Episode 27: How To Remain ‘Booked Out’ For 12 Months With Russ, Sky & Andy

In episode 27 of the Professional Builders Secrets podcast, we’re joined by Co-founders of the Association of Professional Builders Russ Stephens and Sky Stephens, along with APB’s Head Coach, Andy Skarda. Throughout this episode, the trio discuss how builders can manage the ever-growing jobs they undertake.

During this episode, Russ, Sky and Andy delve into the reasons why builders struggle when juggling multiple jobs at once in the first place, and share the secret weapon builders can utilise to manage more than one project at a time, construction slots. 

The trio explain why builders like yourself need to implement this concept into their building company and explains the clear difference between a builder that uses construction slots vs one that doesn’t.

Throughout episode 27, Russ, Sky and Andy also uncover the process of how builders can best use construction slots, as well as where you can expect to see the results it brings to your building company.

Listen to the full episode to discover the best ways to manage, optimise, and prioritise your construction slots year after year.

 

Russ Stephens - Co-founder

Russ Stephens is a Co-founder of the Association of Professional Builders, a business coaching company dedicated to improving the residential construction industry for both builders and consumers. Russ is a data analysis expert who has introduced data-driven decision making to the residential construction industry. Russ is also a proud member of the Forbes Business Development Council.

Connect with Russ

 

Sky Stephens - Co-founder

Sky Stephens is a Co-founder of the Association of Professional Builders, a business coaching company dedicated to improving the residential construction industry for both builders and consumers. Sky is a proud member of The National Association of Women in Construction and she was also recognised as one of 2021’s Top 100 Women. 

Connect with Sky

 

Andy Skarda - Head Coach 

Andy Skarda has owned and led businesses in South Africa, the United States, South-East Asia, and for the last decade, Australia. With 30+ years of business experience, Andy heads up the coaching team at the Association of Professional Builders (APB), helping business owners in the building industry identify and implement the skills and systems they need to be successful, without needing to go back to school or more importantly, without going bust.

Connect with Andy

 

Timeline

1:30 Why builders struggle when juggling multiple jobs at once.

3:43 The secret weapon to managing more than one project at a time.

6:25 Is there a risk to this concept?

9:14 So what is the ‘construction slots’ concept?

12:49 How construction gives you authority, authenticity and professionalism.

14:55 A builder that uses construction slots vs one that doesn’t.

17:57 The process of using construction slots.

22:55 Where you’ll see the effect of using construction slots.

30:34 Why builders need to implement this concept into their building company.

35:11 How long does it take to see the results of using construction slots?

 

Links, Resources & More

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 the Association of Professional Builders (APB) for building company owners, general managers, VPs and emerging leaders. Here, we discuss all things running a professional building company, from sales processes to financials, operations and marketing. Welcome everyone to another exciting episode from the Professional Builders Secrets podcast. I'm joined today by Co-founders Sky and Russ Stephens, as well as Head Coach Andy Skarda for APB. Thank you for joining me today. I’m excited to be speaking to you all.

Russ Stephens:

Hey, Bosco.

Sky Stephens:

Hey, Bosco. Great to be here.

Andy Skarda:

Hey, Bosco.

Bosco Anthony:

I've been dying to ask this question, because I've been on this amazing journey, getting to meet all these different builders from different parts of the world. You've got this amazing network and all their stories are so inspiring and transformative, but there's this question that's been fuelling my curiosity for quite some time now. That question is, how do these construction builders juggle multiple projects all at the same time and do it without batting an eye?

Sky Stephens:

I can answer this facetiously right now and say I have no idea because this takes serious work and serious skill. It is one of the hardest jobs I could imagine doing.

Andy Skarda:

I think to back Sky up, I would say, “They don't.” The bulk of them are batting a lot of eyes to try and keep this whole process running. So, to answer your question about how they do it without batting an eye, unless there's some serious planning and experience behind what they're doing, they are batting eyes continuously.

