryan sees the construction industry going in the future.

33:35 Ryan’s best advice for builders. 

36:38 Ryan’s advice to his younger self and emerging builders. 

 

Links, Resources & More

CBUSA Website
APB Website
APB on Instagram
APB on Facebook
APB on YouTube

Join the Professional Builders Secrets Facebook group for builders & connect with professional builders world-wide.

Bosco Anthony:

Hello and welcome to the Professional Builders Secrets podcast, a podcast by APB for building company owners, general managers, VPs and emerging leaders. Here, we discuss all things running a professional building company, from sales processes, financials, operations and marketing. Hello and welcome. I'm joined today by Ryan Lipchek, Vice President of Business Development for Custom Builders USA (CBUSA), a building member network that has the combined purchasing volume and buying power of a large national builder, allowing its members to gain purchase advantage, and deliver increased purchasing volume. Ryan, welcome and thank you for being here today.

Ryan Lipchek:

Hey, Bosco. Good to talk with you again. I appreciate the time. I always look forward to the chats with you.

Bosco Anthony:

We've actually had some really cool chats in the last few months. I would say, let's start off with CBUSA. Tell us a little bit about the concept and what you do and your role out there as well.

Ryan Lipchek:

For sure, thank you. We are a 17-year-old company. CBUSA started out in Washington, DC, Northern Virginia area. A bunch of builders got together and said, "Hey, we're going to work in unison. We're going to streamline what we buy, how we buy it and who we buy from." And long story short, they had a lot of success doing that on their own. They got great pricing, great service, a lot of things got better than they ever could have been getting on their own. And they said, "Hey, let's make a company out of this." One of the guys stepped away; a guy by the name of Bill Smithers stepped away from his home building company.

Ryan Lipchek:

These guys became the original investors and their buddies around the country started wanting what they did there in Northern Virginia. Now, fast forward, 17 years, and I've been here 15 years of the 17 and now we've become the sixth largest residential builder in the country. We have almost 600 of the best home builders in the country who work with us. Together they do almost 13,000 annual homes and well over $5 billion in annual revenue. So, we're able to leverage that type of massive purchasing power and help small businesses around the United States get better at what they do and become more profitable. So that's it in a quick nutshell.

Bosco Anthony:

Let's open the time capsule here. Tell me a little bit about you and what compelled you to get into this industry. Was this a career choice? Was it out of interest, accidental, purpose-driven?

Ryan Lipchek:

I went to college to get a business degree and play football outside of Pittsburgh and didn't know exactly what I wanted to do. I was recruited by a big national builder at that point; building always fascinated me. So, I ended up spending the first 10 years of my career right out of college with a big national builder and built homes, sold homes, costed homes, managed people and fell in love with the industry, but I knew I didn't want to stay in the production arena. I met Bill from CBUSA almost 15 years ago, and really loved the concept of what he was doing to help small businesses. The company was in the infancy at that time, and I said, “Boy, this would be a really neat career jump, kind of in the same industry, but instead of production helping the custom builders.”

Ryan Lipchek:

I got into it and it's been the biggest blessing in my life; it's a great industry to be in. I couldn't imagine spending the last 25 years in any other industry. It's helping people every day and seeing the progress of homes being built. I don't think there's anything more satisfying than watching these homes go up and being a part of how they're built and how materials are purchased. It's very, very cool.

Bosco Anthony:

Tell us a little bit about the brand reach for CBUSA. You mentioned that it's on a national level now. How did the company grow and transform itself to be where it's at today? I assume when you first started out, it wasn't where it is now; it obviously took some time to get there. So, tell me a little bit about the challenges that you may have faced and the growth that came from it.

Ryan Lipchek:

Boy, that's true. There were extreme challenges that came, especially back in 2008, 2009 and 2010; I don't have to tell you what happened back then. Builders were decimated and home starts were tough. The depression [global financial crisis] was one of the toughest things that home builders had to go through. It brought out the survivors, people who weathered the storm and got stronger. We see it every day today, the builders who went through that are different. They're different to what they were before that. Just like any challenge with anybody, whether it's in family or life or business, you come out the other end stronger, if you come out the other end at all. But if you do, you come out stronger. And that's what I saw with all these building companies.

