Episode 58: I Thought APB Was Lying To Me With Sam Swartz
In episode 58 of the Professional Builders Secrets podcast, we’re joined by Sam Swartz, President and Owner of True North Custom Homes. Throughout this episode, Sam explains what has shaped his business over time, the importance of constantly evolving and how APB’s mentoring program has helped his business grow.
Episode 58: I Thought APB Was Lying To Me With Sam Swartz
In episode 58 of the Professional Builders Secrets podcast, we’re joined by Sam Swartz, President and Owner of True North Custom Homes. Throughout this episode, Sam explains what has shaped his business over time, the importance of constantly evolving and how APB’s mentoring program has helped his business grow.
Show Notes
Transcript
In episode 58 of the Professional Builders Secrets podcast, we’re joined by Sam Swartz, President and Owner of True North Custom Homes. Throughout this episode, Sam explains what has shaped his business over time, the importance of constantly evolving and how APB’s mentoring program has helped his business grow.
Inside episode 58 you will discover
- How mistakes, best and worst clients helps shape a more well rounded business
- Why you need a strong building company narrative that clients will remember
- Why Sam thought APB’s mentoring program was too good to be true and what compelled him to join
- How to find the confidence to start selling at higher margins
- The importance of future-proofing your business for the long term
- And much, much more.
Listen to the full episode to uncover why Sam thought APB’s mentoring program was too good to be true, what compelled him to join, and the impact mentoring has now had on his business.
Sam Swartz - President and Owner of True North
Helping clients build comfortable custom homes they can feel proud of is paramount for Sam Swartz. He focuses on homes that are built right, and built right the first time. It is Sam’s business and project management acumen that sets True North apart. His eye for detail and firm process of only selecting the perfect craftsmen for each homebuilding project results in custom homes of superior quality.
Timeline
1:33 About True North
3:15 How to leverage your best and worst clients
14:24 The proven system to generate higher margins
21:02 Future-proofing your business to secure longevity
26:40 APB’s private mentoring program
Links, Resources & More
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Sam Swartz:
What you do with the small details is just as important, if not more important than the big ones.
Sam Swartz:
The red flags are different, but you just have to be paying close enough attention to see them
Sam Swartz:
Our margin's up 250% since signing up with Eric's help.
Sam Swartz:
You have to spend money to make money, right? You have to invest in yourself.
Sam Swartz:
Building the house isn't the hardest part. It's running the business.
Sam Swartz:
A 70-hour working week is not sustainable. It's not healthy.
Sam Swartz:
We're going to do it right and we're going to do it right the first time.
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. We have another exciting episode from the Professional Builders Secrets podcast. I'm joined today by Sam Swartz, President and Owner of True North Custom Homes. Sam, thanks for being here today.
Sam Swartz:
Absolutely. Thanks for having me.
Bosco Anthony:
Well, Sam, tell me a little bit about True North and what you specialise in and tell me a little bit about yourself.
Sam Swartz:
I appreciate the opportunity to be on and be on with APB. I'm a small custom home builder here in Lincoln, Nebraska, in the middle of the US. When I say small, that was the plan when we started, but right now we have about 18 to 20 projects going on at any given time, building mainly custom single family homes. But we also have rolled out a line of high-end town homes in the last six to nine months as well, too. That's the main focus right now.
Bosco Anthony:
I've been to Nebraska, so I actually know where you are. For our listeners out there, I'm sure they'd be fascinated to learn a little bit about Nebraska as well. But how did you get started in the industry? Was this an accidental career or did you know at a very young age that this was going to be your purpose in life?
Sam Swartz:
No. In high school it was my first job. In my junior year in high school I started as the low man, making a minimum wage for a remodelling company, and I moved on into college. I actually started college and my mum told me she didn't want me working so hard for the rest of my life, so she made me get my four-year degree. I went to college, got my degree, ended up on a different path and about 15 years later found my way back into home building. So it was not the plan, but that's kind of how life goes, I suppose.
Bosco Anthony:
I guess the industry picked you in some ways.
