EPISODE 100 – How the Government, Economy & Customers Contribute To Business Failure
EPISODE 100 – How the Government, Economy & Customers Contribute To Business Failure |
Hello, welcome to the, "Builders Business Success Podcast," episode 100, and we're going, what are we gonna do for episode 100? Something special. And we thought, and we thought, and we thought, and in the end really just came up with what is something that we can deliver in this podcast that would make the biggest difference. So that's what we're doing in episode 100.
And the title of this episode is how the government, the economy and your customers contribute to business failure. How good is that for a title and something to talk about in episode 100?
If this is your first time I'm, Mick Hawes and I'll be your host for the, "Builders Business Success Podcast." The podcast is a construction business podcast or a podcast for builders.
And I am, if you choose to let me, I can be your construction business coach or your builders coach, however you like to term it.
And the other thing that we've got on this episode is our now resident marketing expert online tradie specific marketing expert, Steph Campanella.
She's going to be sharing with you, her thoughts on how the topic of this podcast impacts your marketing perspective as well. So it's gonna be a pretty fascinating, pretty valuable podcast.
The New Book!
Just like to remind you about, "The Successful Builders Toolkit," recently released book from us.
Have you got a copy of this book yet? And if not, why not?
How we wrote this book was through the podcast. We went, okay, what is everything from start to finish that we talk about and coach, and support our Business Blackbelt members on from the very start all the way through to the finish. And we talked about it on the podcast, it became a book.
So in this book, it's got everything from the stuff that you need to know about marketing all the way through to sales, we don't call it marketing and sales, and you'll find out why. And it's really important in the book, how you can make your build process more effective and efficient, therefore more profitable.
And it also talks about the profit first Mike Michalowicz he was on the intro of the podcast, how that works in a building business, how you can scale it, and many builders shy away from scaling because they've grown and it got worse, not better. And so they go back to a smaller version to try and keep things under control.
But that's not true scaling, so you'll understand what true scaling is here. And true scaling gives you more money and more time and more meaning.
So grab yourself a copy of the book, how you can do it is there is a QR code on the screen right now. So if you're on a phone, you might wanna take a snapshot of it. But if you are watching live, there's also a link in the chat that you can use.
And if you're watching the replay, there'll be a link in the description where you can go grab yourself a copy of this book, and I encourage you to do so, because it's very, very good. Even if I do say so myself, and to understand, I'm not saying that I created all of that sort of stuff.
In fact, I probably haven't had an original idea as far as business success and mindset and success mindset and all of that sort of stuff. There are no new principles, they've been around for hundreds of years.
I just talk about them in perspective of, or from the perspective of a builder, even though I'm not a builder, but I work with builders and everything we do is focused in on builders. So jump in, grab a copy of your book.
Transcription of the show!
So the question or the topic of this podcast is how does the government, the customer and the economy contribute to business failure? And I thought it'd be appropriate seeing that, just, we're not even a week old into a brand new government.
So how does this affect your business? Here's the answer. So make sure you're sitting down, it doesn't, none of those things affect your business. Your customers don't affect your business.
The government doesn't affect your business. The economy doesn't affect your business. One of my mentors from way, way back in the very early 90s was Jim Rohn, he's no longer with us, but he would say the wind of circumstance blows on us all.
So all of the builders are dealing with the challenges in supply, the challenges in getting trades to stick with you, the challenges in the price rises at the moment, putting a quote together, and by the time you get to order the frames or whatever, they've gone up 10% or 30% or something crazy.
Every builder in Australia is dealing with this. An interesting bit of information was given to me the other day by Mr. Scott E. Carson, just a newspaper article which basically said, just in Victoria, 342 construction or building businesses have gone into insolvency since April last year, April 2021, and 40 have gone under just this March.
Why is that the case? Is it the economy? Is it the government? Is it the customer? It's none of those things, it's how we choose to run our business.
And as Jim Rohn says, the wind of circumstance blows on us all, everyone is running their business with all of these circumstances or the things that are happening around us. Few more people have joined us live, which is really cool.
Hey Shannon, hey, Paul, I think you must be a first time listener, viewer, I haven't seen your name there before. Love to hear a little bit about where you are and what your business is about. Toss that in the chat, if you'd like. Phil's just joined us, Matt's here, it's a cast of thousands.
So as I said, Jim says, the wind of circumstances blows on us all, but it's how you set the sale, it determines how far you get. And I really like that analogy because I'm a mad king sailor and been watching, SailGP.