Ryan Lipchek:

As we continued to grow after that depression, we grew enormously. People really had an ear out for what they could do while the sun shines to prepare for the next downturn, for the next time that the waters are choppy or what they could do to secure their vessel now. CBUSA really was able to gain a big market share in those years, coming out of the depression put us in a position to where we gained national prominence. When we were small, we didn't have the national footprint, the national reach that we do today. As our business grew, we gained builders, and we put ourselves in a position to deal with the national manufacturers and become a big force in every market that we were in, which allowed us to procure materials at a better rate, at a better price, and everything kind of took off as we gained mass.

Ryan Lipchek:

I always say that gaining builders and volume in our business is great, but our network is made up of the best. The type of home building companies that CBUSA has is the best of the best, and that's really what we're built on. Earlier this year, as you know, we were acquired by Buildertrend. Buildertrend out of Omaha, Nebraska, is run by Dan Houghton and the Dugger brothers. They founded that company and it has been a fantastic experience with these guys. We're the purchasing division of Buildertrend, and they have 27,000 customers. Their management software is the biggest in the world for home builders. We're a part of that now, and it's been a heck of a ride and we're excited to see where that's going to take us; it's all positive.

Bosco Anthony:

We had a really good experience interviewing Dan as well, amazing guy, like you said; the culture as well. It's amazing what the company does, but we were really proud to have him on the episodes as well, previously to this. It sounds like you're on the right track here with growth. Ryan, looking back at your illustrious career, what do you love the most about what you do and has it changed over the years or has it stayed the same?

Ryan Lipchek:

Illustrious is a good word; I don't know if it's accurate, but it's definitely been a heck of a ride. Things have changed. That's what I love about home building – it changes all the time. For example, interest rates and material availability, obviously we've been going through that a lot over the last whole year and for several years before that. And labour's been a thing for almost the last 10 years now: it just keeps getting tighter and tighter. So, the industry has definitely changed in the way that home builders operate. A couple of things that jump out to me right off the bat are Buildertrend and the way that technology has impacted home building companies. It used to be reserved for the larger companies, but now everybody runs their business smarter, much more technologically savvy in the way that they run their whole business, especially in relation to how builders purchase. That's a big thing that's changed.

Ryan Lipchek:

I would say the other big thing is the way builders choose to procure materials on a local level. It used to be that builders would turnkey a lot of things. Their suppliers would do the buying for the builders, or their subcontractors would do the buying. Builders had a lot of relationships where they bought from the same person all the time because that person took them fishing and hunting, so that was just who they bought from. Now, it's much more sophisticated in the way that builders make buying decisions for their company. It's still a relationship business and sales people are very important, but that's really changed quite a bit over the years: how they buy, what they buy, the decisions that they make every day to run their company are much more sophisticated than they used to be.

Bosco Anthony:

Ryan, what are the long-term goals for CBUSA? You just got acquired now and your bandwidth has increased just from that, but what's next for you on the horizon?

Ryan Lipchek:

That's a great question. We're pumped; we're going to be a part of what's going to happen in the next bunch of years; it’s fantastic. We're taking over the home building world, every facet of home builders. Everything that they do, we want to be a part of it at Buildertrend. What we, the CBUSA portion of the procurement want to be a part of, is the way builders buy materials, the Buildertrend portion, the way that they run their businesses, the way that they do their accounting, the way that they do their estimating. “Get your hammer, get your truck, get your Buildertrend.”

Ryan Lipchek:

We want to be the one-stop shop for small builders through to large builders. If you're a building company, we want to be your right hand in the way that you run your business. So, I know that's a pretty lofty goal, but we have a great set of leadership and people. I think the sky's the limit for Buildertrend and CBUSA in the coming years, and it's going to be exciting to be a part of it.

Bosco Anthony:

Well, this podcast is really dedicated to builders out there as well, and for the builders who are listening in. Take us through the concept of group purchasing: how does it benefit the builders and what economic impact does it have for them in running their business?