Bosco Anthony:

Right.

Russ Stephens:

It's a real challenge, isn't it? Because when you're in business, you want to service those sales and deliver that service as quickly as you can, pull the revenue in. The trouble is in this industry, it all comes in at once. It's feast or famine. That's a real challenge for builders because no one likes to turn down work. But when we say yes, we end up with these big bulges in the funnel.

Bosco Anthony:

Why is it so hard though? I mean, I have a hard time managing projects, but from a builder's perspective, why is it really difficult?

Sky Stephens:

What makes it the hardest for running a building company is exactly what Russ just said. It comes in like a feast or a famine. So the way project management can just get all on top of you and be so difficult is when everything's happening at once. It's Murphy's law. When it rains, it pours. What can happen is you can generate all of these leads or get so much marketing and you end up starting all of your projects at the same time. You might be running five projects, even 10 projects at a time. Let's just say five projects at any one time and say they're all at the same stage. That is an absolute nightmare when you are trying to get crews to go to all different projects, and they're all supposed to be there at the same time. That's an absolute nightmare.

Sky Stephens:

Can you think about it when you've got all those handovers all at the same time? Handovers are such a big part of the process and you want to do them well, that's where it becomes an absolute nightmare. So why is it so hard or what makes it so hard? It's when multiple projects are at exactly the same stage when that's not what you're geared up for; it's too much.

Bosco Anthony:

Sky, are you going to tell me how you can make this easier for a builder?

Sky Stephens:

I hope so. Look, the most professional builders in the industry manage this and they manage it really well. And it's because they have a system. They've got systems for everything: on site, actually managing the projects, actually scheduling the projects and everything leading up to doing the projects. You can probably handle one project at a time in your head, maybe even two, but the second you get to three or more projects on the go at any one time, it becomes very confusing. So this is where professional builders actually lean into systems at every part of the process.

Bosco Anthony:

How did you all discover that this was going to become a significant challenge for builders? Was this something you picked up on the front lines, from speaking to them, interacting with builders as well?

Russ Stephens:

I can remember the exact moment it came in one of our boardroom meetings. There were about six or nine building companies that would fly into the Gold Coast every 90 days. We would take a real deep dive into their KPIs and really dig into their businesses, uncovering the challenges and the problems. By working closely with these builders and really digging deep, we could see that this obviously was a problem that we were all very aware of, but we could see the effect that it was actually having on their margins, because a building company works well when the funnel is optimised. By that, I mean, everything is balanced and working nicely. When you get these bulges in the funnel that we've just been describing, any part of the funnel, whether it's the start, the middle or the finish, then you're not operating efficiently.

Russ Stephens:

We speak to many builders who find themselves with four or five handovers all in the same small window of time and it puts an enormous stress on them. That means they don't deliver the client experience that they want to deliver. And when they get that same situation at the front end, they have slabs being queued or framing being delayed because they've got one or two carpentry crews and they're having to do their jobs sequentially. It became very clear that creating a balance funnel was what this industry really needed. That was really how we discovered this concept, this idea, and introduced it to builders.

Bosco Anthony:

So with the concept and with the planning, do you end up risking losing money or pushing money away? Because it sounds like at some point you have to make a choice to either prioritise the business or the client's needs, or is there a fine line between the two?

Andy Skarda:

Bosco, I think that really depends on the business and where it is in terms of its development and its evolution. I think back to when I lived in Singapore for five years. I loved eating in the food courts, which are multiple kiosks in one place selling different types of food. The interesting piece was there were some of those kiosks that were completely empty. Nobody was near them. And then there were others where the queues were around the block. It's one of those things that, as human beings, we tend to look at the full restaurant and the empty restaurant, and we'll go and stand in a line because that scarcity generates an impression of professionalism and if all these people want to eat that food, then it's got to be good.

