Episode 61: How To Get New Work Fast With Dennis Wong

In episode 61 of the Professional Builders Secrets podcast, we’re joined by one of the executive business coaches at APB, Dennis Wong. Throughout this episode, Dennis shares what builders should be considering and doing to get new work …fast.

 

Inside episode 61 you will discover

• The importance of always having your eyes on new work
• Why builders need work fast and current trends in the industry
• The best practices in acquiring new clients
• How not to compromise net profit just to find work quickly
• The key metrics when looking for new work
• And much, much more.

 

Listen to the full episode to find out exactly how professional builders are acquiring new work fast without compromising their bottom line.

 

Dennis Wong - Executive Coach at APB

 

Based in Sydney, Australia, Dennis Wong is one of the Australasian Executive Business Coaches at the Association of Professional Builders. A Coach-U and FocalPoint Coaching accredited business coach also serving on the Executive Committee of the Asia Pacific Alliance of Coaches (APAC), Dennis now works exclusively with owners of residential building companies in Australia and New Zealand that are looking to fast-track their results.

Connect with Dennis

 

Timeline

1:43 Why builders need new work fast

6:32 Best practices in new acquisition

11:55 Do not compromise on quality just to find work quickly

18:58 What to consider when taking on new work

24:49 Knowing your Avatar is crucial 

26:12 Time - the highest priority

 

Links, Resources & More

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APB on YouTube

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

Dennis Wong:

It's actually become very dangerous for builders to become complacent. 

Dennis Wong:

If the money’s not in a bank, it’s actually not a sure thing. 

Dennis Wong:

Interest rates and inflation are what everybody is currently talking about. 

Dennis Wong:

If you can maintain good margins, you're going to be able to do less jobs to cover your expected overhead. 

Dennis Wong:

You need to get your sales contracts as quickly as possible.

Dennis Wong:

You need to be prepared and you've got to really hedge your bets. 

Dennis Wong:

We always say that you can only scale a profitable business and one that is systemised.

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.

Bosco Anthony:

We have another exciting episode from the Professional Builders Secrets podcast. Joining us today is Dennis Wong, Executive Business Coach for APB. Dennis, lovely to have you back again.

Dennis Wong:

Yeah, hi Bosco. Great to see you again. It's nice to be back in front of the mic.

Bosco Anthony:

Yeah, it's been a while.

Dennis Wong:

That can turn around for me.

Bosco Anthony:

Yeah, is it your second time on here? Look, I just wanted to start off by asking you a pretty quick and hard question. Why is it so important for builders to always have an eye on new work?

Dennis Wong:

Well, that's a really good question, Bosco, and I'm glad you started with this one. There's just so much unpredictability in the building industry right now that it's actually become very dangerous for builders to become complacent. You just don't know what's around the corner that might have a negative impact on the business. So, you need to be prepared and you've got to really hedge your bets.

Dennis Wong:

At APB, we have a sales process that is designed to help create more demand for a builder’s services than they can actually supply, so that they're always going to be in the driver's seat. This way, they can pick and choose which new work to take on and which jobs they're going to turn down.

Bosco Anthony:

You said two interesting keywords here: ‘market change’ and ‘hedging bets.’ I've never really thought about builders hedging their bets, but let me ask you a different question. What is happening in the industry? You alluded to this by saying a little bit about the market right now, that should get every builder looking for new work. What's happening out there? What are you seeing on the front lines?

Dennis Wong:

I was talking about unpredictability in the market. Now, if you look at what's been happening over the last two and a half years, we've had a pandemic and we've suffered global supply chain issues, which have been prevalent in the building industry. Builders have seen escalating construction costs, and now what we're starting to see is rapid inflation where the world economies are all on the brink of recession. So it's a pretty scary time right now.

