Episode 2: The Truth Behind Growing A Building Company With Tye Alroe

In the second episode of the Professional Builders Secrets podcast, our host, Bosco Anthony is joined by Tye Aloe, owner of Alroe Constructions based in Queensland, Australia. Throughout this episode Tye shares his journey as a builder and the secrets that led to his success today.

Alroe Constructions has been operating since 2012 and constructs boutique projects along the Gold Coast, Brisbane and Byron Bay in Australia. Tye’s building company is on track to hit $60million in revenue in 2021 but his road to success wasn’t a smooth one.

Hear from Tye as he shares how he got into the construction industry, the struggles and challenges he has encountered along the way and how joining the Association of Professional Builders has impacted the transformation of his building company. 

Tune in to the full episode to hear Tye share his story and offer advice to other builders who want to follow Tye’s path to success. 

 

Tye Alroe 

Founder and Director of Alroe Constructions, Tye has a qualification in building and carpentry and has built his company from the ground up. Tye has been operating Alroe Constructions in Queensland, Australia since 2012. 

Connect with Tye

 

Timeline

1:05 About Tye and Alroe Constructions.

5:25 The struggles Tye faced when first starting out.

10:49 What the industry was lacking when Tye first started out.

11:43 Why Tye joined APB.

15:12 Tye’s transformation.

28:32 Tye’s perspective: Pressures builders are facing today.

31:46 Tye’s advice to younger self & other builders.

 

Links, Resources & More

Alroe Constructions Website
APB Website
APB on Instagram
APB on Facebook
APB on YouTube

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

Bosco Anthony:

This is Professional Builders Secrets, the number one podcast to help you grow your building company safely and securely, brought to you by the Association of Professional Builders (APB). Join us every week as we talk to industry experts and your fellow professional builders on everything you need to know to generate more leads, more sales and higher margins while improving the building experience for your clients.

Bosco Anthony:

Hello and welcome to the Professional Builders Secrets podcast, a podcast by APB for building company owners, general managers, Vice Presidents (VPs) and emerging leaders. Here, we discuss all things running a professional building company, from sales processes, financials, operations and marketing. Today I'm joined by Tye Alroe, Founder and Director for Alroe Construction. Tye, welcome, and thanks for being here today.

Tye Alroe:

Thanks, Bosco. Yeah, it's great to be here, mate, and I'm looking forward to having a chat.

Bosco Anthony:

Well, Tye, let's get into it. Tell us a little bit about Alroe Constructions and what you specialise in today, before we get into your journey.

Tye Alroe:

So, Alroe Constructions is based on the Gold Coast in Queensland. We specialise in mainly boutique, small development sites. So, four pack villas, duplexes, seven villas, those kinds of sites, but very high end building, and really difficult as well. So, it takes kind of a different approach. We've come from a custom home background and we've found a niche in the market, and we're tapping into that right now, because there's not much land around anymore. So, our business plan is to redevelop the Gold Coast and Southeast Queensland.

Bosco Anthony:

Yeah, I was actually out at the Gold Coast for a company retreat, and I noticed how compact everything is, and there's pretty much a residential space everywhere. Let's get into that a little bit. What compelled you many moons ago to get into the building and construction industry? Was this something that you inherited by trade or was this an interest? How did you get into it?

Tye Alroe:

It's funny you say that. My old man, or my dad, isn't the handiest person that you've ever met. He's quite the opposite. He and his brother had a family business that his dad, my grandfather, started back in 1960 out at the Rocklea Fruit Markets, wholesaling strawberries and stone fruit. It's been handed down from generation to generation, and I was the next in line because I was the next Alroe to take over. I actually went out there through my teens – 14, 15, 16, 17 years old – through the school holidays to get some pocket money. I always had a bit of a drive to work and make money.

Tye Alroe:

Anyway, I finished my schooling. I didn't do any good at school at all. I wasn't really the school type, and it’s fair to say I failed school. I was playing football at the time in Brisbane for the local league, and I had some pretty big aspirations in football to go professional. Then I had an accident and I fell off a roof and broke my back when I was 18. So, that stopped my football career.