Andy Skarda:

This is pretty much the same thing. Our clients often are hesitant when we propose this process to them, and they then step out there and take the risk and say to somebody, "I cannot start your project for nine months," and they hold their breath and cross their fingers and their toes. Then the client says, "That's okay, I'll wait." The client realises that they are dealing with somebody who’s professional, that they are organised, they've got things in line, they can tell clients exactly when the job will start, when it'll finish and walk them through that process. That gives the client a lot of confidence in their builder's ability to deliver that project and to deliver it on time.

Andy Skarda:

So, in fact, we see the opposite. We see in most cases that when this is properly planned and implemented, people end up with relatively long runways of work committed, which obviously then gives them consistency, ongoing cash flow, profitability margin, et cetera.

Russ Stephens:

This was a real added bonus because we were trying to solve one problem, and that was to create a balanced funnel. The solution that we came up with for that problem was the idea of construction slots, and by staggering the start dates, we could actually stagger the whole construction funnel and keep it balanced. But the added bonus of that was that it didn't just help with delivery and increasing margins through optimising resources, but it also created that thing that every business needs in order to sell, and that’s scarcity and urgency. And that's simply because a slot can only be allocated once a contract has been signed and the deposit has been paid.

Bosco Anthony:

Is this terminology that was invented by APB? Is this something that people actually know? Is it an industry recognised concept? And more importantly, tell me a little bit about this concept. Is it software, a technique? Is it a bit of both?

Sky Stephens:

It's definitely not software. I probably wouldn't call it a technique. I'd think of it as a concept, maybe even a way of life. But we coined the term ‘construction slots’. Did we invent the idea of planning? No, of course not.

Bosco Anthony:

Sure, we did! It was a Tuesday morning when we invented it.

Sky Stephens:

Absolutely, absolutely! The idea of planning and scheduling out when your work can start, is that super profound and new? No. However, does every single building company do this? No. So we started talking to more and more building companies about this concept and then all the rules around it, because I think this is what makes construction slots make or break, it's the rules and how you play that game because your planning is either going to work or it's not depending how you roll out these construction slots.

Sky Stephens:

I remember when we first started introducing this concept to a select number of builders who are really quite professional, really systemised. It was that moment, wasn't it guys? They said, "Yeah, of course. Of course, you'd plan that out in the year. Of course, we know how many projects we'd want to start and when." But the profound thing was, "Okay, schedule it. When exactly are all of those openings?" And then, if two people want an opening and there's only one, you're only allowed to start one. They get allocated to the next one. And that's when it became interesting. 

Sky Stephens:

That's when they said, "Okay. There are some rules to this." And this is exactly how we can introduce that genuine scarcity and urgency. It helps us on the selling side, but it also gives all of those benefits that everything else is staggered in stages. Every other stage of the construction side throughout the projects is just well balanced after that point.

Russ Stephens:

You asked, is it software, is it a technique? One thing it is, it's a mindset, because this has to be used with integrity because you can't buckle. Once you set out your plan like Sky described and you allocate your start dates, they have to be set in stone, because you're always going to have people who say, "Well, I want it to start on that date. And if I can't have my job starting then, I'm going to pull out." There will be a temptation to buckle, but you cannot buckle because you lose your integrity the moment you do that. An integrity mindset is a very important part of the whole construction slot strategy. Not protocol, strategy.

Andy Skarda:

Yeah. I was going to say protocol, but anyway, pick a word. I think the other thing, Russ, that's critical here is it allows a lot of our members to not feel like they are lying to clients to create urgency. I love watching their faces when I say to them, "So how many builds can you actually start this year?" And they say, "Oh, eight." And I say, "It's not unlimited?" "No, no, no. I can only start eight." Well, doesn't that make it the truth when you say to a client, “I have limited build slots available”? At which point you can see that light bulb come on. Actually, yes, it is a limited resource. “I don't have an unlimited capacity to build. I can only build this number or start this number in the next year.” And that gives them a lot of confidence in that selling process again.