Sam Swartz:
It sucked me back in. Thankfully it did, too. Yes.
Bosco Anthony:
That's cool. Well, I think when people look back at their illustrious career, it's typically defined by milestones. But you can also find your growth in mistakes, as people say. So I'm going to ask you this question because obviously, we all get defined and change our ways through mistakes, but what were some of the memorable mistakes you made when you first got started that really just changed your trajectory and where you were going because you had a non-negotiable that you wouldn't do again?
Sam Swartz:
That's good. We'll go way back, actually. I was in a job working 8 to 5 but I couldn't stand the work. I'd actually found the beginnings of my entrepreneurship that I didn't even realise I was destined to be in. I had this job for about a year and a half and finally, thankfully, one of the best things that ever happened to me in my career was my boss fired me the day after Thanksgiving, of all things. It was a pretty low, humbling spot, but it completely changed my trajectory.
Sam Swartz:
I was working for Fortune 100 companies thinking that that was the safe way to go, and finally realised when I got pushed out of the nest, if you will, I was meant to blaze my own trail and be an entrepreneur. I’ve been on that path since 2010 now. So, I’m thankful to have found that. It wasn’t quite in the building world, but it certainly is what led me to here or else I’d probably still be punching a clock, making somebody else money today.
Bosco Anthony:
Well, if you think about the clients, I’m sure you’ve had the best of the best and potentially clients who you didn’t want. I’m going to ask you this in both spectrums. What did you learn from your best client and what about the worst client? How do you avoid getting more of those?
Sam Swartz:
The easier one to answer is probably the worst client. With the worst client, there’s always a handful of red flags that come out. The red flags are different, but you just have to be paying close enough attention to see them. As I’ve thought about this, the two worst clients I’ve ever had to deal with were absolutely just ‘beat your head against the wall’ clients. We’ve all had them. They came in, we designed what they wanted, we gave them everything they asked for. Then, we gave them the price and it was too much. It wasn’t what they wanted to spend, but everything that they wanted was in the house. We went back and did all this work and spent hours and hours redesigning and rebidding and came back with a price that they were more comfortable with.
Sam Swartz:
Well, then we got into the build and everything got changed back to the way that they wanted it and they ended up spending even more than what the initial contract was. The whole time, through the whole process, I was never going to meet their expectation level, no matter how hard I tried and no matter how much work we did. I think if anything, you have to give them exactly what they want and if they’re not willing to do what it takes to get that, then you just have to gracefully move on.
Sam Swartz:
But as for best clients, I would say my favourite clients are the ones who have the same energy as me. The talkative, the people who enjoy life, the people who live for today and just want things done the right way. They don’t all want to pay for doing it the right way, but they see the value in having it done the right way. When you have a client who you can hang out with and want to break bread with after the house is built, that’s always a blessing. From time to time even, you have homeowners over to your house for dinner and a movie after the house is done and get to make lifelong friends. At the end of the day, that’s the extra cherry on top for me.
Bosco Anthony:
What are you known for today in the industry by your clients? Let's just hope that your good clients supersede the ones that you don't want, but what are you known for by your clients in the industry today?
Sam Swartz:
I would say the narratives that one client will share with their friends, or even with the realtors in my market would be about the attention to detail. That's really what we try to sell. I want things done right and it can rub off on my team the wrong way sometimes, but we're going to do it right the first time. When it comes to building a house, there's hundreds of details that you have to sweat, if not thousands, frankly.
Sam Swartz:
What you do with the small details is just as important, if not more important, than the big ones, because if you're not sweating the small ones, you're going to let everything else slide, I think. So, paying attention to detail and then we do a great job, I think, at setting expectations out of the gate. We don't just bid off a set of plans. We build off a 25-30-page spec document where we're going to take the client's home and break it down detail by detail and really show them exactly what they get. There are things that they don't know they need or want at the beginning, but they're always thankful that those things are identified once we get into the build.