Ryan Lipchek:

So, GPOs, group purchasing organisations, have been around for a long time, perhaps many, many decades in many different industries. We have people who sit on our board for years from other industries to teach us how to run purchasing groups. A few that come to mind are hospitals, restaurants and office supplies, there are just so many. A lot of our commodities as we build homes, such as lumber, drywall and roofing, all of these things already have large purchasing groups, large GPOs associated with every one of those industries. And that helps the smaller, independent companies keep up with the big, huge nationals.

Ryan Lipchek:

In any GPO, if you're buying something, why don't you streamline how you buy it, who you buy it from? Buy it with other people who are buying the same doggone thing you are, and it lets you go out and do it better than you could do it by yourself. So, I think everybody understands the whole GPO. I think if you talk to anybody in any of those industries – and we have – the advantages are tremendous. You still maintain your individuality as a company, but now you're swinging a huge stick. Not only are you buying better, tremendously better, and impacting your bottom line, but especially in the home building world, now you put yourself in a position for rebates, and I could talk to you for an hour and a half on rebates.

Ryan Lipchek:

I have a whole session that I've done all over the country on rebates and the importance of national rebates. A national rebate alone doesn't do any good if you don't have a great price, but a great price alone without a national rebate, you're never get all the way down to the best deal that you can get. So, when you put yourself in with a whole bunch of other people into a GPO, not only do you get better pricing, but you qualify for different types of rebates and perks. Probably something that equally as big is getting material to your job. Now, all of a sudden, you're part of one of the biggest everything, you're one of the biggest purchasers of all these goods and materials in the country.

Ryan Lipchek:

So, you're high up on the pecking order when it is time to allocate and decide who's going to get it when things get tight. We've seen things get tight many times over the years, especially of late. And who gets it? And if you're part of a big, big, big buying group, you get it, you get it quick and you get it at a fair, consistent, repeatable price that's locked for X amount of time. This lends itself to your question of the value, which is tremendous. I would recommend anybody in any industry being in a GPO, if it's available to them. It just makes sense.

Bosco Anthony:

Now, Ryan, when did this concept take off, because you mentioned, back in the day, people would go to their fishing mates or someone who invited them to go hang out with them. Something's got to have changed for this concept to really be commercialised on a national level. Can you look back and say, “This was the pivotal moment when it took off in the US?”

Ryan Lipchek:

I don't know the exact moment, but I would say somewhere in the 1980s, I think the home building industry started to get more professional, it started to become where more businessmen and business women became involved in starting home building companies. There's a whole lot of different types of business owners out there now. Some started as framers and worked their way all the way up and owned great businesses, others were plumbers and electricians, and they worked their way up. Some people are coming from the money side of the business. But just in general, I think people realise that home building has kind of been slow to adapt over the last 60 or 70 years. It's always a little bit behind technology; we’re always a little bit more set in our ways.

Ryan Lipchek:

As things have started to evolve and more professional people and technology became a big thing in the 1990s, and then Buildertrend was started back in 2005 in Omaha out of their garage and just to do this. To serve the needs of a more professional industry that wanted to get more efficient, that wanted to get more organised in the way that they do things. I'll tell you this Bosco, too, there's 30,000 or 40,000 pieces and parts that go into a home and it's built outside in the mud. You asked me earlier why I love this industry. How cool is that – what else can you think of that's that complicated to put together? It's the biggest purchase people ever make in their lives, and we're going to build it out in the snow, in the mud.

Ryan Lipchek:

There's all kinds of things that mother nature does and theft and anything else that can go on to make it very, very difficult to manage. That's why home builders make money, because that's what they do – they manage a very, very tough process. As you get more professional, more organised, it lends itself to companies like Buildertrend and the software that they provide to help professional builders do what they do best and manage that whole process.

Bosco Anthony:

Now, APB provides a vital resource to all our builders, and whether it's coaching and training support, what do builders need to do to leverage this purchasing power? If a builder comes up to you and says they want to be part of the network, what do you tend to look for? Do they also need to adopt new systems technology wise to get on the group purchasing train?

Ryan Lipchek:

That's a great question. We look for builders who are first class right people, the type of builders that are open-minded to some different ways of running their business, to different products, different supply chains, distribution channels, just somebody who wants to work on their business, instead of in it every day. That's a certain type of company. There's not much you need to do though, once there's a fit there and they're interested in what we do and they're a fit for our program in one of our 34 markets around the country, they don't need to hire anybody or do anything too different. They need to utilise our multi-million-dollar software system that’s proprietary. We made it, we reiterated it several times over the years, and it's easy for builders and suppliers to jump on and use it.