Tye Alroe:

I was kind of at a crossroads. I didn't like working at the fruit markets, because it was a 12am start on a Sunday morning or Monday morning, and then we worked through to say lunch time the next day. It was just really tiring on the body. So, long story short, one of my best mate's dads was a brick layer, a block layer, and he offered me a brickie’s labouring job. And I thought, “You know what?” I was young. I was still fit. I was about 17, 18, and he was going to pay me $600 cash a week. And I was like, “Wow, that's a lot of money.” So, I jumped on that for two years.

Tye Alroe:

I worked as a brickie’s labourer for two years and really sweated myself out for those two years. It's a hard job, but what it taught me was I had a passion for building, just being on a job site and how things went together. I could just see even at a young age that the builders that we all were working for at the time, as a brickie’s labourer or a brick layer, it was very poorly managed and it wasn't organised, and I could see the frustrations in my boss's eyes. He wasn't making money because it wasn't organised correctly. It was never ready. I thought, “You know what? I'd love to be a builder one day.” At that time, I was only 19 or whatever it was, and I just had no qualifications behind me.

Tye Alroe:

Then the builder who we were working for at the time offered me an apprenticeship as a carpenter. I've always been pretty good with my hands; my granddad on my mum’s side of the family was quite good with his hands, and we'd always build stuff. Anyway, long story short, three to four years down the track, I got signed off from my apprenticeship at 23 and started my own carpentry business, which went for about four or five years. That grew pretty quickly, and then at the age of 26, I thought, “You know what? Let's start building.” So, I did my builder's course and got my builder's licence, and started my first build back in 2012 when I was 26 years old.

Bosco Anthony:

Wow. So, looking back down memory lane, obviously you've gone through the stage of being a carpenter and then starting your building side of things. What were some of the struggles you encountered when you first started off? I know we're going to get into a little bit about the successes and the transformation, because you've got quite an incredible story, but let's start off with the problems that you first encountered. Because, essentially, every builder starts with a roadmap, and being a business person isn't particularly on top of their list. So, what were some of the challenges, I'm just curious to know, on your end?

Tye Alroe:

There were a lot of challenges, really looking back at it now. What the business has achieved in its whole is pretty impressive. But in the early days, the roadblocks, running the business was one of them. Just all the tax implications and business requirements outside of just being a builder. There's a lot of builders out there who are really good at what they do, but they don't know how to run a business and manage people and recruit properly, and just all the business type of things that are in every business. Not just building, but it can be any business. And that was one of my challenges.

Tye Alroe:

Another challenge was I'm dyslexic, and that's why I wasn't very good at school. My concentration wasn't that good. My English and all that kind of thing, typing emails and all that kind of stuff and typing up scopes of works wasn't great. But I've been very good with numbers from early, just basic numbers, like times, minus, divide. I was really good at that. So, that was one thing.

Tye Alroe:

But the biggest challenge I had in the early days was finding work; that was the biggest one. I was 26 years old, but I had no background in building. I was trying to start a building company. Yeah, I had a carpentry business, but carpentry is one thing, building's another. So, there wasn’t anyone who wanted to come and build with me; it was hard. Twenty-six years old, a young age to be a builder. And I just got lucky in a way that I met this guy and I knew he was going to give me a shot, but I knew I was going to do it for pretty, much free.

Bosco Anthony:

Yeah.

Tye Alroe:

It was just to get one build under the belt, which I did. And I made budget and broke even, but I made no money out of it. I paid some wages, and that was great. But that started my journey right there. I had something under my belt to show other people, which is like my marketing. The next challenge was trying to juggle everything you’ve got to do in a building company when you've got more than one job on at a time. For example, with quoting, making sure the scope of works is correct. I wasn't even using a scope of works at that time. I was just kind of going, “Guys, quote this and quote the plans, and we'll just follow the rest later on.” And managing clients, and managing budgets and programs and... the list could just go on and on and on.

Tye Alroe:

And that was really overwhelming for me at the time, knowing that I was outside my comfort zone. And unfortunately, on the next job I did, I lost a lot of money for not quoting it correctly. My contracts weren't sealed tight, which I've got worked out now. The developer took me for a bit of a run. I actually lost about half a million dollars’ worth of money, which was really, really hard to do at 27. I had to sell my house that I had worked hard for during the first 10 years of my working life to get that deposit. I had to sell that. Luckily, I had a little bit of equity in the house to get paid out, and actually had the strain of financial stress on me with subcontractors and suppliers ringing me daily saying, “Where's my money?” But I didn't have it, because I was still waiting for the house to settle.

