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The Well Built Series is a special podcast designed for decision-makers in the construction industry, as well as those aspiring to be leaders. Hosted by Chad Prinkey and Matt Verderamo, this series delves into the best practices perfected by successful contractors. Join us as we explore the “Do’s” and “Don’ts” that transform good companies into truly “Well Built” organizations. Whether you’re an industry veteran or just starting out, this podcast offers valuable insights to enhance your construction journey.

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If you've ever been a part of a project team that doesn't communicate and where every entity acts selfishly, you may have thought, "there must be a better way." You're not alone with that thought, and you're right. There is.

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Guest Jeremy Owens

Topic: Peer Networks

Transcript:

Speaker 1: 00:00

It's morning huddle time. Jeremy, thank you so much for being here this morning, man.

Speaker 2: 00:04

You're welcome. I think it's morning. It's still dark here in California, but.

Speaker 1: 00:07

Right.

Speaker 2: 00:09

You're.

Speaker 1: 00:09

You're. Did you do the. Did you do the all nighter, A Red Bull fueled? Just.

Speaker 2: 00:14

No, we talked about that. And to your advisement, that was not a good plan. I took a couple hour nap.

Speaker 1: 00:20

There you go. That's not bad. Couple hours a night. That's all anybody usually gets, Ryan.

Speaker 2: 00:25

Whatever. I'm a gamer.

Speaker 1: 00:27

I really appreciate you being here. This is awesome.

Speaker 2: 00:29

Yeah, no problem.

Speaker 1: 00:31

So we were talking a little bit. We were talking football. Just a little bit. I saw that helmet behind you. You're. You're begging for. You know, and I'm sorry.

Speaker 2: 00:39

Yeah, right there. Yeah, no, it's. It's one of those things, man. One and done is so difficult for football, but I know there's a lot of hurting fans right now. I'm currently one of them. But, you know, credit to the Niners, they. They whooped us and we didn't deserve to win. I'm not a, you know, whining about the call or anything like that, whatever. But it's now, now it's next season. I gotta wait till. So that's, That's a little rough.

Speaker 1: 01:03

It got really exciting there at the end, man. I was.

Speaker 2: 01:06

I like, their, Their compete in the end, I guess.

Speaker 1: 01:09

Yeah. I mean, look, it's. I'm. I'm a Steelers fan and we did not compete.

Speaker 2: 01:18

Not really.

Speaker 1: 01:19

Not really, though. We all saw that coming. That was. That was. At least. We were like, all right, we've made the playoffs one more week to, you know, to get destroyed by the Niners and by the.

Speaker 2: 01:30

By the Chiefs and to say goodbye to Big Ben, too. He's got. He's got to go.

Speaker 1: 01:34

Bye.

Speaker 2: 01:34

Bye.

Speaker 1: 01:34

Yeah, he's. He's. He's got good dude.

Speaker 2: 01:37

Yeah, he's.

Speaker 1: 01:37

He's our. He's our guy. But he's got.

Speaker 2: 01:40

He's.

Speaker 1: 01:40

He's got. It's time to hang him up. It is time. He knows that. That's good news. So we're the joys of live streaming. I just got a text from Stacy. She's got kids stuff she's wrangling through. Oh, there she is. I was just. I almost got away with not telling this story. Thank you so much, Stacy. I know it was hectic this morning.

Speaker 3: 02:02

I know. I hope I didn't panic you.

Speaker 1: 02:04

Yeah, I'm sweating, but what else is new?

Speaker 2: 02:07

Not me. Not at all.

Speaker 3: 02:09

I know, of course.

Speaker 1: 02:14

Jeremy's like, I'm way too tired to sweat. I'm good to go. All right, so we're getting started just a minute or so behind where we normally would at this point. So I'm gonna push forward and jump in. So I'm your host, Chad Frinky, alongside my partner and producer, Stacy Holzinger. I. I think you know, and we have our guest today is Jeremy Owens. And. And Jeremy has a couple of cool things going on I'm gonna let him tell you about. But today's session, or, you know, today's show that is, is geared around the importance of having a contractor peer network, a contractor peer group that you can lean on of trusted people, and the impact that that has when you do and you don't have a peer group. And so, just as always, Stacy is going to engage with our live viewer audience and. And please ask questions along the way. Engage with Stacy. Stacy's job is to capture the best and most interesting thoughts and questions from our audience and. And. And pose those in the final minutes of our session. So, Stacy, anything you want to say before I pop into my conversation with Jeremy?

Speaker 3: 03:32

I'm just excited about, you know, what you're going to bring to the table today. I know a lot of people over the years have wanted some type of community, you know, digitally or, you know, they looked for LinkedIn groups or Facebook groups for. To meet construction people, and we could not find something like that. So I'm interested to see what you're going to share with us.

Speaker 2: 03:55

Awesome. Thank you.

Speaker 1: 03:56

All right, here we go. So, Jeremy, US Construction Zone, which I know isn't your only gig, but, you know, is. Is, you know, something that is. Is obviously near and dear to you. Give us a little bit of the background. What is US Construction Zone, and. And give us a little bit of background on you.

Speaker 2: 04:14

Yeah, sure. I grew up in. In remodeling. I'm the third generation, so I own a remodeling business in Folsom, California, called Three Generations Improvements, and we do siding, windows, decking out here. It's been a awesome family business. I work with my dad. My grandpa has since retired, and unfortunately, we lost him this last year. So, you know, been a very blessed to have a family business and a dad that I totally admire. So been enjoying that part of my business and that part of my experience. And like I said, we have roots, started from the 50s. My grandpa started in 1956, my dad in 72, and myself in 2002. So it's just been a long history. It's been in my blood. Enjoyed remodeling every step of the way. US Construction Zone came kind of on the heels of. I went to a trade show and we were kind of doing a roundtable with other remodelers. And you know, on the way out, we were exchanging business cards and a gentleman from Tennessee said, hey, you know what? I wish there was a better way for us to connect through the year, you know, and chat about these things. And you know, that kind of idea popped in my head and just kind of rolled around there for a little while. Pandemic hit, you know, our connection point really went away. And I was thinking, man, we got as an executive, we don't really have a construction focus group. There's, there's everything, there's LinkedIn, there's, there's so much to do, but not really specific to us. And so I really started developing it during the pandemic is when I really ramped up development and just launched in October and it's been a fun ride.

Speaker 1: 05:57

That's awesome.

Speaker 2: 05:58

Yeah.

Speaker 1: 05:58

So, so this combination of longtime generation, multigenerational family business and then launching this new endeavor of U.S. construction Zone to create, you know, better ways for contractors to connect. Yeah. Leads to really what, what you and I are so interested in, in, you know, talking about here, you know, this morning, which is on some level the iteration of the contractor to contractor network.

Speaker 2: 06:37

Yeah.

Speaker 1: 06:37

Over the years, and you've gotten a chance to see it firsthand, I'm sure, hear about it. Countless stories and examples.

Speaker 2: 06:44

Yeah.