Ryan Lipchek:

As we continue to integrate with Buildertrend and their massive, awesome platform, it’s even going to get better when a CBUSA customer who’s also a Buildertrend customer is going to be able to do all that from one place, it even gets easier. But until that integration is complete, it’s already pretty easy. A builder doesn’t need to change too much, just the mindset of working with their peers to achieve better results than they could get on their own and be willing to do some of those type of things. So that’s about it.

Bosco Anthony:

Okay. What are the challenges that you may face in your role? As Vice President of Business Development, you’re probably on the phone a lot with the builders, so what would you say are some of the challenges you’ve had to face or what are some of the lessons you’ve had to apply in your role over the years?

Ryan Lipchek:

There are definite challenges, that’s for sure, that’s the exciting part of the job, plugging yourself into somebody’s business. The truth is, our builders are fantastic long before they come to CBUSA, long before they’re working with us and Buildertrend. They’re good people, they’re reputable, they’re making money. We want to help them get more efficient and increase their strength in their bottom line, make more money doing what they’re doing and make it repeatable. There’s a lot of builders out there with profit margins that aren’t where they should be, especially when materials are so volatile as they have been over the last several years. It’s tough to manage a company and trying to get the material to your job site.

Ryan Lipchek:

Those are really the lessons that I’ve learned over the years – to approach builders, very humbly, very openly and gain their trust. But you know what? We’re all builders here, we’re all supply chain people. CBUSA was built by people who understand what a builder does, and we talk to them. We have a sales team and we have an operations team that’s second to none. We plug ourselves into the builder’s world and help them be better at what they do, especially when it comes to purchasing. So those are some of the lessons I’ve learned, I guess. Be humble, gain their trust and let them know that, if they’re willing to listen to what we say, and then do some things maybe a little differently in their business, they can even get better and even more efficient and maybe have some extra time with their family. As hard as it is to juggle all the balls that a builder has up in the air, that’s the beauty of it.

Bosco Anthony:

You sure you’re not a therapist as well for them sometimes when you go in humbly listening to what they have to do?

Ryan Lipchek:

I’ll tell you what, there are some times when that’s the thing we listen to for sure, that’s right.

Bosco Anthony:

It sounds like you’ve had a great career. When I looked you up the first time, I read about how you’ve won a Master Builder Award and a couple of other prestigious sales awards. If you look back on your working career, what do you think is your biggest or proudest achievement that comes to mind over the last few years? You’ve been with CBUSA for quite some time as well.

Ryan Lipchek:

Personal achievements are great, and I’ve had a few of those with different awards and different speaking engagements I’ve been asked to do, and that’s great. But I think my proudest achievement is helping be one of the leaders of a company that ascended in a short period of time to become the country’s largest purchasing group for home builders and put ourselves in a position where now we can be acquired by a company like Buildertrend. All the blessings that have come with all that have been awesome. So, when I look back at my career, I hope there’s another 25 years in this awesome industry.

Ryan Lipchek:

They’re the things I think about: being part of team, hiring a team and training the team, all the different people you bring on board and in order to have the same vision, the same work ethic and have a lot of fun doing it. I look back at my career and I’ve been in a fortunate situation to impact people. And now, like I told you, every day, working with small businesses around the country, I don’t think it gets any better than that because that’s the backbone of America and that’s what it’s all about. Start a business, get better at it and make money and have happy customers, and that’s what we help our builders do.

Bosco Anthony:

What do you think are some of the blind spots that builders face? You alluded to the fact that it’s a challenging business, but what do you think are the blind spots that they should be aware of?

Ryan Lipchek:

There are so many different things. Builders are smart and they see a lot of things, but sometimes when they step back and they talk to us, they realise that some of their profits are slipping. It’s a blind spot in that they don’t necessarily have the time to ever step back and take a look at it from a 30,000 foot view of how profitability is measured and how you can increase your profitability. One thing I mention all the time is carrying costs. There are specific carrying costs of a home under construction that impact homeowners, builders, everybody; somewhere that money is going.