Sky Stephens:

And a lot of control, too.

Andy Skarda:

Yeah.

Sky Stephens:

Because suddenly it backs you up in the background and then you have a lot of control over what you will and will not tolerate and accept in that process.

Bosco Anthony:

It sounds like what you're talking about is authentic honesty as well.

Andy Skarda:

Yeah.

Bosco Anthony:

I find this a really fascinating concept as well, because at the end of the day, I thought maybe the clients would be pushing away from it. But it sounds like what you're trying to do is actually build trust and credibility as well from this particular concept because of that honesty.

Andy Skarda:

And professionalism. When people see that it's planned to that degree, it lends authority to the builder as well, which is obviously an added bonus.

Sky Stephens:

It's a benefit to the clients too, because it's so easy for any professional builder to explain why they have these slots, why they have these construction slots throughout that calendar year and what's upcoming and available. As the builder, you have every single reason ready as to why. It's so that you know when your finish date is. It’s so that all of your projects are staggered so that you only manage X number of projects at any one time, so that you can give the clients and their home the attention they deserve and should get so that they have the best experience possible. It truly is a win-win for the client. They're going to get everything they want out of it. And running a professional building company is going to be so much more enjoyable.

Russ Stephens:

It's interesting, isn't it? I think we've all experienced those sales guys who are just extremely good at selling. They're natural and they don't even appear to be trying. They'll say things like, "Hey, if you're interested, let me know,” or “Let me know if you're in," and that kind of thing. They really seem to put minimum effort into selling and they have a queue of people who trust them and can't wait to get signed up. But really, it's all about the work they put in on the front end to limit the availability, to create that trust and demand and they just make it look easy.

Bosco Anthony:

You talked about this concept being adopted obviously by the members who are part of APB. How can you tell the difference in signs from a building construction company that actually applies this concept versus a company that doesn't? Do you have any examples that you guys could give us a snapshot of?

Russ Stephens:

The perception from a consumer's point of view would be perceived value. As a species, we all desire scarce resources; we perceive value that increases whenever the resources are limited. From a builder's perspective, not only does it help with conversion – because of those factors that we've introduced, scarcity and urgency – but it also helps with the margin. So the big difference and the telling signs between a construction company that applies construction slots versus one that doesn't is their margins and the fact that they're booked out well into the future with those high margins.

Russ Stephens:

There’s another little bonus as well. It then gives the builders the confidence to disqualify and reject those clients they don't want to be working with, because they are booked to out so far in advance and they're constantly increasing their margins. They spot these warning flags straight away, and they've got the confidence to disqualify those guys who are maybe just looking for the cheaper pricing and maybe guide them towards a builder who might be a better fit for them.

Sky Stephens:

That’s such a key word though, ‘booked out to a certain date’, because builders who don't use construction slots, like Andy was talking about before, are too afraid to make people wait for too long. I think everyone gets nervous about that the first time. But professional builders who use construction slots know when their next available start dates are. So they book them so much further ahead and in advance rather than letting themselves get into that feast or famine. “I'll start whenever you need me to start. When do you want this project to start? We'll work around you.” Unfortunately, that happens way too much in this industry, and it's what delivers poor experiences and horrific scheduling nightmares for the builders.

Andy Skarda:

You asked that question, Bosco; you said, “How do we tell?” They lose that haunted look. The builder who's trying to do everything for everybody on the client's time schedule and keep 900 plates spinning isn't sleeping well, is working 90 hours a week and probably isn't making any money on any of those things because of it. That's how we tell the difference. Actually, they're sun tanned and relaxed and they look cool.

Russ Stephens:

If you want to see this in action, you just walk into any designer brand store and look what they’ve got on the shelves. In terms of handbags, they're absolutely minimal, aren't they? There is so much available selling space that's just going wasted. You might think, "Man, this is a missed opportunity." But no, these guys know exactly what they're doing.