Tye Alroe:

So, that taught me a lot in the early days about whatever you do in building, if you make a mistake or you cut a corner, it's always going to come back and get you.

Bosco Anthony:

Right.

Tye Alroe:

It doesn't matter how good you are, if you’re making mistakes, it's always going to come back. So, my first thing from the start was, “All right, I'm not the best estimator. I'm not the best guy with the details with the scope of works. So, I'm going to put on an estimator.” That was my first ever employee. He came from Bond Uni. He’s still working for me today. He's been with me for nearly eight years now. And he's one of the main employees I've got as a Project Manager (PM). But that was just the first step in my journey when I had to restart, because I literally had no money in the bank again.

Tye Alroe:

So, as a builder, you've got to have equity in your business to be able to trade. So, I only could turn over one house a year for the first two years to get my equity back up. And then from there I met APB, and all the other building skills came into play. All the business skills came into play over the first two years of that journey. We've gone from doing two houses at a time to a lot more in the space of six years.

Tye Alroe:

But it's been a journey, and you've got to be fully committed. If I give any advice, I've got some kind of drive in me that I don't think many people have, and it's the drive to be better in my building company. A lot of people say, "Oh, Tye, you're so successful right now." And I'm just like, “No, I'm not. I'm nowhere near success.”

Bosco Anthony:

You've got goals. I get it.

Tye Alroe:

Yeah.

Bosco Anthony:

I totally get it. But let's dig a little deeper, because you mentioned some really interesting challenges that you faced, obviously in financial awareness, with employees, not really knowing where to go, and then all these different hats that you're wearing from not having employees. I mean, there's a lot of challenges here and you don't necessarily get a handbook when you first start. So, if you look back now, what was the industry lacking at the time when you started out? Was it the fact that you go to school to become a tradesman or you learn your craft, but there really isn't psychology in how to run a business? Would that be the biggest thing that was lacking at the time?

Tye Alroe:

Yeah. I think systems and processes are the biggest thing in the building industry. Everyone does it differently, for sure. The main objective is still there. It's customer service, bringing jobs in on time, bringing jobs in on budget, and bringing jobs in at a quality that you can be proud of.

Bosco Anthony:

And speaking of proud, I think you are one of the success stories. I mean, I've had the privilege of interviewing you before and working with you. Your story is incredible. And there's a journey, and the journey has just begun. From everything you've told me, you're very ambitious and your goals are growing every year. But you're one of those success stories that APB is really proud to display. You’re listed in a lot of their messaging and on their website as well. You know, let's go back in time. How did you hear about APB, and what really prompted you to go, "Maybe I should consider working with them?"

Tye Alroe:

It's funny. When I had that job go bad on me and we lost all that money, I just needed a bit of a break. Because I'd worked every school holiday, and ever since I left school I was working. So, unfortunately, my partner at the time left me over all the stress I was going through. So, I said to my best mate, “Let's go travelling over in America.” I had to go on a surf trip just to really recharge my brain. And we were in South America for six weeks. And anyway, I was Googling one afternoon thinking, “How can I make my building company better?” I actually typed in 'processes and systems for building companies'.

Bosco Anthony:

And as you would, you put that in Google, in South America? That's amazing.

Tye Alroe:

Yeah, yeah. I was literally on a hammock on Bocas del Toro. It had no phone reception, it just had internet. I was Googling away. It was just so cruisy and my mind was so clear. Anyway, APB didn't pop up. Buildertrend popped up; I had never heard of Buildertrend. This was like seven years ago. I jumped on and I had a look at it, and I'm like, "Wow, this looks amazing. This is exactly what I'm after." I bought Buildertrend straight away. So, I got back to Australia, and they said that I was the first of 20 builders in Australia to buy it.

Tye Alroe:

Then within about two months later, I started getting a Facebook ad come at me, APB, APB. And I'm like, “Who's this APB?” Typically, I think it’s someone trying to get a quick dollar out of me. So, I kept on saying no; I didn't click on anything. I was curious, but I just kept on saying no, no, no. And then one afternoon I must have been in a bit of a  s****y mindset with work, and I clicked on it anyway. I went through it and I'm like, "Wow, this looks like it's pretty good as well." So, I clicked in for a one-on-one meeting.