Ryan Lipchek:

When a builder really thinks about it, whether that number is $200 or $400 or $500 or whatever per day, there are different numbers out there depending on what numbers you factor in. But I think the last one Russell [Russ Stephens, APB CO-Founder] and I talked about was like $400 or $500 a day, and that adds up significantly. So, if you can't find a tradesman right now, you can't find labour, and they say, "Hey, I can't get there for a week," well, you're carrying that cost. Your overhead is being distributed among all of your jobs that are out there, you're foregoing other opportunities because there's only so much bandwidth your team has. So, when one job sits, it impacts on the opportunity cost of other homes. If you start thinking about that in the way that you procure materials, the way that you procure labour, when you put yourself in a position to not have to wait 14 weeks for something, to be able to wait three weeks for something, to be the builder of choice in your market.

Ryan Lipchek:

What I mean by that is have the best labour, to have the best people in that market want to work for your company, because you have jobs ready for them, they're able to make money on your job – that stuff's priceless. So not only do you save money, not only do you run your business more efficiently, which does a lot of great things for you, but it enables you to avoid specific carrying costs. I'll give you an example: a lot of these delays over recent times over the last year have lengthened time cycles of homes by say three months on a home that usually takes nine months to build, so maybe now it's taking a year.

Ryan Lipchek:

What does three months mean? Not good for you, not good for your homeowner, but start thinking about $400 a day, times three months, that adds up significantly. So, that's a blind spot that once we point that out and put some picket fence around that and show builders exactly what's happening in their world when this happens, this is bad, this is bad, and this is bad, it kind of makes builders realise material procurement is very, very important for their world.

Bosco Anthony:

Are there any other financial metrics you look at? You talked about carrying costs as being one of those key metrics that you look at. Are there any other financial metrics you look at?

Ryan Lipchek:

From a CBUSA standpoint, profit is really the big one that we look at. In any Builder 20 Club you're in through NAHB [National Association of Home Builders] or any peer group, you really want start with profit and make sure that however you go to market, whether it's a fixed price or cost plus, or however you're doing it, there's many different ways to operate your company, you need to be focused on profit. A lot of builders aren't, and there's a lot of different things you have to measure in order to get there, but that's kind of the holy grail of why we do things.

Ryan Lipchek:

If you can figure out a way through group purchasing, through better labour, through being more efficient with Buildertrend and the way that you run your company, if you can figure out a way to stabilise the profitability and not have one job here and one job way up there and then the next job down there, and then you have to make up for that because you're here. If you could figure out how to streamline that, you're putting yourself in a position of strength relative to your peers and relative to all your competition out in the market for sure.

Bosco Anthony:

Ryan, where do you think CBUSA really aids builders? Is it on the front end when you're onboarding them? Is it that sort of adoption of group purchasing? Is it that relationship after you've secured? Where do you spend most of the time, to make sure builders are being efficient with their numbers? Is it typically an awareness thing that you have to go through or is it something that they gradually get better at over time?

Ryan Lipchek:

I'd say all of that. All of the above, Bosco. I think when a building company comes on board with CBUSA in one of our existing 34 markets around the country, the first thing our operations team does is start to train that company on what our programs are, educate them on everything that we do and figure out what's good for them, what's good for their business. Whatever's good for them is good for us. We don't force builders into anything, but we have a lot of great programs. Information is power, data is power, knowledge is power. We start throwing them all this information about what we've learned over the years, what our 600 builders across the country do on a daily basis, what that building company can incorporate into their world to get A) immediate impact, and then B) to your point, if they continue to do this and this, they’re going to continue to get more and more impact from the CBUSA program on their business.

Ryan Lipchek:

And it’s all about ramping up that builder as fast as we can, but realising that change is tough, you can’t just go implementing 10 different new supply chains and new national brands into a building company. There’s some infrastructure that has to slowly adapt, and that’s the best thing about our program. I think we don’t force anybody to turn their company. In their head, every business owner, as you know, is trying to juggle family and business and the million different things that are going on.