Sky Stephens:

So that's a tip for everyone on how you get the handbags. They're all in the back. So you have to talk to the sales consultants.

Bosco Anthony:

So this is intentional, but walk me through an example here. Let's pretend I am a customer and I'm dealing with a builder. Take me through a construction slot concept; and how does that interact with my psyche?

Sky Stephens:

Well, first of all, let's go from a builder's perspective, because the question I think becomes, “How do I work out my construction slots?” Because you need to look at what's been happening and what you actually can handle, and then you need to look at the year ahead of you. So first of all, when you're planning out your construction slots, you’ve got to understand that you have to make plans on averages. The first thing you need to do is work out your average contract value. 

Sky Stephens:

I'm just going to pull out some numbers here, but you should use your own. Say you built five homes last year and that your total sales revenue last year was about $4 million. That means your average contract value is $800,000. Yes, some jobs may have been bigger. Some of them may have even been a little bit smaller than that, but it's important for this exercise that you average things out for planning purposes.

Sky Stephens:

Then you need to work out on average how many weeks it takes to complete projects of that size. Then you just want to keep that information handy, because that's where you put that information in your construction slot planner and forecaster, when you're looking at a calendar. Obviously, it's like the investment disclaimers that you hear, “Past performance is no guarantee of future results.” Sure, but it honestly is the best way to find a forecast. 

Sky Stephens:

So, if you're not working on implementing anything new, for example, investing a lot more heavily into advertising and staff and software and scaling, then work that you've done previously is really going to help you if you can just plan that out for next year, if you're trying to do the same. So take into account your situation. But in this example, we'll just go with five new homes you've built and revenue was $4 million. You've got an $800,000 contract value and you've worked out how long each of those projects takes on average.

Sky Stephens:

Then you want to ask yourself a couple more questions about the year that you're trying to plan. So how many contracts are you actually planning on signing? How many jobs can you comfortably run at any one time? This is a really, really important question to ask yourself. What do your resources actually allow you to do? And then another big question is, what are your shutdown periods? Think of Christmas, think of Easter, think of summer. If you're in North America, what are the big vacation periods that actually affect your business? Because you want to be planning around that.

Sky Stephens:

As an example, let's just say you've taken a really good look at your plan. You've asked yourself those questions. How many contracts are you planning to sign? For this example, the answer is five in the next 12 months. You also know that ideally you don't want to, if you don't have to, you don't want to start projects in December. You don't want to start projects in January, say. That then leaves you 10 months out of the 12 months in that calendar year. So suddenly, you don't have 12 opportunities to start these five projects, you've got 10. So you’re then thinking, "Okay, I need to spread out those start dates over those 10 months."

Sky Stephens:

If you're planning to sign five contracts in the next 12 months, you can have a construction slot every second month. That allows you to see, "Okay, how many are going to be on the go at any one time? Where are all of my handover dates and where are all of my start dates?" Then, as you’re looking at that calendar, you want to be looking at what that is coming into contact with. Certain national holidays – what's going to derail this plan? 

Sky Stephens:

It's a really simple concept and it's just about sitting back and looking at a plan and seeing when that can happen. That was a really simplified example as well, because the bigger the company, the more projects you can do in a year and the more projects you can handle at any one time. You will be having multiple start dates in a month so you will be having multiple handovers at any one time as well. This is where you can get into a muddle quite quickly, and that's why a visual planner is important and why this whole concept becomes just too important to miss.

Andy Skarda:

That's right. But to add to what Sky just said, there are two things that are critical in this process. One is weather. There are certain parts of the world where our builders are that they cannot build because of snow or ice or whatever for a couple of months of the year. That's number one. Number two, we've got the C word running at the moment that is hitting every single builder. Now, I don't know when people are going to be listening to this, but I'm naturally referring to COVID and the supply chain problems that that is bringing. For every builder who does not have their start dates planned and their construction schedule worked out, they are in a flat spin at the moment. To try and juggle those factors on top of a lack of sequential steps to get people to the end of their builds, it's absolute insanity at the moment.