Dennis Wong:

What I've started hearing from builders I talk to is that work that they thought was in the sales pipeline haven’t materialised. Often, they will say to me, "Oh, I've got these contracts. They're good as gold," or "They're guaranteed," or "They're a sure thing." What's happening is these contracts are starting to fall over because this unpredictability and uncertainty is causing a lot of anxiety in the market and clients are getting very nervous.

Dennis Wong:

So prices to build are getting too expensive. Finance is starting to get more difficult to get as interest rates rise. So the professional builder really wants to keep a full sales pipeline so that they can be prepared for these kinds of situations when good prospective jobs like ‘sure things’ fall over at the last hurdle.

Bosco Anthony:

Yeah, there's no such thing as a sure thing by the sounds of it, especially in sales. Right? Someone once said to me, unless the signature's on paper, you really don't have a sure thing.

Dennis Wong:

Yeah. In fact, if the money's not in a bank, it's actually not a sure thing.

Bosco Anthony:

Fair enough. That's even more solid proof. So what are some of the trends that you are seeing with builders in the market when it comes to acquiring new clients? I'm sure builders must be having a bit of heartburn when you're saying to them, "You've done a great job, but you need to go out there and get new work fast." Does that create anxiety?

Dennis Wong:

Yeah, yeah. There are certain things that really haven't changed because if you're trying to acquire some new clients, you still need to do the basics and get those things right. You still need to develop that level of trust that's going to give your clients confidence that you are the right builder for them. So that certainly hasn't changed.

Dennis Wong:

So your knowledge, your experience, your expertise are still going to be there because if you're going to be able to build on time, deliver on the quality and stay on budget, those things are essential. But something that's been happening more recently is that clients are increasingly getting more nervous because on the news they’re seeing building companies collapsing all over the place, both big and small. So what clients are now looking for is that added reassurance that you are going to be financially viable and you're going to be around long enough to finish off the build in X months’ time, six months, 12 months, 18 months. So builders who have strong financial positions are going to be really well positioned for this.

Bosco Anthony:

Interesting. And do you think that the media is really not helping the fear factor? Do you feel like consumers in general, because they're around social media and the news and the TV and everything around them, it's just causing a ripple effect where people are starting to get even more conservative with their funding?

Dennis Wong:

Yeah, absolutely. Definitely media has focused attention on a very narrow band of building companies that are collapsing. And of course, they hit the front page news and then they’re on everybody's minds. But the industry is a very big industry across the world. There are lots, thousands and thousands of builders out there. So the number of building companies I'm seeing out there that are collapsing is still a relatively small percentage. So a lot of builders are still out there trying to run their businesses.

Bosco Anthony:

Well, Dennis, let's unpeel the onion and let's get into what are some of the best practices that you recommend. Being an executive business coach as well for the builders out there currently, when it comes to new acquisition, what should they be focusing on and what should they be preparing for?

Dennis Wong:

That's a great question again, Bosco. We all know that when it comes to new work, especially if you're doing design and construct, tends to have a very long sales cycle. Typically 12 to 18 months is certainly not unheard of. So one of the best practices we teach at APB is that you need to get your sales process as efficient as possible, and that way you can get your leads in. You can work your opportunities and shorten the sales cycle so you can get to that sales contract as quickly as possible. And at APB, the sales process that we are talking about can then be customised to each builder's specific situation and their particular needs.

Bosco Anthony:

And how are you preparing your clients? You're talking to builders every day in your role. How are you preparing them and the industry as well? What should builders and the industry be preparing for in the coming months? I know it's hard to predict the future, but what should they be putting their energy towards?

Dennis Wong:

Right now, interest rates and inflation are what everybody is currently talking about. What we're seeing is central banks around the world hiking up interest rates in the last six months and this obviously impacts all the other areas of the economy. We've seen prices of petrol and energy just skyrocketing at the moment, and these are going to have a flow-on effect on prices of pretty much everything else, including what's in construction.

Dennis Wong:

So inflation is going to be with us for quite some time to come, but thankfully it does seem that the steep increases in interest rates at the moment are starting to slow down inflation. I’m not an economist, but I think in the short term we will start seeing a slowdown in these interest rate rises that have been happening. 