Bosco Anthony:
Having that 30-page document, did that come from years of experience and wanting to reinvent yourself or was that just something that you guys discovered would eliminate some of the problems down the track?
Sam Swartz:
Yeah, a little bit of both. We definitely had a great baseline to start with, but the document is, even today, an ever-breathing and evolving document. Anytime that something doesn't quite go right in a project, we'll go back and identify it in the specs and update it for the next projects moving forward. It certainly looks a whole lot different than it did on day one, but I think that it's important to not just assume that it's right, but always changing and evolving.
Bosco Anthony:
Well, let's go to the semi-present day. You've given me a little bit about your past, but tell me, what were you struggling with before you met the team at APB? How did that story come to life?
Sam Swartz:
Actually, just was last February I was at IBS [International Builders’ Show] in Orlando and I saw APB's class. I don't even remember what the subject line of the class was, but I know it was something about building for profits or something geared towards margin and profitability. As a numbers fanatic, I sweat the numbers, and so anywhere somebody's got something to teach me about numbers and how to make the numbers better, I am all in.
Sam Swartz:
I went to the class and Eric, now my business coach, was there presenting on what APB recommends for margins and what they recommended for profitability. Frankly, I thought APB was lying to me when they told me what they thought the margins would be, or should be. I can even remember sitting in the meeting with my one employee; I was texting him, "You wouldn't believe what these guys are telling us our margins should be."
Sam Swartz:
We were more than a little bit off where we needed to be, where our trajectory was way out of touch. In that class, Eric was really digging into APB and what they have to offer. They’re not just telling you what you should be charging, but showing you the roadmap of how to do it. That's the key. I've had other builders, other mentors tell me, "Hey, you need to be charging X," and I’d respond, "Yeah, that's not realistic." But for whatever reason, the way APB put it together and the way they presented it in that class just clicked and I was a sponge. I wanted to take in as much as I could and went to a couple more classes there. Then right away when I got back, I reached out for some free literature that they have and then signed up for a call and really jumped right in.
Bosco Anthony:
I find that really fascinating because you had some resistance, obviously, and you were sitting there thinking, "This number sounds too good to be true,” obviously. Something must have compelled you to jump on and eventually join the mentoring program. What do you think that was? Was it a curiosity to prove them wrong? Did you feel like perhaps there was something there that you needed to open and discover?
Sam Swartz:
I think it really goes back to why I went and signed up for the classes and signed up for the education. With my building background, I really felt like in Lincoln, Nebraska, I was on an island by myself. I only knew what I knew, and I had no idea what I didn't know. But I was able to identify that there had to be a better way, and really went to the conference searching for a way to do things better. My company is still pretty young and trying to find the right ways to make some changes from the past. So really, it was a combination of me just being open minded and them saying, "Hey, this is what you can do." I certainly like to joke that I'm a capitalist, so if you've got a roadmap to tell me how I can be more profitable, I'm all ears.
Bosco Anthony:
What were some of the significant impacts you've had through the mentoring program as well, and how did you transfer that knowledge to the business that's made it really worthwhile for you?
Sam Swartz:
It's exciting because I've been in the mentoring program for around six months now, five or six months. I feel like I've just touched the tip of the iceberg and already I'm kind of dumbfounded. I made mention earlier of what I didn't know. Man, there's a whole lot more that I didn't know that I didn't know, which really makes me sound intelligent here. But I would say that the biggest things, obviously, were margins. That's where we jumped in first. We jumped in first on revenue forecasting and the WIPAA [Work in Progress Accounting Adjustment] calculator. For me is, I'm a sole proprietor, owner of my company, so all of the decisions obviously fall on me, which is what I wanted. But with that comes a lot of responsibility.
Sam Swartz:
Being able to know and plan out six months ahead and being able to go to a spreadsheet that APB provided and be able to see that, “Hey, I have revenue and I have my overheads covered for the next four, five, six or seven months or whatever it might be,” certainly gives you a lot of peace. Whereas before I knew there were projects and margins that were booked and sold and under contract but being able to lay it out on a monthly basis and see it in front of me is so good. I can go right now to January of 2023 and know exactly what my gross profit is going to be as of today. So, when I'm looking at hiring new employees or making different purchasing changes, when you know you've got a lot of run in your revenue, it just really gives you a lot more peace to make wise decisions.