Bosco Anthony:

So, it's a bit of capacity planning and a bit of communication as well from both sides. That sounds like the DNA of this fabric when you talk about this concept. Now, you all know from my previous podcast interviews, I'm a data nerd and I love metrics. So I'm just curious here, enlighten me and go with the flow, but how does the use or the absence of this particular concept show up in business metrics for building operations?

Andy Skarda:

I think we've all mentioned it to some degree already, it's feast or famine. You'll see it happen in literally every part of the business, because whether you’re talking revenue or you’re talking profitability, or you’re talking ratios within the business, if you do not have consistent minimal cashflow running at all times, you are going to have periods in the year where you are in a cashflow squeeze, you don't have enough money to cover the outgoings, those kind of things. 

Andy Skarda:

So the positive effect of this is that you're able to set up your construction process. Think about it: you can't invoice until you've built. So the reality is, it's building whatever you are building that gives you the ability to issue the invoice and then get paid. Essentially, by planning when you are going to build, you are then also planning when you are going to invoice. That is then going to reflect when you are actually receiving payments and able then to run your business from a financial perspective.

Andy Skarda:

The fact that it's planned then reflects into margins. Because if you know when you’re building, you get economies of scale. You’re able to optimise your subcontractors and your suppliers' delivery dates. You’re not storing materials for long periods of time. You can have them delivered to site the week before you need them. So the ripple effect of planning when construction starts and then the ongoing forecast of that build schedule mean it'll literally show up in every single data metric from a financial perspective.

Bosco Anthony:

What you mean by that is you're going to see gaps in the cash flow specifically with certain areas?

Andy Skarda:

You're not going to, if you do this exercise, as Sky explained it properly. You're going to negate those completely. You will have consistent cash flow throughout the year. And that's what you're looking for, obviously.

Bosco Anthony:

So tell me a little bit about the insights for builders who are applying this concept within the membership as well and the people you work with on a day-to-day basis. Do the operations look the same with all builders applying this concept? What's the biggest insight that you have seen working with builders applying this concept?

Sky Stephens:

It's exactly what Andy said. I would say profitability, just to really emphasise that point. The reason it increases profitability, when you can implement construction slots and implement them well, is because you're not having to source additional resources, which firstly, are probably not going to be as efficient as your regular teams. Suddenly everything's up to the same stage. You need to source additional workers so that things can actually get done. They're either not going to be as efficient as your regulars, because they're just going to take more of your time to brief or even just monitor or their rates are substantially higher because they're not getting consistent or even regular work from you in the first place. So it truly comes down to that bottom line, profitability. Secondly, if you look at the other side of the coin as well, you just have happier clients.

Russ Stephens:

I think a great story that was shared with us comes from Rocky at Vision Homes in West Virginia. A great story that he shared with the team was about the day that he went in to see his lawyer. It was round about the time of the elections in the US, just over a year ago now. The lawyer was saying to him, “How do you think this is going to affect you? And how many jobs do you actually end up quoting and doing all that work for that never go ahead?” Rocky said to him, "Well, prior to July this year, it was a lot. But now, we only build for the clients we want to build for." So naturally the lawyer said to him, "Well, what changed in July?" He said, "That's when we introduce construction slots." That's how powerful this strategy is. It transformed Rocky's business.

Bosco Anthony:

Russ, do you get a little bit of hesitance from builders when you introduce this concept? Is there any fear that comes across, or do you find them really adaptive to trying this particular process? Because like you said, it's a mindset shift in many ways, too. So my experience with most mindset shifts, there's some form of hesitance sometimes.

Russ Stephens:

In my experience with the guys that I've worked with, I haven't experienced any hesitancy at all, but I think Andy is probably the best person to answer this. What have you seen, Andy?