Tye Alroe:

And at the time, I can't remember who it was, it was one of the business development managers. This is three years ago now. We went through it and I was still a bit cautious. And then, you know what? They got me. I read all their marketing and sales stuff. It's exactly what they say they preach. They'll follow me up. They kept on sending me educational emails. It was all this stuff that they preach. And they eventually got me. 

Tye Alroe:

I'm not a sucker for a deal. I like to do my research. But they got me. And to be honest, Bosco, I haven't looked back. Even now, I feel like I still use them as a support mechanism for my business. And yeah, they've been a massive part of the journey.

Bosco Anthony:

And Tye, you've gone through the Private Mentoring program with them as well, right? You've worked with the resources and the mentoring, everything.

Tye Alroe:

I've gone on from the members’ portal. I’ve still got the members’ portal today. I train all my staff through that members’ portal. And I’ve still got the members’ portal, so Andy and I still catch up once a month. And I participate in the Facebook group and all those meetings. It just keeps on educating the brain and reminds you of what you've already learned, but you might not be doing it. And it's just a good check in with yourself as a business owner to make sure you're following a proven process.

Bosco Anthony:

Now let's talk a little bit about that transformation, because there's so much that's happened for your brand in the last three years working with them as well. How did working with APB and the mentoring program really impact that side of your business? What were some of those critical education awareness hubs that you basically got from this that you were able to then apply into your business?

Tye Alroe:

Don't get me wrong. Their marketing and sales processes and protocols are probably the best in the business for builders. They gave me the confidence to grow. For a lot of builders, if they listened to this and they heard my journey and how much money we’re turning over per year now, that would scare a lot of people. And it would've scared me four years ago as well. 

Tye Alroe:

My five-year goal five years ago was to turn over $15 million and break a net margin of 10%. That was my business goal. I had a few other things in the business goal. But five years down the track, we're now turning over about $65 million, maybe not at 10%, but close to it; getting close to that at about 6%. The factor that's enabled me to get to that spot is the confidence behind my own ability and my own business structure and processes, which then goes back into their financial training.

Tye Alroe:

So, their work in progress, their pricing for profit calculator, knowing your overhead costs, knowing your margins and markups. I was marking up my jobs for the first three years at 10% markup and thinking I was making money, but I wasn't. I was working on cash flow, and cash flow is not profit. It's just money in your bank that you're using.

Bosco Anthony:

It's operating costs.

Tye Alroe:

Yeah. So, the biggest thing for me was the work in progress. That gave me a clear picture of where my cash was at, but it all gave me a clear picture also on how much work I had to complete and making sure that I had other work coming in to replace the work that I was finishing. So, by the end of the jobs, I still had other work and income coming in. That for me was the biggest piece of the puzzle, knowing my financials and their financial reporting programs and stuff; they teach you how to look at reports.

Tye Alroe:

I do monthly reporting now. I do weekly reporting on cash flows, but I do my monthly management meetings every month. No questions asked. And that has to happen, because now I’m running a bigger business, I have bigger overhead costs. I've got $400,000 worth of wages going out each month, which I need to pay for, so I've got to be over these numbers. Numbers are the biggest thing for me in my business at the moment, because I have my construction side of the business structured in a way that what we've learned – all our lessons learned over the years – we've documented those lessons learned and we've put things in processes and protocols to make sure we're checking things before we go to the next stage so we aren't having more issues. So, that's the biggest one. Long story short, it's the financials for me.

Bosco Anthony:

I think someone very wise once said, “More money, more problems,” right?

Tye Alroe:

For sure, one hundred percent. But you know, you've got to go against the grain there and say, “Yeah, that's probably fair, but let's not make the same mistake twice.”

Bosco Anthony:

Oh yeah, absolutely. So, let's go, let's dive a little deeper into the key applications. You've talked a lot about some financial terminology. You've talked a little bit about awareness as well. Earlier, you even said that you were going into jobs and not properly quoting, and not using a calculator or a proper quoting tool. What were some of these key applications that made significant financial impact to your business, where you went to the next level? Was it using some of the APB calculators and financial tools? What was the most important impact to the business for you?

Tye Alroe:

Well, any builder will tell you, it doesn't matter what you mark your jobs up by, the cost of the job needs to be quoted right. Because you can mark up 30%, but you might have missed it by 40% inside your costs.

Bosco Anthony:

Yeah.