Speaker 1: 06:45

Over the course of time. The, the, the, the, you know, our, our parents and grandparents were so much more networked in the business community in, in a really grassroots way than, than our, I'll call it our incoming generation.

Speaker 2: 07:13

Right.

Speaker 1: 07:14

Is what did that look like when you think about, you know, your dad and your grandfather. What, what, what did their peer networks look like?

Speaker 2: 07:23

Oh man, you're right. I mean, with, with no Internet, if you weren't out, you know, skin to skin, you know, saying hi to people, you didn't have a network. So it was Rotary Club meetings, it was, you know, local community center mixers. It was multi level marketing. It was like all of these things is what I grew up. I mean that, that's just how you met people. And then, you know, it's funny, this thing probably if we have some young people listening, they had what's called a Rolodex. And the Rolodex is where they stored their contacts. That's where you would meet somebody, you'd get a business card, you would write, you know, their information, you write where you met them, and you would say, hey, call this person if you need X advice. And that's how they, that's how they had their contacts and they had a daily planner and they, you know, it was just so strange because watching what they did to, to hustle was so much more different than what we do to hustle. I mean, it was, you know, like I said, you had to be actually face to face with somebody before you had a network connection. I mean, unless you went to a trade show, you had to get involved in the community. And unfortunately, I don't think there's a lot of involvement anymore. Like just, you know, from a, from a local mixer standpoint, I don't really see that.

Speaker 1: 08:42

Yeah, it's, it's. I mean, I, I'm close with several different associations in the, in the building industry. There's no question that associations are talking about the importance of engaging the next generation and you know, the, I guess, sort of natural pushback that the younger generation has toward these types of what I'll call grassroots, you know, in person, physical local networks. That. Yeah, it is different now that, that, that in, you know, your grandfather, if he wanted to, if he ran into a challenge in his business, whether it was in the field or whether it was, you know, a business oriented challenge, he picked up the phone, he flipped through the Rolodex.

Speaker 2: 09:40

Yeah. Yeah. Without hesitation. Yep. Yep. Yeah. How weird is that? That the phone was the only way to connect, really? I mean, unless you, you met, you had a coffee meeting, it was like you had to pick up the phone to set up anything. Right. I mean, the funny thing too, I would ride with my dad on calls and he had a bunch of quarters in his pocket and there was quarters in his car. And you know, you would have to, he'd know where all the best payphones were. You know, I gotta stop off and make a call. Like, how weird is that? Like just, just, just the roll of quarters. I mean, he didn't, we didn't have cell phones and he had, he had the first, you know, giant brick phone, you know, in the, in the car. And that was wild. But it's just so strange how in three generations the business looks that there's nothing that looks similar.

Speaker 1: 10:29

Yeah, it's. Evolution did not prepare us for this. Speed. No, for, for the, for the, for what we're dealing with now and adjusting to. So for all the benefit, for all the upside that we get from technology. And the benefit that I can just pull out my, my new, my new phone is this is not a phone like, like our, like, you know, this is a, this is a device that attaches us to the world and it's a powerful tool. It's a wonderful tool. This is, you know, absolutely not technology bashing. But, but what I that same situation, I run into a business problem today, I'm much more apt to Google it.

Speaker 2: 11:09

Yeah.

Speaker 1: 11:12

And when you think about the number of questions that are just totally inappropriate to try to get answered by a search engine.

Speaker 2: 11:29

Right, right.

Speaker 1: 11:31

That's where the value of the peer network still exists. Right? Like that's where, that's where, you know, so yeah, if, if, if I'm interested in, in how am I going to convert this, you know, metric measurement to, you know, an empirical measurement, you know, system. Google is fantastic for that.

Speaker 2: 11:51

Yeah, perfect. Yeah.

Speaker 1: 11:52

Or any number of your apps are fantastic for that.

Speaker 2: 11:54

Yeah, yeah.

Speaker 1: 11:55

But if I'm interested in when is it the right time for me to hire a VP of operations.

Speaker 2: 12:02

Right, Totally. Right. I mean I, Google for me is, is, is so much more salesy than it used to be. And, and there's a lot of search engines. Right. I mean, using Google loosely. But yeah, you go to Google for, for some of these executive questions we have and you're going to get sold. It's going to be businesses, it's going to be apps, it's going to be things basically you have to, to pay for to get what your, your question is. And you're not going to get a peer that's going to come out and say, hey, I got, I can help you with that. You know, ping me. You know, there's, there's no people on there. And so this is really the idea is like we need that people connection and a personal thing is as close to personal as you can get without, you know, skin to skin thing. And that's where I'm, that's where I'm headed.

Speaker 1: 12:51

Okay, so, so enter social media now. Social media has, has, you know, obviously, you know, blown up in the past two decades. You know, how has social media filled the gap? And, and what are the, what are some of the, the I guess risks associated with trying to, you know, fill that peer network need in a social media platform.

Speaker 2: 13:12

Yeah, it was strange. 2003, MySpace was invented and it completely changed the landscape from then on. It was like a mad dash and obviously, you know, the writing was on the wall that we were going to change the way we communicated and that's when it just. The in flood of all the other different social media apps came out and really it was unfortunately it was a mad dash to get connections. It was like, I want as many connections. I don't care what industry, I don't care if we have any like, you know, similarities at all. It was just like I want to have a thousand people, you know, and so what happened was with wherever you went in socially, you just wanted to get a lot of connections and whether that was LinkedIn, Facebook or whatever. And unfortunately what that did is that did not prepare us for a pandemic. It did not prepare us for having political discussions. It, it prepared us to fail. It just, we set ourselves up to have this fake social media Persona and unfortunately that's not real and I think it's crumbling right now and I think that I'm frankly, I'm kind of glad it's, it's changing a little bit. So I think it was not a great way to network.

Speaker 1: 14:25

The. I've, I've had some visibility into speaking about the building industry. There's, there have been attempts and I think, you know, with varying levels of success, there have been attempts to create, you know, communities, online communities within these social media platforms. Heck, we're in one right now. Right. Which is that in, on LinkedIn in Stacey and my, you know, sphere of relationships, we, you know, I think if you looked at my connections, it'd be 94%, you know, building industry people that were, we, we've got these very, I think, personalized kinds of communities inside these broader social media outlets.

Speaker 2: 15:17

Sure.

Speaker 1: 15:19

And, and I think there have been some that have been successfully created. I think there have been some that, you know, fizzled. And at the end of the day, I think one of the biggest challenges that people have in social media is sorting out who is credible. You know, so when I need advice and I want to turn to an online peer network, where do I turn and who is actually credible? So, so talk about how us construction zone fills a different kind of need. It just give us a little bit of a. Yeah. Context on that.