Andy Skarda:

We've discussed this on a number of different podcasts. A lot of the builders who come to us are in that place where they are transitioning from being builders into becoming business owners and leaders. The truth is, this is part of that process. Obviously, what we do with them is we start to introduce planning, leadership, organisation, control and systemisation throughout the business. 

Andy Skarda:

In this podcast, we've zeroed in on the construction slot discipline specifically, but it's really part of the suite. It's part of the deck of cards that we at APB have developed, and it fits beautifully. It dovetails into everything else that we are teaching them. So generally speaking, because of the quality of the way we explain these protocols, the training programs that we have available, we give the builder everything he needs in order to make that mind shift or mindset change significantly easier.

Andy Skarda:

Is there some trepidation? Absolutely. It's on a broader scale though, because in a lot of cases, people are realising they have to turn down some work, because they don't have unlimited capacity. But once they've actually implemented it, as Russ has shared with the story from Rocky, it gives them incredible control and freedom to run the business on their terms. When they start to experience that on top of better profitability, et cetera, they never ever look back once they've got it running in the business.

Sky Stephens:

I’ll tell you where I think we may even get the most pushback, it’s when we introduce this strategy. It's when it's introduced to an already pretty successful building company, and they actually didn't raise this as being a problem in their building company. This building company wasn't actually complaining that they weren't as efficient as they could be. They're actually thinking everything was firing really well. These concepts are so important for us to share with building company owners that we will still walk them through. And this is ideally what a professional building company does.

Sky Stephens:

I think when we introduce it to quite successful building companies, there's maybe a little bit more scepticism, thinking that they don't need something like that, but of everyone who has introduced construction slots and stuck to the rules and been able to actually use urgency, scarcity and see the profitability come through because of it, no one's regretted it. But I think they'd probably be the most sceptical. When you are realising something's not working, you're actively looking for a solution. A lot of builders are at that point that where they're saying, "Yep, let's try it."

Russ Stephens:

There really is no downside, is there, to using this strategy? It's all upside. It's potentially increased margins, and it certainly helps with getting procrastinating clients across the line.

Sky Stephens:

I think one thing we would get quite a bit is, "It could upset my clients too much. They want me to start on this day. I can't introduce something like this." And I think what Russ just said is perfect. There is no downside because that client is taking way too much control from the beginning. That sounds like it could end up being a little bit of a nightmare project. You can actually take control from the beginning, by giving them two options. “When would you like your start date? The 4th of July or the 7th of August?” You get to take control of when those opportunities come.

Russ Stephens:

It helps position the builder in a way that we have campaigned for over a long time now as a professional, as a leader. The builder is the expert. The builder needs to be the leader on this project and call the shots. That's not being a dictator or being unreasonable with the clients, but it's just showing leadership, expertise. The builder has been through this before. They know the best way to run and deliver this project, not the client.

Bosco Anthony:

I guess the other thing I've just thought about as well is wouldn't this also share some insight to indicate to a builder when it's time to grow? If you think about it, you were talking about capacity planning and everything else, and it just hit me right now, if I can only fill two slots at any given point and business is great, wouldn't this tool actually create awareness to think, "Maybe next year we need to get more people on board?"

Russ Stephens:

One hundred per cent, Bosco. This becomes a very important part of the business plan because each year our clients set their plan out for the next 12 months as well as a high level plan for the next three years. And you're absolutely right. If you're planning to grow, then you have to update your construction slots. That does force you to look at how many projects you can handle at any one time. This will be a key factor in your fixed expenses, as to what you can cope with. 

Russ Stephens:

Then you really want to be nudging the top of that all the time to get a maximum return and keep your fixed expenses ratio down. So yeah, you're absolutely right. It does help you with making that leap. You probably don't want to add one or two jobs. To optimise your fixed expenses, you might want to be adding four or five jobs in the coming 12 months.

Bosco Anthony:

So not only is it a strategy or a concept, but we're also looking at this as a projection tool in many ways, too?

Russ Stephens:

A very important part, yeah.