Bosco Anthony:
It sounds like you have a lot of financial awareness that's come from this process as well. You talked a little bit about margins. How did you become more confident selling higher margins as well? Where did the confidence come from?
Sam Swartz:
I would say honestly, it came from Eric, my business coach, pushing me constantly in those first three or four coaching sessions. It was seeing what my overhead really was; really digging into what my overhead number was, and knowing what I had already spent with those commitments and knowing that I had to have a margin to be able to cover it, to be sustainable and stay in business. Eric did a really nice job of helping me understand. My overhead, I thought was much less than what it was, which kind of sounds negligent, I guess. But you don’t know until you really jump in and study what it's going to be month to month, and then especially when you're on the growth rate that we've been on.
Sam Swartz:
Since February, we just hired our fifth employee, so now there's a team of seven. We've been constantly growing and adding to overhead, and every time we add to the overhead, Eric's there to say, "See, this is why you have to increase margin. This is why you have to increase margin." Really, his push has been pretty remarkable. I'm a little reluctant to say that our margin’s up 250% since signing up, with Eric's help, and really being able to see what was happening. I don't think that we fully capture the margin that we need to, but we're certainly on our way to where it should be.
Bosco Anthony:
That's pretty impressive. Of all the APB systems, and there's quite a few, as you said, and action plans, and the different areas of innovation, which one did you guys implement that was a game changer? Was there one that when you look back, you realise having that system in place or having completed that action plan really just transformed everything for you?
Sam Swartz:
Definitely, the first one we jumped into was revenue forecasting, and then right behind that was construction slots. I signed up wanting help with production and being able to manage a lot of the jobs that we had already sold – being able to manage getting them done. But when we jumped into the mentoring program, I could really see that our finances needed more attention first. Being able to do that, and then the construction slot planning was the next obvious fit for us. I almost feel like we're a couple of months early on being able to talk about this because I think the biggest changes are to come in the next three to six months with the push.
Sam Swartz:
The two I've been most excited about using or getting to are the marketing action plan and the sales action plan. After seeing what APB recommends for a marketing budget, I was probably spending a quarter of total revenue and APB's push is 3%. So, we've been making big changes in our marketing program and I actually just offered last week a position for a new marketing manager to come on and take care of basically all of the marketing modules that APB has. Their first two weeks on the job is going to be watching a whole bunch of videos and reading a whole bunch of action plans. Basically, APB has laid out for me my new employee’s entire work focus.
Bosco Anthony:
So not only are they your mentors, but they're also providing the onboarding for your team of employees.
Sam Swartz:
Yes. Yes.
Bosco Anthony:
That's great.
Sam Swartz:
It's great. I do all the sales here at True North, including when the client calls and wants to meet with us. I'm doing all that and I have not done as good a job of tracking and writing everything down that I need to when it comes down to following up and having systems and automation. I'm feeling the extra push to, with the new marketing push, as I know I'm going to be a whole lot busier on the sales side. Both of those, the marketing action plan and sales action plan, are going to get implemented heavily here in the next 30 to 60 days. That's for the next three to six months, and I'm ecstatic to see what changes are going to come.
Bosco Anthony:
Let's talk a little bit about software programs as well. What type of software are you using within the system? Also, a little bit about leads. You talked to the fact that you're doing sales, you might be getting someone to do marketing as well. What type of systems have you got for the leads and the software that you're using for the business today?
Sam Swartz:
Yeah, that's where I'm going to probably get myself into trouble a little bit. With my sales leads tracking, I'm a little bit old school. I love a whiteboard and I've got my whiteboard here with names and phone numbers and email addresses on it. That will be the first thing that we are implementing obviously; we'll be jumping into some software to help track it.