Tye Alroe:

So, from a costing subbie and supplier point of view, the APB can't give you that. That's up to you to have the right processes in place to double check. What I had to do, my biggest pain point in the estimating, was when we got bigger, we'd have estimators come on board. They would estimate a job differently to how I would estimate a job, or differently to another estimator. So, I had to work on a template that would be followed like a checklist to a point that my little daughter who's two years old could do it. Because estimating is a process and there's different things to follow, but a lot of it's the take-offs and everything like that, that have to be done correctly. And then also reviewing the take-offs and having that sort of prototype checklist in place. So, there's about three different sets of hands it goes through to get approved.

Tye Alroe:

So, the biggest point for me was the estimating template. We were using rulers and calculators when we first started. Super slow and formulas can change in spreadsheets in a flash. There are all different problems there. I started looking online for an estimating program. There's a lot out there, don't get me wrong. And take my word for it, I've tried four of them, and I don't like all four. So, now I'm under costX, which is an estimating program. Onscreen take-offs; it's very, very good. But we've had to set up a template to put into that. So, you've got to do the work. You can't get something given to you that works fair. I wouldn't be able to give my template to you Bosco, if you were a builder, because you do things differently to what we do.

Bosco Anthony:

And my costings might be very different as well for me.

Tye Alroe:

Yeah, rates per concrete and tiling and all that's different, right? So, you've got to do the hard work. And it's painful. We're all busy. These things have to be done on the weekend and at night. It's as simple as that. I was coming to work at 3am every morning and I was getting it done. I was working through one part of it each week and going to the next part. You’ve just got to put that hard work in. And once you get that hard work done, it pays off in dividends at the back end.

Bosco Anthony:

So, for builders who are listening to this and getting into the business, or are in that first five years where a building business is likely to fail at that point, the numbers are pretty daunting. I think 80% of builders trying to get into it typically fail in the first five years.

Tye Alroe:

Yeah.

Bosco Anthony:

It's an industry of margin erosions, as we know. I was reading the newspaper today, or on the weekend, on Sunday, and they had this comparison of the cost of building a new home and the pricing and how it's all changed as well. Everything is a lot pricier today because of COVID. How do builders avoid margin erosion? Does it come down to the estimates and knowing your numbers? Would that be the biggest advice that you have? Is there anything else that they should be considering? What are their blind spots?

Tye Alroe:

Well, the biggest thing that I can see straight off the bat, which we are trying to bring into our own business, but it's hard, is your contracts. If your contracts state that X, Y, and Z are possibly going to increase over the duration of the build, we can't lock in a number for that. So, there are going to be allowances. If it's fully open book and you can show the actual quote when it's on site and it's within the allowance, well, there's no charge. But if it's over the allowance, the client should be paying for that in this time of this industry. Unfortunately, I personally work for a lot of developers, so it's business to business. They're not willing to do that. So, they're saying to me, "Tye, you should know your numbers, so forecast the costs for 12 months’ time and we'll sign a contract." So, to be fair, I've been doing that.

Tye Alroe:

And I've been communicating with my suppliers. I've been communicating with my trades. Because it isn't just the suppliers, it's the trades as well, because they've all got their own suppliers to deal with. So, the plumber needs to still buy pipes, and the electrical guy needs to still buy the wires and the light fixtures and all that. So, we are very open. I think communication's the biggest thing. If I had to put a word on the table, it's communication to your suppliers, to your subbies, to your clients, and just be super open about where things are at.

Tye Alroe:

Unfortunately, a lot of builders have lost money, including me. I've lost money. That's just part and parcel of this business, which is really not right. I don't think it should be like that. You see, builders have this mentality… or people think builders are rich. And I'm telling you right now, we're not rich. We can be rich one day and we can be poor the next. It's as simple as that. And I say that in my own business. I can make $100,000 one month, and then lose it the following month because of something else. So, it isn't that easy, and people shouldn't be thinking like that.

Tye Alroe:

But my advice is try to keep your contracts nice and tight if you can. And you should be able to if it's just custom homes to mums and dads, but then you have the other thing where the mums and dads have no cash, they're financed to the hilt, the banks won't pay the extra over. So, there's another thing there as well that you’ve got to work through. But I've actually used the COVID period to put more margin on my jobs to cover that as well. Not just put extras on the timber, or steel, or concrete, but I've actually put another 10% into my bill contracts at the moment.