Andy Skarda:

I think it's important builders understand you're not just projecting construction activity. You are projecting human resource utilisation, you're projecting cash flow. You're projecting profitability. All of those things come from getting this side of your business correct. I've even seen it go the other way. That when we've applied construction slot planning in a builder's business, they've realised that they actually have capacity they weren't using. That puts them in a position where they can sell into that additional capacity without increasing their overheads, and they can maximise the return on the investments that they've made historically. So really, as Russ said, there isn't a downside. There literally is nothing that we've been able to come up with that makes this not a good idea.

Sky Stephens:

Maybe the fact that it takes a little bit of work in the beginning. That's maybe the worst thing I can think of.

Russ Stephens:

That's all done for you, isn't it? Inside the portal. It's all mapped out for you.

Andy Skarda:

Yeah.

Sky Stephens:

You can use a good tool, yeah. You're literally there just calculating your averages and inputting when you would like to start projects and then versus when they're booked.

Andy Skarda:

I think Sky just said something that we mustn't gloss over. She used the word ‘like’. This puts a builder in a position to be able to decide what he wants to do, how he wants to run his business instead of the other way around. The tail is no longer wagging the dog. He is actually deciding what he's going to do in 2022. Proactive, not reactive, which makes a huge difference in a building business.

Bosco Anthony:

How long does it take for builders to see the results happening? Is it something that happens very quickly? Is it something that can be easily manage? Is it hard work at the start and then it gets easier over time?

Russ Stephens:

In terms of sales, a builder will see positive results immediately and that's because they've just introduced scarcity and urgency into their sales process. It’s key and it's like flicking a switch. We've seen with guys that it transforms their sales process, but in terms of optimising their construction cycle, to get the full benefit, it will take a full cycle. By that, I mean, jobs coming in at the beginning of the construction slot planner and making their way right through to the end at handover. 

Russ Stephens:

It's only when those jobs that have come in when construction slots have been introduced then reach the end of the construction slot cycle, that they're going to see the full benefit of this strategy and their construction funnel, but they will get a partial benefit right at the beginning, at slab stage, because they won't have slabs queued. 

Russ Stephens:

At the framing stage as well, because they're going to have a more balanced funnel where they won't have to bring in an additional team of carpenters or queue the jobs because their teams can only work on one project at a time. So, there are immediate benefits before even the first job enters the construction slot. In terms of sales, there are the early benefits of the jobs going through the early part of the construction. The full benefit does take time, but hey, it makes a massive difference.

Bosco Anthony:

Well, it's interesting, because we went into this with planning at the foresight, but we came out of it with some forecasting tools as well. To quote a very famous president, I think the quote goes: “If you fail to plan, you're planning to fail.”

Russ Stephens:

One of our favourites.

Andy Skarda:

Yep. 

Bosco Anthony:

Well, I want to thank you guys for adding to my university degree in the construction sector. Every time I hang out with you, I end up walking away with a lot of information. Any final words of wisdom from all three of you?

Andy Skarda:

I'll go with my usual one from Nike: just do it. There is no downside. There really isn't. If you're driving in your truck or your ute and you're wondering what this APB thing is all about, jump online, sign up. We've got all of this stuff waiting to really transform your business and your life. Just do it.

Sky Stephens:

I'd probably say the same, actually. If you were to pick anything to implement from anything you've listened to on this podcast so far, of everything, I would probably say construction slots are the easiest to get started with now. If you want that quick win, just map out your calendar for the next 12 months and then map out what your capacity is, do some real capacity planning, which makes your forecasting a hell of a lot easier as well. So yeah, just do it. Just implement those construction slots.

Russ Stephens:

Professional builders use construction slots. That's all I'd say.

Andy Skarda:

Yeah.

Bosco Anthony:

Thank you for the tools, the resources and the insights as always.

Sky Stephens:

No problem. Thanks for having us.

Andy Skarda:

Anytime, Bosco.