Sam Swartz:
We've also done a lot of tracking in capturing leads from our website with Buildertrend. Everything goes from our website through Buildertrend and to my email, which is great. We can look back and we have all of those captured, but Buildertrend has a huge side of it that we haven't really used. That'll be one of the things that we'll be implementing. They're right up the road here from Lincoln about 45 minutes, so my excuses for not implementing them on the sales side are a little weak. But I will say Buildertrend has been huge for us on the production side.
Sam Swartz:
We have a production schedule that is built out that I would put up against any builder, frankly. We pay attention to detail and just every minute detail that you can think of that goes into building a house. Scheduling the gas meter and all the little things like that and when they're supposed to happen. We've got queues to make sure the superintendents are getting things scheduled and set up. I’m a huge Buildertrend fan, and I honestly don't know how we would be able to run production without those guys.
Bosco Anthony:
I've actually had the good fortune of interviewing the CEO of Buildertrend at the time. It was on the podcast as well. He was an amazing guy and we had lots of insights shared from it.
Sam Swartz:
Obviously those guys are a whole lot smarter than us. I won't speak for you man, sorry. But what they came up with, I don't know of anybody who rivals it. I’m thankful to have them in our process and for being able to communicate with clients and being able to communicate with subs within the scheduling modules. It's been great for us.
Bosco Anthony:
Now, let's talk a little bit about the future. Obviously, we're living in some interesting times right now, but when you think about where you're going and what you want to focus on, and obviously you're still doing the mentoring, you're implementing systems, how are you future-proofing your business in the long term?
Sam Swartz:
Well, I pray a lot. If I've learnt anything about this business, you can plan and plan and plan, and when my plans aren't the Lord's plans, they certainly change and change quickly. But I’m still a planner, still a goal setter, still focused on driving the business forward. I actually had the good fortune of getting my name in on a large 70-acre development here in Lincoln where we'll be putting in 101 lots. So, being able to control that and have places to build is going to be huge for our company for the next three to four years. Really, I'd say the biggest catalyst for our growth into the future is going to be my team. I have some remarkable people who I've been blessed to hire here in the last three or four months, especially my CFO.
Sam Swartz:
Being able to have people on my team who I trust and can put in charge of important tasks like the finances, like production, even all the way down to my superintendents in the field day-to-day. I don't think I'd ever be able to dream about the future the way it's shaping up with without them.
Sam Swartz:
When my wife and I started this company 18 months ago, the goal was to build five houses a year. I was going to be very content with five contracts and run on myself and do everything, like most builders do. But I’ve been able to grow and make some good decisions and lot purchases in different areas. We're up to, like I mentioned earlier, 20 houses in production right now. So, having the team underneath me to help accomplish all of that work is crucial – it’d be impossible without them. I would say that having the right people is the most important part of how I'm going to build True North's future.
Bosco Anthony:
When we talk about time, I usually meet builders who are on the business; some are in the business. How much time do you spend working either on or in the business? I guess you talked a little bit about the fact that you're doing the sales right now, too.
Sam Swartz:
Yeah, I would say my biggest problem right now is not enough time to work on the business. We've got so much growth going on and projects coming in with a large number in design. I walk everybody through the design and sales process.
Sam Swartz:
I would say an average week is probably somewhere between 70 and 85 hours, and frankly maybe only five to 10 hours of that are on the business, unfortunately. It's usually late at night after the phone stops ringing, when I'm able to spend more time focused on the business as opposed to during the day-to-day. But we're making changes to try to help free up some of that time. A 70-hour work week is not sustainable. It's not healthy. But again, we're only 18 months old after starting afresh; I'd say that that's okay for a little while longer to make sure we're up off the ground and on a solid footing.
Bosco Anthony:
Well, you're in good hands with Eric. I'm sure he'll be cracking the whip some time, if he already hasn't yet.
Sam Swartz:
Absolutely. Every month. I look forward to it, actually. Yes.