Ryan Lipchek:

The best thing about our program is that, “Hey, look, there’s some things that you could do right away and then we’re going to show you over the coming months what else you can do so they get immediate impact.” Then over the next three months, they’re going to get a tremendous amount of impact and to the point where it’s great. Our operations team works with them; they come to their office, they work with every one of our builders, we get to know other people, their staff, their job sites, and really figure out how our company translates to them and how they could best take advantage of what we do.

Bosco Anthony:

Sounds like you’re pretty much a one-stop shop because they’re coming to you to buy the things, but I’m assuming you also are involved in them, making sure that the procured goods are shipped to the builders as well in different parts of the U.S?

Ryan Lipchek:

Part of national contracts, part of being a GPO in any industry is having the big national contracts to where you’re leveraging your purchasing power. Part of a national contract is price for sure, but there’s a lot of other components to a national contract that we’ve got pretty good at over the years that we’ve been doing this. Allocation is very important, how long it takes to get that product to a job set, by what means does it get there? What are our price locks? So, you're exactly right. All that is part of it. If you just provide a price without everything else, the delivery, the supply, all the things you need to think about, they’re the things that we think about all day, that's what we do. So, when a builder jumps on one of our programs, they can forget about it because they know that we've done that due diligence.

Ryan Lipchek:

Then they plug it into Buildertrend, the builders who are also using Buildertrend, and that's the best of both worlds because you're getting the purchasing and you're getting everything about how you run your company, you put your purchase orders through Buildertrend. That's really the holy grail of purchasing when you get this price and you're able to be as efficient as you can with that construction management software. Now that filters right into your job, it filters right into your accounting and all ends of your business start to mesh. That's when the smiles come to our faces, because we're able to help builders get a lot more efficient when all parts of their company are talking together instead of being in silos.

Bosco Anthony:

I know it's hard to have a crystal ball and predict the future, but where do you think the construction industry is evolving to, moving forward? And how is what you guys are doing helping to prepare builders for it?

Ryan Lipchek:

Well, I think from a macro level I'd say that things are going great. Things are going to continue to take off. Housing starts are projected to continue to rise. Housing pricing is very strong; it's a great way to invest your money. I think that we're in a great industry and for the long foreseeable future this is an industry that you want to invest in and be a partner in. As far as where it's going, I think technology is a huge part of where this industry is adapting. I told you earlier that the home building industry has always been a little bit behind some other industries in terms of adapting and adopting technologies and adapting to different climates. And that's good.

Ryan Lipchek:

We're strong and sometimes the tortoise wins the race at the end, but it's adapting now and there's a lot of technology coming into it. At Buildertrend, we are at the forefront of all that. We're trying to position ourselves, and Dan and Jeff and Steve are positioning our company to be the best of the best and be on the forefront of all that technology. I think, specifically, a lot of the offsite construction, things that you guys see are things that overseas, over in Australia and Europe, and this area is where houses are being built off site and components are shipped. It's just a whole new way of thinking for custom builders. I'm not talking about panelised houses for the production guys, I'm talking about full custom houses where a lot of components are not built on the site.

Ryan Lipchek:

I referenced that earlier about how this is an awesome industry because you take 40,000 pieces, throw them out in the mud and let's build a masterpiece out of that. Well, BMWs are not built in the mud, they're built in a factory and there's a reason for that. It's a lot easier to get a consistent product from a factory and then ship it out to the homeowner instead of building the thing in the mud. But there's a lot of technology. I think as we continue to watch what's happening in our industry, using technology in the way that everybody does everything is going to be really cool. I think the gains we're going to see in the next 10 years are going to surpass the gains we've seen in the last 50, and that's going to be fun to be a partner.

Bosco Anthony:

Ryan, I'm going to ask you a question because one of the things that APB loves is transforming builders into better sales people, and business development and sales are your forte. What advice would you give a builder who is on the fence or doesn't necessarily feel comfortable with doing the whole sales pitch? What's the best sales advice you can give a builder out there?