Dennis Wong:

Already, we're starting to start to see this in the US right now. I think in Australia, we might expect a couple more interest rate increases in the short term, but then the other thing is construction cost increases are also starting to rise at a slower rate than we've seen over the last 12 to 24 months. And then the other thing is suppliers in the industry are also starting to become more confident in the supply chain, so that supplies themselves are now also becoming more predictable.

Dennis Wong:

So often when we are working with our clients and members, we are constantly telling them, "You need to start being aware of these external factors outside of your business and to really try to be as prepared as you possibly can."

Bosco Anthony:

So the hard question is, and for the listeners out there, why should and why do builders need work fast today?

Dennis Wong:

I think just recapping what we were saying earlier, Bosco, there's just so much uncertainty and unpredictably in the industry right now. So nothing is guaranteed, as we were just saying earlier. There are two groups of builders that actually need to find work fast. Now, the first group are builders who haven't yet established their sales and marketing systems or need more time for their existing systems to gain traction to actually work.

Dennis Wong:

What these builders are probably experiencing is that they don't have a consistent flow of good quality leads and opportunities right now. And so for that reason, they haven't booked as much work as they would like or need and actually are desperately looking for new work because they've got bills to pay, they've got payroll, et cetera, et cetera, and they need to generate their revenue and income quickly.

Dennis Wong:

The second group that I'm talking about here are builders who have established sales and marketing systems. They are working, but they are suddenly find themselves in a situation where they've suddenly got a vacant construction slot, which has actually just turned up. So even if you've been fully booked out for the last 12 to 18 months, any of those projects could fall through at the very last minute. As we said, nothing's guaranteed. So if you want to avoid being left with an empty slot in your construction schedule, you have to be agile and you have to be prepared. Be prepared to find work fast to fill those gaps quickly if they happen. So these builders need to find work more quickly than they probably would've previously expected. So it's all about being a good scout: be prepared.

Bosco Anthony:

So when you talk about being a good scout and being prepared as well, you just talked about potentially two types of clients, the ones who have the systems and the ones who don't. With your potential clients who you work with, do you find a balance between the two? Is it sort of split or do you find that you spend more time with the people who don't have the systems in place?

Dennis Wong:

It's probably a combination of both. As a business executive coach, I work with clients who are either looking to establish the sales and marketing processes, so they fall into that first category. And then I also do have the opportunity to work with some builders who have been in industry a long time, some 15 to even 20 years. So they have some of the more mature developed systems. But as I said, it's probably a balance between both. But at the end of the day, nothing is certain and there are times when you just need to find work quickly.

Bosco Anthony:

I’m looking for the critics in the room who are going to say, "Oh, well if you look for work really fast, potentially you're compromising to make those deliverables, you’re taking shortcuts." Do you have to make any compromises as a builder to win work more quickly? Do you feel like this would prompt them to take more shortcuts?

Dennis Wong:

The answer to this one is not so straightforward. The answer to this is yes and no. If you're looking to find work quickly, and I'm going to refer to this as emergency work, then you're going to have to make some compromises because your number one priority is to find work to generate revenue and income, and why do you need to generate revenue and income quickly? Well, it's because you've got business expenses to pay. You've got employees on the payroll, your rent is due, you have insurances, equipment leases, and the list goes on.

Dennis Wong:

If there is no incoming revenue, someone has to pay to keep the doors of the business open. If the business has cash, you're going to eat into your cash reserves. If the business has low cash reserves, then the business owner has to fund the shortfall. So the faster the business can find work, the faster you can avoid the situation and you can minimise this particular shortfall.