Bosco Anthony:
Look, I'm going to ask you a question about perception from other builders, and maybe there's two parts to this question. One is, what are your thoughts around how you compare amongst other builders? Then, what do you think other builders think about your company, obviously, now that you're growing and you've been there, like you said, and making a name for yourself too?
Sam Swartz:
That's a tough one to answer, what others think of you. I spent a lot of time out of the gate at the beginning thinking about how I wanted my brand and my company to be perceived. You don't just come up with a name and throw something on the side of the truck and run out there and think you're going to do business – if you want to do business right.
Sam Swartz:
That attention to detail goes all the way down into the logo, the colour scheme, the planning, the narrative on your website. All of those things are vastly important. That's probably my marketing degree coming out in me a little bit, but it’s also just the way I'm wired. But I would say that we positioned ourselves to be more to the high end. We're marketing a little more towards the affluent who can afford maybe that top 10-15% of homes in our market. That was an intentional pursuit.
Sam Swartz:
How other builders perceive or look at us, I'm going to hope that they respect what we're doing. I know that they see that we're working hard. I know they're going to see from the street that our attention to detail is there. My superintendents have daily checklists on everything from making sure the street signs are standing up to making sure the weeds are trimmed, that the trash is off the yard and off the job. All of those little things are things that are big hot buttons to me. So, if another builder's driving by, they're going to notice that.
Sam Swartz:
We also have a great association, the Home Builders Association of Lincoln. I'm on the Board of Directors for that, so I get to spend a lot of time with other builders in my market who I respect and learn from, and we're able to work together to accomplish some pretty cool things in our community as well.
Bosco Anthony:
What advice would you give other builders considering joining APB’s membership and mentoring program, and what do you think they need to be successful?
Sam Swartz:
Well, my mindset is you have to spend money to make money. You have to invest in yourself. You certainly have to invest in your business. If you aren't willing to do those things first, you're probably a guy or gal who's wired to be working for somebody. Now, you’ve got to have the money. You’ve got to be able to afford it. But to invest in your education and to not think that you know everything is huge. Most builders were trimmers or trim carpenters who did a lot of work building a house and they know how to build a house. Building the house isn't the hardest part. It's running the business and working with the clients; that is what trips most people up. So, would you rather be great at building a house or great at running a business?
Sam Swartz:
I think you have to learn to do both really well to be successful. With all of the content that APB puts together, they are constantly coming out with new information. I sit here and I look at all the modules and action plans that I haven't had time to watch yet. There's so much for me that it's just a matter of finding the time in my schedule to work on it. I would say that if your business is important to you and it’s growing and you’re wanting to be the best, it's such a small investment with such a high opportunity of return, that for me, it's been a no brainer. I certainly think that it's worth diving into that first coaching session to really get a grasp of where the value really is.
Bosco Anthony:
Now, if they invented a time travelling machine, and most of the time they go back in time, but let's just say your time travelling machine takes you to the future where you're not working 75 hours a week. What do you tell a younger version of yourself in the future? What's the advice that you'd give yourself from the future?
Sam Swartz:
I've already put a great focus on today. One of my biggest pain points in this business and in this industry is how much time I have to spend working to build this company. I have two beautiful kids and my ultimate goal is to be able to spend more time and be able to do more fun things with them. That's my focus now, and I think I'm telling myself that every day. "Hurry up and get home," as I sit here at my desk and it's 7pm on a Monday night. But I would say I already do a pretty good job of making sure that today's right, but continuing to invest in people and the people around me, family and friends, would certainly be the ultimate lesson to take from this, I suppose.
Bosco Anthony:
I appreciate the honesty. Look, it's been a pleasure talking to you, Sam. I've learned so much about you in this very short time. It sounds like you're on a very exciting journey. I'm glad that APB wasn't lying to you, and that you're having a great time with Eric. I look forward to bringing you back on the show and seeing where you've progressed as well. Hopefully, you're not working 75 hours a week.
Sam Swartz:
I like it. I look forward to our next chat, man. It'll be fun. Thank you for having me.
Bosco Anthony:
I appreciate it, man.
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.