Speaker 2: 15:54

Sure. Yeah. I think you're right that there's, there's groups everywhere. I think that it's been hard to get traction. I think part of the, the difficulty is that social media in itself is very distracting. So you know, you, you have a subset group in there and, and before you know it, you're getting all these pop ups and there's messages flying at you and it's just hard to focus. It's just a Very broad group. And so when you're with, you're within, like LinkedIn for example, you know, you have real estate agents, you have building industry, you have your mom, you know, all these, all these people that are, that are out there and pining for your attention. And unfortunately there's a lot more ads, there's a lot more push, there's a lot more bots and things that are coming your way that aren't even real people. So I think that that's distracting. So what I wanted to do with US construction, I would say, you know what, it's for all aspects of the construction industry, all, you know, really executives, management level people to come together in one place. And then eventually I want to have the members enough where we can create those subsets of, hey, you know, I want to create a siding and window group or I want to, you know, get a little bit more personal with these folks. But to the credibility piece, it's just going to take time. There's no way you're going to get a message from someone and just go, I trust it. You're going to just have to get to know these people on a personal level. And that's going to take a little bit of time. That's going to take a little bit of back and forth and, and before you, you take that as, you know, as a good vice or bad advice. But ultimately you just have to spend some time and invest in other people. And I think that's what needs to happen if you're really going to have a robust networking group.

Speaker 1: 17:32

Awesome. Awesome. Yeah, I agree with you. I think, you know, I'm excited about what you're doing. I think, you know, creating a space where I know this is for people who are trying to accomplish the same things I'm trying to accomplish, that we're not going to get on there and end up having a political discussion or we're not going to end up on there, you know, arguing about sports or whatever. But, but this is, it's a very specific place where can go to get a, you know, get my needs met. So when I want to talk about what kinds of insurances I maybe should be carrying or I want to talk about how people are navigating new compliance rules in my jurisdiction or fill in the blank that this is a place where I could potentially go ask my questions and, and, and find people, you know, who, who have a high likelihood of, you know, experiencing those things, caring about those things. And, and then when I see the advice, you know, credibility to me is like it's such a fascinating concept that I know for me, when I have, I, when I have anointed someone in my own brain. Right, right. With just ultra credibility. Like whatever they say on a certain issue, I won't research, I won't. I, like, I'm just gonna do it.

Speaker 2: 18:52

Right.

Speaker 1: 18:53

And there are people, I think if all of us think about it, we have people like that in our lives. And that's a gift. I mean, it's such a gift because it accelerates our ability to make decisions and to make right decisions, you know, and things along those lines. So, so what I'm hearing you say is as it relates to credibility, it's not, you know, that's something that has to be earned. There's no fast forward button on earning credibility. And I, and I happen to agree with you.

Speaker 2: 19:20

Yeah, I mean, you said it perfectly. I mean, I struggled myself with a network when I was, when I was coming up. I mean, being a business owner, I felt alone a lot. I'm on an island. Right. I, I have this decision to make and I look to my left and my right in my business, I can't really ask them. So. I have struggled with having real mentors. Really. That's what it was. The word for me is I want mentors. I want, like you said, if it comes to marketing, I want to call this guy. If it's an HR thing, I, I know I have this galaxy. So now it's like you have an actual network of people supporting you in your business decisions. And if you don't have that, then you have Google and then you have you learning it yourself. And I just don't have time, especially now, to, to go learn something new. I don't, I don't want to. I just want, I'd rather ask somebody that's been there, done that, and, and have actual people that I can network with to make decisions and, and so.

Speaker 1: 20:18

If we do it right. If we do it right. I think what you're saying is that instead of using, rather than thinking of technology as I use technology, instead of going to, you know, rotary events and, and, and building a network. Right. What, what I think we're saying is that if we do it right, we can actually use technology to accelerate that process and, and not to replace it. Right, Right. Because at the end of the day, having person to person, individual, highly trusted relationships of mentors, partners, friends, advisors that you're able to surround yourself with is the actual human beings behind it, not Google searches is something we desperately need.

Speaker 2: 21:06

Right. Yeah. And it's cool. Almost everybody that's, that's in the network now. I've had a zoom call with like that. That's been one of my strategies is when someone asks or I ask them, I take every meeting, I take every meeting and I just meet people and I don't know if I don't really know them, I don't know if they're going to bring me any value, but every single time they do, they say, hey, I'm gonna, I want to put you in touch with this person or, oh, this idea. And then I've been able to network people together. I've been able to say, I have someone for you for that. And so I, that's part of the strategy is I am investing a little bit in people. They're investing in me, and it's just creating all these win wins around me and it's super rewarding.

Speaker 1: 21:46

So obviously you're the founder of this thing and, and, and while I do, I think that's an impressive step. I'm also not surprised to hear that you're making that kind of investment right in, in, in your network. But I have a, just a, a, as a, as a member, how do I be a good member? How does somebody be a good member of a, of a peer community, of a peer network?

Speaker 2: 22:10

Yeah, I think, like I said, you got to show up, you got to spend some time, you gotta, you know, ask questions, answer questions. I think they're, they're seasoned veterans in construction that have a lot to offer and they're in a, maybe in a different position than a lot of us are, where maybe they have, they can carve out 15 minutes a day to be helping a fellow contractor to, you know, get to the next level. I think there's some of us, like, and maybe in my generation that I'm still need to soak up more knowledge. I'm not there. I'm not a finished product. So I'd rather, you know, I'd rather ask questions right now, but I think everyone's in a different place. But you have to spend some time and like I said, invest in some people and I think you'll get it back. I'm certain of that.

Speaker 1: 22:56

I'll say this one last bit, and I want to bring Stacy in because I know we've had some great engagement from the audience this morning. I try, and anybody in my personal life knows that, that it's something that I talk about privately a lot. I try very hard to stay a learner and to stay, you know, and to recognize there are so many things I don't know. One of the ways I think I really appreciate when people engage in, in a peer to peer environment is with humility, where they're sharing their experience, where they're sharing their perceptions, where they're sharing how they view things, but where they also have the awareness to recognize that, that that may not be universally true and it may be unique to their experience. And I think anytime I hear somebody give advice myself, chief among those. Right. Anytime I hear me give advice and anybody give advice, I always try to. It always resonates best with me when it has that layer in there of, you know, room for error and recognition that, you know, it's an opinion or a personal experience and not a hard and fast, you know, mathematical equation.

Speaker 2: 24:23

Totally. Right. I have a.2 teenage daughters, so 100% I can't just give advice anymore.

Speaker 1: 24:30

Yeah, you've got to get very artful with how you do getting teenagers to care about what you're saying.

Speaker 2: 24:36

Yeah, exactly.

Speaker 1: 24:37

That's awesome. Stacy, I know we've had a lot going on in the chat this morning. I think you've, you got more than you bargained for with some of those questions. Great work. I, I'd like to, you know, hear some of the things that we have going on from the audience.

Speaker 3: 24:51

Yeah, I have a couple questions. So residential, commercial, they're kind of two separate worlds. Does your platform cater to both of them or does it geared towards, you know, one or the other?