Dennis Wong:

So in terms of your compromise, if your number one priority is to generate revenue and income, then you may have to take on projects that are sometimes outside your usual criteria. So they might be outside your geographic location. I know some builders who refuse to work more than about 10 kilometres out of where they're based. Or you might have to take on projects that are not in your niche. Sometimes you may even have to take on projects that are smaller in value, which incidentally may actually be good if you're desperate because smaller projects tend to be quicker to turn around and you can get the work done more quickly and you can actually get those invoices out and the cash flow into your bank more quickly. So there are some advantages there.

Dennis Wong:

But there are also a couple of things that you should not compromise. The first of these things is you should never compromise your profit margin. If you can maintain good margins, you're going to be able to do fewer jobs to cover your expected overhead. But if you drop your margins, you're going to have to find even more work quickly, which puts you in a bigger hole. You’ve got to find more work. So never compromise on quality either because this can have a very long-term detrimental impact on the reputation of your business. So that's why I say to this question, there are a couple of things that you can compromise on and a couple that you cannot.

Bosco Anthony:

So speaking of compromising and also adjusting to the demands, do you feel that builders then need to look for a different kind of client if they're looking for fast work?

Dennis Wong:

Good question. Now at APB, we believe that a professional builder should know who their ideal client is, or what we call their avatar, because that way you can target your marketing and sales to track more of those ideal clients. But if you are desperately in need of work, you may need to compromise on your avatar too. Because if your number one priority is to find work now, you may have to settle for somebody else.

Dennis Wong:

For example, you may be a custom home builder and you see yourself as that luxury home builder, but you may discover that there are smaller renovation projects in your local area which are available right now. So if you can convert those jobs quickly and you can make good margins on them, you can then turn them over and then that will help your cash flow and your overall profitability situation.

Bosco Anthony:

So from what you're telling me, it looks like there's an opportunity here to really impact the numbers. But I'm just curious, are you met with much resistance when you're speaking to your clients or you're speaking to your builders and you have to let them know that there's a potential here to look for new work faster? What type of emotions are they going through generally? Are they surprised or if they're paying attention to the numbers, do they understand that this needs to happen?

Dennis Wong:

I think most of the builders that I've been working with certainly are not surprised. They're probably already anticipating that this is the thing that needs to happen. By the time they've been working with us at APB in the Private Mentoring program at least, they have a pretty good understanding of the financials. So they should be able to recognise that there is a gap in their numbers and that it somehow needs to be filled very quickly. For most of them then, it's not really a surprise at all.

Bosco Anthony:

And Dennis, do you feel like this scenario applies for builders who are needing work because of the uncertain times? Or should any builder be considering this, even the ones who are doing really well or achieving their goals or have hit their levels of performance? Should every builder out there look for new work to be safe?

Dennis Wong:

If you remember, there are two categories of builders that we are talking about, so if you are a builder who that doesn't have a consistent flow of work, then absolutely. You need to be on the lookout for new work all the time because until you fill your pipeline and then you start developing a consistent flow, you have no choice. You have to generate work so you can generate income and then you can cover your costs and hopefully make some profit.

Dennis Wong:

Even that second category, so if you’re a builder who already has great systems in place and you've got your books full for the next 12 months, you need to be prepared. You need to be agile because a job can fall through at any time. I've been hearing this from clients over the last couple of months, a couple of jobs that they thought were guaranteed, and they had said, "Oh yeah, we definitely will win that job," well, it didn't pan out. So that's why you've got to be prepared to have a plan B. And I think being ready to find new work is going to be that plan B.

Bosco Anthony:

So, from an operational perspective and from a capacity perspective, on one side we are talking about the conversation about getting new clients, but what do you need to do as a business owner or as a builder to make sure that you have the capacity to take on that new work as well? Because again, the other part of this conversation is bringing in so much work that you can't fulfil the work, right?

Dennis Wong:

Well, if we are talking about capacity and we're talking about gaps in the capacity, then I'm really working on the assumption that you already have the operational capacity to take on the work that you need. What's happening is that you've got a gap in your capacity so that you are underutilised at the moment.