Tye Alroe:

And I've got away with it to a point that we were running at low margins for a long time and we needed it to come up. But to come up 10% on a $3,000,000 build is $300,000. When you built something six months ago with the same client, that's hard to do. So, using this COVID period, I've kind of snuck that in and used the COVID as the reason. But I'm not ripping my clients off. I'm just trying to get my margins to where I can grow successfully and make money for the business, really. Which you’ve got to.

Bosco Anthony:

Well, you've got to sustain your business, as you said. So, you've had an incredible journey. You've seen the success. You're now at a financial threshold that's a lot higher, and it's pretty impressive from the outside looking in. If you look at your journey to date, what are some of the key reasons for that success? You talked about communication, you talked about financial awareness and knowing your costs as well. What do you credit with that success? Is it your personal drive? Where does the success come from?

Tye Alroe:

I'm not going to lie, and this is going pretty out there. But I believe in karma. So, I'm going spiritual here on you, but I've always done the right thing. So, if we've made a mistake, I've pulled out that $50,000 mistake and replaced it out of my own money. If we're going to be delayed on site, I've been very open about that. Any other issues, I'm just open. And then I always wear my heart on my sleeve in the way of, if that's not good for my house, if I was living in that house myself and I wasn't happy with it – and I've got Obsessive Compulsive Disorder (OCD) by the way. So, that's pretty gnarly. I will either pull it out and redo it or fix it to make it to a standard.

Tye Alroe:

And I think that for me, because we haven't been big on the marketing – although we're talking at the moment about that. But we've been word of mouth, which I don't advise doing as a general rule to have that as the way you bring in leads. But we've made a lot of success through word of mouth, which is a good thing, because that's a good pat on the back. But the reasons why I did that, are because commercially, sometimes I could have easily stayed commercial and said, "No, I'm not fixing it." But then that person speaks to a hundred people that they know. And then they say, "Oh, don't use Alroe because they're rough, or they don't do what they say, or they're sharks," or whatever. So, for me, relationships have been the biggest driver for me across my journey so far. And I've met people along the way that've gotten me to the next part, APB for one: Russ and Sky and Andy.

Tye Alroe:

Then I had a couple of other business coaches before then, who took me from stage A to B. And I've been very big on self-development. But I'm not one of those guys that goes out there to start making a podcast about it.

Bosco Anthony:

Right, right.

Tye Alroe:

I like to keep it to myself. But the thing is, I’m always moving with the times and looking for the next best thing, which is an entrepreneurial thing. Sometimes that can be overwhelming for my business. I can get some change fatigue out of that. So, I’ve got to be mindful of that. So, now I’ve got my own coach outside of APB working on me personally, to go into more of a Chief Executive Officer (CEO) role, not as a Managing Director (MD) role operation, you know what I mean? So, I'm always working on myself, so then my business can be the best that it can be. But the biggest values in the business are respect and honesty.

Bosco Anthony:

Right. So, it's really going back to that personal relationship.

Tye Alroe:

I take everything personally.

Bosco Anthony:

Yeah. Fair enough. It's hard not to. It's hard not to, right?

Tye Alroe:

Yeah. When your last name's on the building company, it's hard to not.

Bosco Anthony:

Yeah. When your last name's on the building company, everything is personal at that point. Well, let's dive a little bit into the pressures that builders face today. Obviously, you're a mentor to many now, and you've credited a lot of the mentoring from APB that has really helped your success as well. Pre and post-COVID, obviously the demand for residential homes has increased drastically, even through the COVID era. And we're even questioning if it's going to crack at some point, or if we're sitting on a false narrative. But what are some of those pressures and challenges that builders face today in an industry of margin erosions?

Tye Alroe:

The biggest thing I see, and I'm very aware of this for myself, overreaching is one. Having a lot of people approach you. We would get probably two or three phone calls a day to build a development site for a developer. And that's literally the amount. Before COVID it would've been one or two a week. Now it's one or two a day. So, overreaching is one. Making sure you know your capacity for your team, not just for yourself, but for your team. But that's a good thing having so many leads come in like that, because you can kind of pick and choose.