Speaker 2: 25:07

Yeah, so. Good question. I. This is for all aspects of construction. So any, any field, you know, if you're commercial, you're residential. I, I want them all because eventually, like I said, I want to be able to create, create more of those private communities. So I have the ability to create private groups as well. So for those trade organizations or those, you know, maybe it's a, maybe it's a business or that wants to have a private community as well. That's invite only. Then you can have that too. So I want to get to the point where really we're talking about executive things and you'd be surprised how similar a lot of those things are, no matter what part of the industry you're in. I mean, you could be in distribution or you could be a remodeler and you're having problems with employees. You know, there are very similar things that's going on right now. Labor shortage, you know, supply issues. Those are all work common. So I think that there's a, a little bit of a, it's, it's just the construction industry right now is so fractured with like, hey, I need to be a member of this trade organization and then I can get in that forum or I need to buy this software and then we can get. This is inclusive. And so I want it to be inclusive to start and then be able to narrow down into that private community as we go.

Speaker 3: 26:24

So another question is this comes up a lot before when people were trying to find communities online. Just as you're doing, the groups end up getting spammed with like tons of just sales pitches. So how do you filter that kind of thing? So you know, we're actually focused on thought leadership.

Speaker 2: 26:43

Yeah, it's a good question. It's very explicit in my communication with people is that this is a peer network. This is a person to person thing. There, there's not, you know, there's no bots that's possible. There's no, you know, if, if we find somebody get there and luckily I haven't had that yet, then I'm going to have a personal conversation about, hey, if you, if you have something to offer then you just need to, you need to, you know, maybe ask it in a different way. You need to say, hey, hey, I would like to get some feedback on this I'm working on or you know, instead of it being like, you know, you spamming people. And so far it's been really good because my, my communication has been like, I don't want it to be like LinkedIn where you feel like you're being, you know, partly sold by, by a large amount of the audience. I don't want that. So it's very explicit in my communication with people that this is really about a person to person, people to people conversations.

Speaker 3: 27:38

Another question too. We were talking in the chat about, you know, there's various types of software up there and people like to search on the Internet for problems and how to come to a resolution. And this1extra, CAD.com I believe is a forum for everyone that uses this particular software so they can. I don't know if your platform has like a search engine where if I'm struggling with something I can put in keywords and then find a conversation where someone solved the problem already or.

Speaker 2: 28:10

Yeah, yeah, that's what's cool about this is going to be a little mini construction Google. I mean once we have. And not only that I have, I have articles from all different aspects of construction in there in the feed constantly. So you're being fed information and then yes, there's a search engine that says hey, I'm, hey, does anybody use HomeAdvisor or whatever the question may be? And you will get articles and you will get comments already about that topic. So I do want it to be very useful. And then eventually this year we're going to be having, you know, education pieces come. We're going to partner with people who are, who are educating business owners, and we want to make it so that it is valuable. This isn't just a social thing. This is something that I want people to leave and say, hey, you know, that helped me, that helped my business. That's really what I'm looking for.

Speaker 3: 28:58

Cool. That's all I got for questions.

Speaker 1: 29:02

I, I just wanted to comment that, you know, there, there's. And I can certainly fall prey to this. I don't know if, if our parents would have fallen prey to the same traps or if this is something that is, you know, newly developed. This for as much for. As reliant as we've become on, you know, Google, as an exam, that's obviously, you know, a generalized term for utilizing the Internet to search solutions to our own problems. As reliant as we've become on that, what it's also given us to some extent is a sense of independence that, you know, I'm doing my own research and I'm, I'm identifying solutions to my own problems and I'm reading up on these things and I'm becoming qualified to solve these problems. And as a business owner, or frankly, anybody, but as I, in the context of being a business owner, one of the things that cracks me up is, you know, you're solving pro. You're taking all this time to become an expert to solve a problem that has been solved thousands of times before.

Speaker 2: 30:11

Right.

Speaker 1: 30:11

By really, really smart people.

Speaker 2: 30:14

Right.

Speaker 1: 30:15

And, you know, I really appreciate the gusto that you're, that you're out there trying to solve your own problems.

Speaker 2: 30:22

Yeah.

Speaker 1: 30:22

But for the love of God, you turn to the geniuses around you.

Speaker 2: 30:27

Yeah.

Speaker 1: 30:27

And, and, and, and save a massive amount of time.

Speaker 2: 30:32

Right.

Speaker 1: 30:33

And have the humility to just steal somebody else's stuff.

Speaker 2: 30:36

Yeah, exactly. I mean, and nine out of 10 of those people failed. They learned with failure. They did not learn because they figured it out. They learned because they stepped in a giant landmine.

Speaker 1: 30:46

And, and I, I think there is, you know, a, a big lesson that entrepreneurs today need to learn. And, you know, not everybody, obviously, this is, you know, I don't want to make my problems Everybody's. This is clearly one of mine is just, you know, having that awareness of what, what you are and are not expert in and what it does make sense for you to invest on becoming expert in and what it just makes sense to. To. To just find out what the experts do.

Speaker 2: 31:20

Yes.

Speaker 1: 31:21

And so I, I love what you're doing, man. I think, you know, creating this kind of online forum, you know, gives us opportunities to create some individual relationships. I know that Stacy and I have both created some wonderful individual relationships as a result of doing the Morning huddle. Yeah. Where you know, people who have engaged, you know, through the, you know, the online community have become, you know, one, one to one, you know, in person friends. And, and so I look forward to, you know, your success story on putting more of that stuff together. And, and I think it could be really complimentary with some of the stuff that my company, well Built is doing with. We have, you know, in person, peer group environments and I, I'd be really interested in finding ways to. To, you know, link up and, and you know, find ways to complement.

Speaker 2: 32:16

Sure. I know. Networking guy.

Speaker 1: 32:20

Awesome.

Speaker 2: 32:21

Thanks.

Speaker 1: 32:22

All right, great. Yo, thank you so much for being here. Any. Any parting words for us, Jeremy?

Speaker 2: 32:26

No, I just, you know, I appreciate the opportunity. Like I said, you know, taking every meeting and being very present for people. It's been, like I said, it's been so rewarding for me. So whatever happens with U. S Construction Zone, I'm already feel like I've gotten more out of it. So I'm, you know, like I said, I'm just like on this weird ride and it's like a roller coaster. But I'm having a good time, so I guess I must be doing something right. Very good.

Speaker 1: 32:53

Thank you so much. Stacy. Anything that you want to say before we jump?

Speaker 3: 32:57

Well, we have one more episode left, right?

Speaker 1: 33:00

Yes. So next week we're going to be. Next week we're going to be talking about change order management and it's going to be a fascinating discussion with a company that actually gets hired with. With the head of a group of a company that actually gets hired to manage change orders and you know, project controls actually for, for. For, you know, large scale commercial projects. It'll be fascinating discussion about how to simplify the change order process, how to avoid conflict and probably most importantly to everybody who watches, how to get paid. So, you know, let's, let's make sure that you visit us for that final episode of this season. We'll be taking two months off and we'll be back at the beginning of April, so we'll be, we'll be wrapping up here next week. Thanks again, Jeremy. Thanks, Stacy.

Speaker 2: 33:54

Thank you.

Speaker 1: 33:55

We'll see everybody next week.

Speaker 3: 33:57

See ya.

Speaker 2: 33:59

Bye.

Speaker 1: 33:59

Bye.