Dennis Wong:

So really, the answer to this one is you don't need to change your operational capacity at all, because all you are doing is identifying that there's a hole in your pipeline, which means that you have excess capacity right now and you need to fill that hole as quickly as possible. So either, as I said, if you don't have a constant flow of good quality leads, there are going to be holes in capacity, or that hole has suddenly sprung up unexpectedly in that ship. So really, at the end of the day, all you're doing is finding new work to fill those gaps that you already have existing capacity for.

Bosco Anthony:

So are there any other aspects of the business, either operationally, marketing or staffing, that you now need to consider when you are bringing in new business?

Dennis Wong:

Of course. When you're trying to acquire new business, it's very much focused around your sales process. Your sales process needs to include your estimating, it needs to be working well so that your pricing is accurate and it's timely, and that you can get your proposals out quickly. Because remember, it's all about shortening that sales cycle.

Dennis Wong:

You want to get those prices out to your prospects, go through the documentation, and have them sign as quickly as possible so you can actually start the build. Now, once you start the build, then you need to make sure that your construction team and your processes are also efficient so that this way you can gear up quickly and get started as soon as possible. Your focus from that point on is to make sure that you complete the build in the shortest possible time and then you can move on to the next job.

Bosco Anthony:

Let's talk about gearing up. It's an interesting theory because typically, when you think about companies that go under or end up folding, it's mostly because they've either grown really quickly and they can't sustain themselves from a cash flow positive perspective, or they're in financial crisis because they grew too quickly. So I guess the question is, is there a balancing act? How do you grow and scale effectively knowing that yes, you're taking on more business, but you're also not compromising yourself long-term to avoid layoffs?

Dennis Wong:

At APB we have two criteria for growing and scaling a successful building company. We always say that you can only scale a profitable business and one that is systemised. So in this situation, if we are talking about new work and we are talking about emergency work, then I don't feel that growing and scaling is something that you should be considering at this point in time because your number one priority is just getting enough work to generate revenue to keep the doors open. So really, growing and scaling shouldn't be even on the radar at this point in time.

Bosco Anthony:

Right. So what you're saying is to get the business in and then look at the next level or the next step, and then how to balance that once you've hit the revenue margin?

Dennis Wong:

Absolutely.

Bosco Anthony:

Okay.

Dennis Wong:

So, once things have stabilised.

Bosco Anthony:

Stabilised, right.

Dennis Wong:

Stabilised, and your business is running profitably, then it's time to start looking at systemising and then going to the next step.

Bosco Anthony:

If you're looking at your financials, you're looking at your P&Ls [profit and loss statements], then you should be able to know very quickly how stable your business really is. And that's what you do as well, working with the clients, right?

Dennis Wong:

Mm-hmm, yes.

Bosco Anthony:

Okay. I understand a little bit about the stability. What suffers when you're finding work too fast? Where are the pain points? I guess every builder's going to say, "If it's that easy, then everyone should be doing it." But what are the challenges or what are some of the things that builders really struggle with here?

Dennis Wong:

The builder has to focus on what is their primary goal in finding new work fast. If it's about finding those leads and opportunities out there that are going to lead to a good opportunity that they can then convert into a contract, then their primary focus has to be on marketing and sales, nothing else. So really, everybody in the company who is potentially available should help the business in marketing and sales. So everything suffers at that point.

Dennis Wong:

However, once you actually have a signed contract, then it's back to business as usual. Then the focus will be back on the construction, for example, getting everything geared up and primed to be able to get on site and get the work done and then move on. So really, it's a combination of what is important at different stages of that business. Initially, sales and marketing. Everything should basically be put on pause until that happens. Get some work in the door first and then things will start getting back to normality again.

Bosco Anthony:

It sounds like it's a balancing act too, because at some point, you're marketing and selling, and then the next point is about the deliveries and making sure that the quality of the work is there so you can get more work, right?

Dennis Wong:

Yeah.

Bosco Anthony:

So it's almost like a juggling act in many ways.