Ryan Lipchek:

Ooh, I like that. I train salespeople; I've been a salesperson for a long time. And I like talking to builders about selling. It's not exactly what we do, but everybody, every home builder is always selling somebody on something. They're selling their homeowners buying from them. They're selling their subcontractors who are working for them. They're selling employees buying into the way that that builder does things. And specifically, when it comes to homeowners buying a builder’s home, first – and this is something we always recommend – tell them you’re part of CBUSA, tell them you’re part of the biggest network of builders in the United States. That means great things for that homeowner because they’re going to get the best products for the best possible price put in their house built by the most efficient technology – Buildertrend CBUSA. I always lead with that.

Ryan Lipchek:

For a builder who is not part of our network, I think gaining the trust of the homeowner is the most important thing for any good sales person in any industry, but especially in the home building industry. There are some bad apples out there, but I think that’s changing. Some home builders have given the industry a bad reputation, because they don’t finish jobs, their pricing doesn’t come in how they say it’s going to, the old contractor walks off the job and you’re not getting any warranty once he pulls out, all that type of stuff. So, the cream of the crop builders, the ones who separate themselves from everybody else in the industry are the ones who sit down with homeowners, gain their trust and tell them, "Hey, this is what I'm going to do for you."

Ryan Lipchek:

Then they communicate all the way through. If you could talk to a homeowner at the beginning, “Buy from me because not only am I going to build you a great house, but you can trust me to do what I say I'm going to do, on time, the first time, all the time, and we're going to communicate. When something goes wrong, I'm going to tell you and we're going to look at it – and something's going to go wrong. That's why you pay me.” 

Ryan Lipchek:

If nothing else went wrong, homeowners wouldn't need to hire a builder because they would just do it themselves. But builders navigate all those different issues, challenges, delays, permits, trying to do all these things with all these people. Trust, earn the trust and you'll get to sale – and it can't be fake trust. The only way you're going to earn people's trust is by doing right, having great references, having great people out there who have built your homes before and sit down and talk to people honestly. So, there you go.

Bosco Anthony:

It sounds like you have to be having a good delivery as well. And I think that's where your confidence with CBUSA comes in, because it sounds like you guys deliver on that end as well. I'm going to end with one final question because I feel like I could chat with you for days; we've had a really good chinwag, as they say. But what advice would you give a younger version of yourself and what advice would you give a new builder who's trying to make it big?

Ryan Lipchek:

Well, if I'm giving advice to a younger Ryan, I'd say it's be humble, be humble and kind. Tim McGraw's song is one of my favourite songs out there [Humble and Kind]. Every conversation you're in, listen, be a great listener and I think be humble and listen and really, really master that skill. I think my favourite people to talk to are the ones who listen. They're not thinking about the next thing that they're going to say when you're talking, they're actually listening to what you say. I think that's the key to sales, that's the key to a lot of different things in life: be a great listener. So, that'd definitely be the advice. I think I've learned that over the years and if I could have talked myself into that when I was 21 or 22, I think that would’ve been even better.

Ryan Lipchek:

Then advice that I give to builders who are starting out, obviously get Buildertrend and CBUSA right away. So long as you could do those two things and from a macro deal, run your organisation professionally, efficiently and with profitability in mind. That's how you'll have staying power; that's how you'll make customers happy. Do the right thing every time. Customer service is the most important thing you can have. Don't try to cut corners – they always come back to bite you. And have fun doing what you're doing, I think that'd be my most important advice. You know what? I'd give myself that advice too, I'd give myself that advice and young builders and anybody going into anything.

Ryan Lipchek:

I tell my son who just graduated from high school, “Find a job you love, something that you have fun doing, that motivates you, that you feel like you're making a difference in people's lives in the world and you can't go wrong. That'll be a job that you'll want, or an industry you'll want to be in for the rest of your life.” So that would be it.

Bosco Anthony:

Words well said, my friend. Well, listen, Ryan, we really appreciate you being on here today. Thank you so much for your time and your energy as always. We appreciate you as well.

Ryan Lipchek:

Hey, I wouldn't want to spend the last half hour with anybody but you. Good luck with everything you're doing. Thanks for your time, Bosco.

Bosco Anthony:

Thank you for listening. Remember to subscribe to Professional Builders Secrets on your favourite podcast platform and leave a review. To learn more about how the systems at APB can help you grow your building company, visit associationofprofessionalbuilders.com. See you next time.