Join Host Chad Prinkey (Well Built Construction) and Co-host, Stacey Holsinger, (Steel Toe Communications) every Tuesday morning at 8 a.m. EST. on LinkedIn as they interview top A/E/C industry experts. Guests can participate in the conversation live!

Transcript:

So we're two days before Thanksgiving for the morning huddle. And, you know, it gets to be this time of year, and, you know, it's. At least for me, today and tomorrow is cram everything in before Thanksgiving. What's today and tomorrow look like for you guys? 

S

Speaker 2

00:26

Pretty busy for me. This is actually usually my favorite week of the year. Wednesday is like a half day kind of feel. But not this year. It's gonna be. 

S

Speaker 3

00:38

Yeah, not for me either, unfortunately. Me and Josh just realized we're both headed to Philadelphia to visit family in Bucks County. This is the first year that me and my brothers are taking over Thanksgiving and cooking for my mom. So my mom gets to relax, but we're using her house still. So is. 

S

Speaker 1

01:00

Do you think your mom will actually relax? Because I know if. Like, that sounds like a really cool theory for my mom, there's zero chance she would relax. 

S

Speaker 3

01:07

Exactly. I'm sure she's. You know, she says that she's going to be busy with my son, but I know she'll be popping in the kitchen checking. 

S

Speaker 2

01:16

And for the record, I said I was excited to go see my family. Stacy, I didn't say that. 

S

Speaker 3

01:23

Butts. 

S

Speaker 2

01:25

It was. 

S

Speaker 1

01:25

She just didn't. She didn't say. 

S

Speaker 2

01:27

I didn't hear it. I didn't hear it. 

S

Speaker 1

01:28

That's all. 

S

Speaker 3

01:30

Well, I have heavy responsibilities this year, so. 

S

Speaker 2

01:34

So. 

S

Speaker 1

01:34

So I got. I. I started on total accident. I started a little bit of family drama yesterday. We've got, of course, the obligatory family text thread, and I saw this article on how to prepare, like, the best Thanksgiving turkey, and I was like, oh, I'll send this along. And of course, it was like, my mother was like, sure, we can change the way that I do Thanksgiving turkey. Evidently, that's not good enough for you. And I'm like, no, I'm. So there was no agenda? No agenda. 

S

Speaker 2

01:59

It was awesome. 

S

Speaker 1

02:01

All right, let's go ahead and get rolling. For Tuesday, November 23, 2021. Welcome to the morning huddle. I'm Chad Prinky alongside my partner and producer, Stacy Holzinger. Stacy, how are you today? 

S

Speaker 3

02:20

Good. Great. 

S

Speaker 1

02:22

What? 

S

Speaker 2

02:23

So. 

S

Speaker 1

02:23

So going. Going to Bucks County. Is that, like, the standard? You always go to mom's? 

S

Speaker 3

02:28

Yeah. She would not give up her holiday for anything. For. I mean, she's an excellent cook, so I don't think anybody really wanted her to give it up. But this year, she's like, I'm taking a break. You guys got the kitchen. 

S

Speaker 1

02:41

So, you know, it. It's. It's. My best recommendation is to screw it up that way next year you get to return back to traditional. 

S

Speaker 3

02:49

That's a good idea. 

S

Speaker 1

02:51

That's my. That's what I do with the dishes when I'm given that task, you know, Anyway, so. All right, cool. So, Stacy, you know, Stacy's role, as always, is to come in that last 10 minutes and capture all of the awesome questions that come in throughout the course of the session. So for those of you who are viewing live right now on LinkedIn Live, please make sure that you get comfortable with that chat function. Fire your questions across. We want a chance to address those throughout the course of the session today. So, Stacy, we'll see you with 10 minutes to go. Thank you so much. I know you'll come locked and loaded with some good ones. See you soon. 

S

Speaker 3

03:33

See ya. 

S

Speaker 1

03:34

So today my guest is Josh Hauserman. Josh. Josh is a good friend of mine personally, but he is the head of the bonding group for HMS Insurance Associates, where he leads a team of 11 agents and three other support staff that help to make those agents successful. And Josh is also always behind the scenes to help not only his own clients, but the teams, the rest of his team's clients, to solve complex business and construction problems, you know, to help these contractor clients to get things done. I actually knew Josh before I ever met Josh through my clients, who anytime in a conversation over the years, you know, I've been serving the construction industry for 12, 13 years. 

S

Speaker 1

04:23

Over that time frame, I would get into conversations with contractors and talk about their most trusted advisors, you know, their lawyers, their accountants, things like that. And I would hear Josh's name a lot. So we shared a lot of overlap with our account base. And eventually I just thought, I gotta meet this guy. People talk about him. My clients speak about him the way I hope they speak to others about me. And so Josh and I got to know each other. He and I share so many views about the building industry. He's taught me a lot personally so that I've been able to better serve my clients as an advisor. So when I invited Josh to join, I was really excited that he accepted. We're here to talk business, and today's topic is Common Threads. 

S

Speaker 1

05:07

The most bondable contractors, from the view of someone whose team writes somewhere around $8 billion in bonds a year. So, Josh, before we get rolling, give us any additional intro on yourself to give some context. Who are you beyond what I've laid out for our audience. 

S

Speaker 2

05:28

Yeah, you nailed it. First of all, thanks for having me. And also thanks for hosting our client seminar last week. For additional background, I've been here for close to 17 years now. I started out just handling house account leads and basically supporting our producers. I was in that role for about five years and gave me a great deal of experience. I have my master's degree in accounting, which helps a great deal, as you can imagine, in this field, and ever since then been off and running. 

S

Speaker 1

06:03

Awesome. 

S

Speaker 2

06:04

So. 

S

Speaker 1

06:04

So I don't want to take for granted. There are going to be some people who are watching this morning or listening, you know, on the recording that are construction and bonding gurus. They know what they're talking about. Right. They've got years and years of experience in the industry. There are other. Also going to be some people who are kind of get the concept of bonding, but they don't. You know, they're not, they're certainly not experts. Could you give us like the 1 minute overview of what is bonding just to kind of give context to the remainder of our conversation today? 

S

Speaker 2

06:39

Yes. So I'll answer it as it relates to the construction industry specifically, but basically it's a credit transaction to give you like the Bond 101 answer. It's the underwriting is based on character capacity and capital. Character, meaning you're going to do what you say you're going to do. And you know, your references will check out, you haven't had a bankruptcy. Things like that. Capacity, meaning you have the labor, the equipment, the experience to handle the jobs in your backlog. And capital, meaning you have money. 

S

Speaker 1

07:14

Got it. And so a bond might be defined. 

S

Speaker 2

07:19

As what I would say. A bond in this context is synonymous with a guarantee. So you have a bid bond, which is a guarantee for your bid performance. Bond guarantees your performance of the contract. And a payment bond guarantees payment of subcontractors and suppliers. 

S

Speaker 1

07:36

Excellent. All right, cool. So with that as the backdrop, it's this, you know, question of credit worthiness. You know, that's going on. Capacity, character, capacity. And what's the last one? 

S

Speaker 2

07:50

Capital. 

S

Speaker 1

07:51

Capital. Character capacity and capital. Okay, good. 