Dennis Wong:

I believe so. That's why I keep using that term being agile. You need to be flexible and you need to adapt to the situation.

Bosco Anthony:

Right.

Dennis Wong:

Because things change very quickly.

Bosco Anthony:

So what are some of the key metrics that you pay attention to as an executive business coach when it comes to acquiring new work for builders? What are you telling your builders to look for when it comes to metrics?

Dennis Wong:

This is another really good question there, Bosco, because in general, when it comes to new work, there are a couple of things that I would like to look at. The first one is what are the gross and net margins on the job? Because that obviously impacts the financials. Then the other metric I look at is how long does it take to get that sales opportunity through your sales process?

Dennis Wong:

In other words, what's the speed of conversion? Because if you need work quickly, you need to turn things around quickly. You need to make sure that these sales don't just sit and linger in your pipeline. You’ve got to keep pushing, pushing and move them through and get those contracts as quickly as you can.

Of course, once the construction starts, then the other focus you'll need to then look at is how quickly do you complete the construction. Ideally, you must at minimum complete it on time. Ideally, if there's any way that you can actually complete a job ahead of schedule, that's a bonus because that means then you have the capacity to take on more work following on from there.

Bosco Anthony:

Now, they say that success leaves clues. Would you say that it makes sense for builders to also know their avatars or customer personas to make sure that if they're looking for new work, they know what type of client they're going after? Or does that limit them when they're too selective?

Dennis Wong:

I think that was a question where you asked me about compromising.

Bosco Anthony:

Yeah, yeah.

Dennis Wong:

But it's a good point. I mean we always say that if you're going to be a successful residential builder, if you can model your ideal client on your favourite client, so the clients that you've most enjoyed working with or you are most successful with, most profitable with, then naturally you want to keep attracting that style of client and that's your ideal avatar. But back to what we say, if the situation is different and your number one priority today is to find work quickly, then you're going to have to compromise because that avatar may not be readily available. It may not be the kind of job that will convert quickly or the style of work that's currently available in your local area.

Dennis Wong:

So using an example, do you remember I was talking about a custom builder and the renovations? You might not be thinking of doing another bathroom or kitchen renovation, but if that's the only work around at the moment and that's what your clients are demanding, you may have to do them.

Bosco Anthony:

Interesting. Well, look Dennis, I could talk to you again for hours and hours on this topic, but I'm going to throw you a curveball question to end this lovely insightful interview between us. This question is, you've talked about pipeline. You've talked about conversion. You've talked about speed. If you had to choose, would you say that one of these, whether it was a pipeline, which is volume and more marketing activity, conversion, which is your sales systems, and time to get to conversion, how would you rearrange them or which one takes the biggest priority first? Or am I missing something from that equation?

Dennis Wong:

If the question is back in the context of finding new work fast, I would say hands down, it's time.

Bosco Anthony:

Okay, interesting.

Dennis Wong:

The most critical thing there is that you need to get your sales contracts as quickly as possible. So time is going to be the critical factor. It'll be nice to have a full pipeline, but that's not going to be guaranteed that a full pipeline will end up with a signed contract in the shortest possible time. I don't think there's any question I would rate time as the number one.

Bosco Anthony:

See, I was trying to get you to choose between conversion and pipeline, but you decided to go with the whole straight on look. But that's a good answer because it sort of answers both. Time is what you need for both marketing and sales.

Dennis Wong:

Yeah. And I guess time also implies that you are converting them into a contract, so I sort of cheated.

Bosco Anthony:

Well look, Dennis, that was a lot of fun. Again, thank you so much for the insights. We love having you here. We'd love to see you back again. But until then, I wish you continued success with your amazing clients.

Dennis Wong:

Well, thank you so much, Bosco. It was absolutely a pleasure being here today, and I hope that you and your listeners get some insights from our conversation today. Thank you.

Bosco Anthony:

Absolutely. We'll hear from you soon.

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.