Tye Alroe:

So, making sure the qualifying process is done right. That's a big one. I can see in the next 18 months there's going to be a crash. That's how I see it. That's how I'm gearing myself up for it. Which is scary in a way. We just had a team meeting on Friday. We've put on 33 people in 12 months; 33 employees in 12 months! So, for me, I'm always thinking 12 months, two years down the track. That's how I think. So, I'm working with my management team right now about what does 18 months down the track look like for us, and how are we going to start working on that today? So, that's the first thing.

Tye Alroe:

Erosion control is still happening with subbies and suppliers and everything. Some of our jobs we quoted three years ago and we're still working on them today. You can imagine there's erosion control there, so making sure that my numbers are up to date monthly is my biggest thing. Sometimes you might even want to do it fortnightly, but I'm just too busy to do it fortnightly, myself. So, for my PMs, their key performance indicators (KPIs) make sure they're on top of their budgets fortnightly and they prepare them for me at the end of the month. We work through each line item, each budget line item each month with my PMs and my Contract Administrators (CAs).

Tye Alroe:

The next thing that I see coming is people think I'm making money right now, but we're not. And then the work's going to dry up. And I think the work in progress figure and the cash flow's going to stop. I know three builders myself who went under last month. I can see it coming. I think Russ [Stephens, of APB] told me that 95% of his builders, when they first come to the APB, are on like 1% or 3% net margin or some statistic like that. So, it's fair to say everyone else in the building industry is running the same, because they are, because I'm getting beaten by other builders, which we don't really tender too much anymore. But when we were tendering, I was getting beaten by $150,000 to $200,000.

Bosco Anthony:

Wow.

Tye Alroe:

How does that even happen? I only had $200,000 in the job. So, I know there are guys out there who for one, are going to get hurt by this erosion with margins, but two, they don't have the systems in place when it does get quiet to keep on getting the leads coming.

Bosco Anthony:

Let me ask you this. What advice would you give your younger version of yourself getting into the industry today? Obviously, you have a lot to be proud of and a lot to be really impressed with, with everything that you've done. And you talked a little bit about your struggles with dyslexia as well. Obviously, that on its own is something to be really proud of, and it is very inspiring for other people who suffer with it as well. But what advice would you give for a younger version for yourself?

Tye Alroe:

I think what I've done, I've been very lucky in the way that I've got a natural personality to get sales done. I think if someone didn't have the same ability to get signed contracts and sales and didn’t have that personality aspect to it, they would've gone under. This is me just being super transparent and honest. We had some really tough times there. We still do occasionally, but there were probably three or four times where I thought I wasn't going to get out of it, because I was growing probably a little bit too fast and probably too fast for my processes. My own growth in the early days, probably just when I met APB, I was on a really high growth journey. So, if I had to go and give that advice to someone else, it probably wouldn't be the best advice to give someone else to do what we've just done.

Tye Alroe:

We've grown the business by a factor of 10 every year for the last seven years. That comes with a lot of stress, a lot of pain. The last two years, from the last two years to today, I've fully committed on my business. I've cut my social life down. I've done a lot of things in my own life to get to where we have gotten to. So, there’s a lot of sacrifice there. So, my advice would be make sure you’ve got your ducks in a row and you’ve got the right support around you and grow at a pace that you’re comfortable with. And when you feel like you’re not, you’re growing too fast, you’ll start seeing mistakes pop up, just look at those mistakes and take those mistakes on board. And that might be a trigger to say, “Slow down a little bit and stop taking on more contracts.” Because it can get out of control.

Bosco Anthony:

My final question now, and this has been a really unfiltered, very insightful interview as well. I really, really appreciate your honesty and transparency here. Any wise words for our listeners out there? Obviously, we have an international array of audiences, but for people in Australia and the building specific space, what words of advice, final words of advice, do you have for this interview today?

Tye Alroe:

Just keep on trucking.

Bosco Anthony:

Just keep on trucking.

Tye Alroe:

You’ve just got to keep on tearing it up every day. Make sure your main KPIs in your business are performing. Your sales, your operations. And just make sure you're staying ahead of the game and just keep on talking to people out there. Keep on talking to the suppliers and all that, and make sure you're all over it, because it's not going to be like this forever.

Bosco Anthony:

Right. Well, I really appreciate your time, Tye, and thanks for being with us today. We really love the unfiltered perspective. And really wish you all the best with where you're going as well.

Tye Alroe:

Awesome, Bosco. Good to be here, mate.

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 http://www.associationofprofessionalbuilders.com. See you next time.