S

Speaker 2

07:53

All right. 

S

Speaker 1

07:53

That's a good backdrop. So I think most. What bonding means to me. I think most contractors want to be able to brag about their bonding capacity. Most, most contractors, my impression is it's a way of sort of humbly communicating their financial stability, strength, trustworthiness, etc. As a bonding pro, what do you think high bonding capacities really signify when somebody says, you know, we've got X, you know, desirable bonding capacity? 

S

Speaker 2

08:28

Yes. First I would agree with you. I think it's a status symbol within the construction community. And really what it represents is staying power. And I would argue that the underwriting process is effectively a construction best practices checklist. You kind of, you get into a contractor's operation and you see, you know, look under the hood and see how they perform and, you know, all the upside, the downside, and everything else. 

S

Speaker 1

09:01

You mentioned best practices. Best practices in what way? What are some of the examples of best practices or the checklist? So if I were, if I'm a contractor, this is valuable information because there's a. There's clearly a list of, you know, are you doing things right that, you know, that underwriters are using? What are some of the things that are included in that kind of best practices? 

S

Speaker 2

09:28

Yeah, I mean, I would say it's in a word or two words, operational excellence. And that's in every department and throughout the organization. So that starts with, you knowing your costs and having a accurate accounting system, bidding, you know, having checks and balances in your bid process, obviously having the experience in the field, having the labor to support the projects that you're bidding. Good subcontractor relationships, whether you're a GC or a subcontractor, identifying risks on projects. And I think the biggest thing is you can tell in a conversation with a contractor if, when you bring up, you know, potential pitfalls or things that could drive a project to go sideways, if that contractor has a backup plan for their backup plans, I think that's the best way to put it. 

S

Speaker 2

10:21

So in other words, if, you know, I've been in meetings where there's concern about labor and, you know, we have a great crew here, but what if the next contractor over comes over and offers, you know, field labor $2 more an hour and, you know, they disappear one day, what do you do? So you have to think about scenarios like that. You know, how are you going to manage your subcontractors on the critical path? Yeah, just, you know, evaluating contract terms. You have to have controls in place and really just vetting not only project risk, but operational risk within your organization. 

S

Speaker 1

10:58

Interesting. I'll tell you one thing that I want to zoom in on is this idea as I listened to your checklist. Okay. Things went from in my mind, kind of, you know, basic to more and more complex as you kind of went down the line. So I'm, you know, just going through, like, knowing your costs. Gosh, I, I betcha that there's a substantial number of contractors that can't Check that box, you know, fully. So when somebody. And then there's, and then there's maybe the contingency plan for the contingency plan being that one's, you know, sort of really advanced. So if you've got knowing your costs as a foundational item, then there's contingency plans for contingency plans as something that is, you know, do you think about this at all in any kind of hierarchy? 

S

Speaker 1

12:00

Is that something that you know, look at or is that just my interpretation? 

S

Speaker 2

12:05

You know, I wouldn't necessarily look at it in that way. I would look at it more along the lines of you're only as strong as your weakest link. So if you think about it, if you, if there's 20 boxes to check and you check 19 of them, that one unchecked box could be the shortfall that takes a company under. So I, in my opinion, I think it's, you know, you try to have as much depth as possible in each line item. 

S

Speaker 1

12:32

Got it. So what. One of the things that I know, certainly most contractors spend a lot of time thinking about, and rightfully so, for lots of business reasons and personal reasons, is profitability. But what role does profitability play? Is it just one of the checkboxes? What role does profitability play in a company's bonding capacity? 

S

Speaker 2

13:02

It's huge, but it depends on the metric. So, for instance, I'm going to dig in deep and then I'll walk it back a little bit. But obviously profitability is paramount in the bond underwriting process because ultimately profitability enables a contractor to build their balance sheet. And once you have the working capital and equity, basically that effectively means that you do have staying power, and that's what getting bonded is ultimately all about. The caveat to that is you want to best practices relative to profitability. Except I'd argue one item that is counter to bond underwriting as it relates to profitability, and that's the return on investment metric. 

S

Speaker 2

13:50

Because basically you can drive that metric higher with a leaner balance sheet, which is counter, like I said, it's counter to bond underwriting where, you know, it's bond underrated based on balance sheet metrics and having the wherewithal to, you know, whether a bad job or, you know, weather downturns in the economy. And obviously all that starts with profitability. But that's one carve out that I'd say is ROI isn't necessarily a metric. But to answer your question, yeah, profitability is paramount. 

S

Speaker 1

14:28

At the risk of Going into real bonding. Geek land. Talk more about the ROI metric. 

S

Speaker 2

14:37

So we actually. Yeah, we wouldn't. Right. It's. So return on investment is basically net income relative to your equity or, you know, starting capital in the company. From my perspective, that's not, you know, it's cat. I say it's counter to our underwriting metrics because if you came to me and said you were going to start a construction business and you gave me two scenarios, one where you were going to put in a million dollars to start and another scenario where you're going to put in $2 million to start, I would probably recommend the 2 million, obviously depending on what you wanted to do. But that makes that checks that staying power box in a more effective manner, if that makes sense. 

S

Speaker 1

15:19

It does. So what are. Let me ask this question. I'm interested in what we can learn from the companies who consistently look the best in the eyes of underwriters. So for this audience that mostly consists of contractors and also people who, you know, deal with contractors on a daily basis, what can we learn from the companies who consistently are viewed as good risks in the eyes of underwriters? 

S

Speaker 2

15:55

I would go back to the, you know, the best practices approach. I think one of the very important things, and obviously this depends on where a contractor is in their life cycle and if it's a, you know, long standing contractor that has a, you know, long history of profitability, it's going to be a different scenario. And they might not need the level of advice. However, I mean, it comes back to operational excellence in every department. Right. So with your estimate going back to knowing your costs, I think that's imperative because you're making management decisions based on your performance. You're not going to know your performance unless you have accurate cost controls. You're not going to be able to bid accurately if you don't know all of your costs and know them accurately. 

S

Speaker 2

16:43

You're not going to know which customers to focus on or which scopes of work to focus on if you don't have those true cost figures. So I'd start there and then, you know, if you think about contingency planning, you know, having a stable subcontractors and suppliers having, you know, plan A, plan B, plan C, that also goes for capital as well. Right. Best practices would tell you to tell contractors to establish a working capital line of credit, but not necessarily use it and keep it for a rainy day. And that way if a project does go sideways or if there's a hiccup along the way, you know, you have an outlet. 

S

Speaker 1

17:22

I want to get back to this cost controls thing for a second, Josh, is that, you know, really practically, if I were a contractor and said I'm looking at myself in the mirror and I really don't have a handle fully on my costs, I get to the end of the project and I'm kind of holding my breath, and that's where I peek and see, like, did we do okay? You know, and some of them, it's even tougher, right? They get to the end of the year and they just, it's really like what's left, you know, if I'm in that boat, what are some tangible recommendations that you would have for getting my hands wrapped around my costs? Like, just what are some things that you've seen your clients do that give them better control? 

S

Speaker 2

18:05

That's a good question. Again, that would depend on the size of the contractor. But I think the easy answer is leverage technology. You know, whether it's having a project management system tied to your accounting system that ties to your bidding system and have everything integrated. From my perspective, I think doing a postmortem analysis is imperative. Right? That's how you know how your project teams are performing, how your customers, how valuable your customers are to you know, and types of work. So I would say leveraging technology. And the second thing is lean on trusted industry professionals. And in that world, it's obviously your construction oriented cpa. I think that's imperative. I think a lot of the time you'll, you can ask most CPAs if they specialize in construction. I would say most might say yes. 

S

Speaker 2

19:02

My recommendation is look at companies that you admire and companies, other contractors that, you know, you strive to be like them, and look at the industry professionals that they work with and, you know, start there for your cpa, for your attorney, for your, you know, construction consultant, bond agent, insurance agent. The whole night. 

S

Speaker 1

19:23

Makes total sense. Yep, I, I agree. I think, I think the answer, you know, said in maybe a different way is also don't. Don't try to go it alone. There's technology and there are professionals that are literally there to help you to get your hands wrapped around that stuff. And there's absolutely nothing that should stop you from reaching out to those folks. Just a quick reminder to our audience, please start firing in some questions from your perspective so that we can shift gears to that in just a few minutes while I move on to another question. So, yeah, what are the most common mistakes that you see contractors make that are most damaging to their bondability. 

S

Speaker 2

20:10

Good question. The short answer is losing money. But the situations that I've seen lead to losing money. It's any combination of trying to grow too fast, owner disengagement, lack of internal controls. A big one that I've seen is obviously jobs can go sideways. The construction industry is very dynamic. But if you see that there's a systemic problem and there's systemic risk, either on the, you know, specific scope of work that you're pursuing or a specific customer or type of contract, if you see a systemic risk and you do not address it's going to come back to haunt you. So I've seen that quite a bit. Yeah. And then just not, I guess the attitude, not having the attitude of I don't know what, I don't know. 

S

Speaker 2

21:05

I think obviously you need to be confident, but, you know, you have to have that little devil's advocate in your ear from time to time. 

S

Speaker 1

21:14

To me, it goes down to what I'm, how I'm translating what you're saying is. It goes down to, you know, working on your business. So when it comes to working on your bonding capacity, what you're not working on your bonding capacity, you're working on your business. Yeah. That's what you're really doing. And, and so if a part of what you want is to improve your bondability, which will enable more growth, which will enable more opportunity and profitability and all those different types of things, if that's what you're looking for you can't accept your things as they are today and say, yeah, this is just, it's what I know, it's what you know, this isn't what I do. I'm not going to be great at these things. 

S

Speaker 1

22:05

You know, one of the biggest problems or, you know, kind of, I don't know, nails on a chalkboard. For me when I hear is that like we don't, we don't want to overdue process. We don't. We just really don't. Like, we like, you know, kind of allowing our people freedom. 

S

Speaker 2

22:18

Right. 

S

Speaker 1

22:18

Which is to me, it's all. I'm not opposed to either of those comments, but usually when I look under the hood, what that is code for is like we like to wing everything. And, and that is a really good indicator of somebody that is. It's going to be really difficult if you have that mindset to actually work on improving, to actually improve your business because you're just Resisting adopting best practices and principles. So, all right, I want to open up the door for the questions that are coming in and toss the ball here to Stacy, who I'm going to bring back. Stacy, what do we got? What kind of questions do we have for Josh? 

S

Speaker 3

23:10

Sure. So what advice would you give a contractor looking to grow their bonding capacity? 

S

Speaker 2

23:18

The. And this actually ties into Chad's last question too. But focus on the bottom line. Don't chase revenue, don't chase the top line. Focus on the bottom line. Retain profits, establishment controls and systems. Lean on your trusted advisors. You know, you're just like we had mentioned, CPA, attorney, construction consultant, you know, bond agent, insurance agent, the whole nine, obviously leveraging technology. And I think the biggest thing frankly for me in life is just having a growth mindset and always trying to learn. You never want to be in a position to have the industry pass you by. And if you think about what it takes to maximize your bonding capacity and the goal of bonding companies in establishing a bond program with a contractor, it's staying power. 

S

Speaker 2

24:12

And I haven't talked to any contractors who tell me the five year plan and that includes going bankrupt in year five. Right. So the goals are aligned in that regard. The friction usually comes with the amount of capital that's required to retain in the company to substantiate a larger bond program. So I think that's the key. Profitability and retaining earnings and then growing from there. 

S

Speaker 1

24:34

So I have a follow on question regarding profitability. I totally agree with you that companies put way too much emphasis on top line growth and not nearly enough emphasis on what that ultimately means to profitability. But is there such a thing as too much focus on profitability? In other words, here, how about this? Are there costs that you wouldn't recommend cutting? You know what I mean? You're sort of saying don't do that, don't cut. 

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Speaker 2

25:12

So yeah, it's a good question. So you don't want to step over dollars to reach for pennies. Right. You don't want to try to maximize your profitability this year and sacrifice your profitability the following three years as a result. So obviously, you know, it's a balance. So when I say retain earnings and focus on profitability, that still requires leaning on your trusted advisors and industry professionals. Obviously there's a cost that comes with that. Leveraging technology, there's a cost that comes with that, but that's not, those are investments in my opinion. So I think differentiate between investing in the future, investing in your company. That's obviously imperative as it relates to staying power. But if you're looking to cut costs, do you need to go to an industry event across the country and stay an extra week, something like that? 

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Speaker 2

26:07

That's obviously not necessarily an investment in your company. So, yeah, to answer your question, I'm not saying cut all costs and pinch every penny. It's, it's, you know, invest in your company and keep an eye on the long term. 

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Speaker 1

26:19

And do underwriters get that? So if I'm able to, to show the underwriter, if I'm able to sort of say like, okay, yes, we did not improve our bottom line last year. We did 3% in 2020. We're doing it. We're going to do 3% again in bottom line in 2021. But I want you to see here this, you know, $140,000 worth of investments that we've made that I could have let go to the bottom line, but that we actually put into this training program that we put into, you know, employee raises so that we, you know, became more durable against, you know, rising incomes. And we didn't want to lose our key people to write. Do underwriters get that? Do they, you know, can you, do you get an opportunity to tell that story? 

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Speaker 2

27:06

Yeah, I mean, quite simply, that's our job as a bond professional and bond agent. Right. So a story like that doesn't necessarily jump off the page and, you know, it's not like it's highlighted in the financials. 

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Speaker 1

27:19

Right. 

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Speaker 2

27:20

But our job is to provide context around those financials. That's an easy story to tell. If a company's still profitable and making investments into the future. If it's a situation where, you know, like everything else, it's a balance. So if there's a scenario where, you know, you have a contractor who's lost money three years in a row and it's the same narrative all three years, like, it's not going to fly. So there's a balance there. But the short answer is absolutely, that's part of the story. And obviously it's an investment in the future. And, and obviously that matters. And that's ultimately what bonding companies want, is staying power and a long term view on things. 

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Speaker 1

27:55

Awesome. 

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Speaker 2

27:55

All right, Stacey, what else? 

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Speaker 3

27:57

Yeah, so Blake Radcliffe asked, with so many projects running over schedule and over budget, plus rising labor challenges, how are you calculating and managing risk? 

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Speaker 2

28:10

So I wouldn't say there's a set metric relative to that type of risk. It's, you know, let's have a conversation about how you're going to address it. So when I mentioned previously, you know, you have your plan A and your plan B and your plan C, that doesn't necessarily mean that plans B and C are still, you know, makes the. The job, whatever, you know, like a very successful job for you. But if it's something that keeps it from being a total disaster, that helps. So I think the biggest thing is just having contingency plans. So in other words, you know, with all the supply chain issues now, are you able to substitute products? Are you able to obtain supply bonds from suppliers, which, you know, in my world, it's. It's always mentioned, but I know in practice, it's. 

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Speaker 2

28:58

It's more challenging than it, you know, than it would otherwise appear. But just things like that and having. Having access. If you're a subcontractor, having access to not only the gc, but the owner to have those conversations of, you know, contingency plans relative to specified materials, things like that, and relative to labor. You know, if you can't staff a job, maybe not bid it. If, if you have the labor at the date and it evaporates by the time the project starts, then maybe plan B is subbing it out and you're obviously sacrificing margin. But at least, like I said, it'll keep you from. It'll avoid a large problem and maybe keep it a small problem. 

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Speaker 1

29:45

Yeah, I think that's a great point. So it's all about making sure that you have given consideration to what would be necessary if I still had to perform, how would I work through these things? What are alternate materials? What are alternate labor sources, what are alternate vendors? You know, all those types of solutions, and you still might struggle. But from an underwriting standpoint, that's what they. That's what they're looking. 

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Speaker 2

30:18

Yeah. And just go into a job, eyes wide open, and if. If you're concerned about something where you don't have, you know, you're not satisfied with your, you know, plan C, then, you know, talk to your attorney and see if you can have an outlet in that, you know, just contractually and, you know, have an outlet in that regard. 

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Speaker 1

30:37

Yeah, great point. All right, cool. Stacy, I think we might have time for one more. 

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Speaker 3

30:42

Okay. So, Eric TV said, we understand the most important things to a charity is equity, history, consistency, stability, routine process, procedure, and what are the three most detrimental attributes in the eyes of a surety? 

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Speaker 1

31:03

If you had to pick three Most detrimental attributes. 

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Speaker 2

31:06

Ooh, I like that. Yeah. I would say it depends on where the questioner is coming from. But from my seat, if somebody calls me and says they need a bond and we start talking through that process, if in that process I mentioned the character, the first seat that I mentioned in that first conversation, I might ask how their personal credit report looks. That answer is very telling. And the statistics behind somebody who's had a bankruptcy, for instance, it doesn't bode well for round two of starting a business. So I would say, you know, character and more narrowly defined personal credit is a huge item. I would say any. It depends on the contractor. But I would say as. As the underwriting process unfolds, look for systemic items that might cause either project losses or overall operating losses. 

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Speaker 2

32:12

So it might be as simple as, you know, we've had subcontractor failures on three projects and that, you know, tanked our year. Well, what are we doing about that process? Are we increasing your pre qualification? You know, it's always, it's the whole name of the game is identify systemic risks and understand why you aren't profitable if you aren't. So I wouldn't necessarily narrow it down to three specific items, but the bottom line is anything that prohibits you from being profitable is probably, you know, name those as 1, 2, and 3. And that depends on the scope of work and the trade. 

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Speaker 1

32:46

I like that. I like the overriding first bullet of like, do you pay your bills? 

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Speaker 2

32:51

Yes, exactly. You do what you say you're going to do. Good start. 

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Speaker 1

32:54

If you don't pay your bills as an individual, that might be a problem as a business and the systemic problems. And to me, that's really maybe how I would put a bow on the conversation or wrap up the conversation that we've talked through today is that you've got to identify those things in your business that are creating negative business outcomes, period. That's what you mean by systemic issues, right? 

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Speaker 2

33:28

Exactly. Yep, yep. 

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Speaker 1

33:29

And having identified those, be taking proactive steps to address those issues. And then you didn't say this, but I will do, do everyone a favor and don't just throw a body at it. Okay, so, so one of the biggest mistakes I see people make is, we're getting this problem. I need a VP of ops. We're getting this problem. I need a cfo. We're getting this problem and it's it. That may be true, but. But you also have to take personal responsibility for that. As a business owner, as an executive team, personal responsibility for how that thing is happening rather than just bringing somebody else in to deal with a broken situation. Because I cannot tell you how many people I see who are hired and who fail. Because the problem wasn't that they didn't have somebody in the role. 

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Speaker 1

34:22

The problem was that there are six other things that are contributing in that business to why that consistently happens. And that person hasn't been given control over changing those things. 

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Speaker 2

34:31

Right, Right. 

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Speaker 1

34:34

Anyway, we're up on time and we really like to finish on time. So, Josh, I really, again, Stacy and I appreciate you taking the time to join us today and to share your knowledge. I can honestly say that every time I speak with Josh, I get smarter. And I hope that you guys did today, too. I feel like, you know, I hope you feel like you learned something. So just a couple of quick things to wrap up. Number one, make sure that you. If you didn't catch this whole thing and you want to make sure that you get access to it. We are posting these on YouTube. Stacy and I are sending out a weekly email that has contact or. I'm sorry, that has the registration for the upcoming session and that has the link from the previous session. 

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Speaker 1

35:21

We're getting better at that part, so. So hang in there with us. But if you want to get an email distribution, shoot us a private chat and we'll get you added to our email distribution list. That's number one. We do this every Tuesday, though. In December, we're gonna take a little bit of time off. We do this every Tuesday and next week we will be running this on the 30th. And if I'm not mistaken, Stacy, is that you and I on the 30th. 

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Speaker 3

35:52

We need a guest to sub in for questions. 

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Speaker 1

35:56

Yeah. Stacy and I are going to be talking about marketing best practices for contractors, which I'm psyched about, and Stacy is a real pro on. So I look forward to having that discussion. And so, yeah, 8am Eastern next Thursday, next Tuesday, if you can't join, you can always catch the recording on LinkedIn or on YouTube. And if you want to make sure that you don't have to rely on LinkedIn to send you messages, send us your email address and we'll take care of that for you. Josh, any final word for the audience before we sign off? Anything you want to say? 

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Speaker 2

36:31

Thank you both for having me. Thanks for listening and happy Thanksgiving. Be safe. 

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Speaker 1

36:35

Thanks. You do the same. Stacey, anything you want to say to wrap us up? 

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Speaker 3

36:39

If we didn't get to your questions, feel free to reach out to Josh, and I'm sure he could help you with anything. And happy Thanksgiving, everybody. 

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Speaker 1

36:49

Thanks so much. Yeah. Happy Thanksgiving. See you, team. 

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Speaker 3

36:52

See ya. 

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Speaker 1

36:52

Bye.