If you haven't seen, SailGP you've gotta watch, SailGP it's these incredibly fast, 50 foot foiling catamarans that will sail four plus times the speed of the wind. And it's just, it's amazing. And again, an interesting analogy that I can draw with, with business. I was watching the season three.
So the first regatta, two days of the first regatta of SailGP, nine different countries being represented. Funnily enough, three of the countries are being skippered by Australians.
So Australians are very well represented as far as the school for sailing around the world. And Australia has won the first two seasons, the first two whole seasons. And they won the first regatta of season three as well.
But the interesting thing was that they just, they kept going and, so how the thing works is there are six races in a regatta three on the first day three on the second day, but the sixth race, the last race on the second day is only the top three races, so top three teams.
So you have to, in the first five races, you've gotta get yourself into the top three. So you can get into the final. But you could be third, and whoever wins the last race wins the regatta.
And it was just interesting that Australia were sort of around fourth, fifth, third, fourth, around that space for the whole regatta up until the second last race, where they won it, got into to the final and then won the final race, convincingly. Almost felt like that they were holding back through the regatta and not showing their cards.
But the interesting thing was that I took from that from a business perspective is that if you get down in the mouth because you don't win every day, it can really affect your performance.
And you listen to, to Tom Slingsby, he's the guy who helms the Australian boat, how he talks. And he, he never, ever focuses on what has happened as far as past results, except for what we can learn from it.
So he's always looking at what we can learn from it, and we can always improve from here. And all they do is focus on what can be improved and what they can learn to be able to compete better the next time.
And the title of this podcast is, how do all of these external circumstances such as the government or the customers or the economy cause business failure. And as I said at the start, the answer is they don't, they are, that's the wind, they're the circumstances, and everybody is sailing in those same circumstances.
It might be a little bit more over here, a little less over here, a little more problem over here, a little less problem over there. But it's not an even playing field, I get that, but everybody has opportunities and problems, and it's really how you deal with it. What is your approach to how you deal with it?
The other thing that was really interesting from this, SailGP thing as well, is that all of the nine teams send their data back to a central place.
So it's kind of like, of being involved in supercars a while ago, and I was just blown away by the telemetry, all of the information about where the steering wheel was at any point in the course, and how much gas, how much brake pressure, what the g-forces were, blah, blah, blah, just incredible.
SailGP is like that on steroids. But the thing is that all of the teams get to see all of the other team's information. And what I love about that is it's like blueprint and it's like Blackbelt, all of the builders in those groups support each other, share with each other their philosophy, share what is working.
And the amazing thing about that is that it makes everybody better. You might think, well, that's a disadvantage to Australia in the SailGP because, they're the best and everyone gets to see what they're doing.
But what happens is everyone else gets to see what they're doing and they get better, which causes Australia to get better. If they weren't being chased, right. And they were midfield for most of the regatta, if they weren't being chased, they wouldn't have anywhere near the impetus to improve.
And so we need to make sure that we are not, you'll never hear any of these top class sailors say, well, Jimmy Spithill was a bit lucky in that race because he got a wind shift, a favorable wind shift.
You'll never hear them say that because everyone gets wind shifts, it's how you deal with the wind shifts. It's how you prepare, it's the decisions you make, it's how you respond to what's going on consistently over time that gives you the winner's jacket. And it's exactly the same with business.
If we blame the government for our business success or failure, we have no control. If we blame the economy for our business success or failure, we have no control. If we blame our clients for things not going well, we have no control. And I've heard builders blame all three of those things.
Most particularly the client, I got a high maintenance client, it was a bad client, poor client, client does this, client does that. It's your business, you have the opportunity to find out what's not working and implement new systems and processes and refine your skills to get a different result in the future, that is your opportunity, just like Australia in the SailGP.
They look at how they went, what they could do better, and they put massive, and I mean massive effort into the improvement of their systems, the improvement of their processes, the improvement of their communication, and of course the improvement of their skills.
All of their focus is inward not outward blaming the government, the economy, the customer. So how does this work in a building business? So the examples that I've written down here to just quickly unpack, charging for quotes.
If you're looking out there and say, you can't charge for quotes because people are all, they don't wanna pay for things they can get for free. What's gonna change, nothing's going to change. So you have to change your mindset, you have to change the presentation, the approach that you take when you're talking to a prospect and you offer them a different way of looking at the start process of a building project.
They're just used to the start process of a building project, going around to three builders, getting three free quotes and choosing the one that is either the cheapest or the one they feel best about.
And off we go, and if you can show them how that is a fundamentally flawed process, how it wastes your time, how it wastes the builder's time, how it causes the builder to be less than effective on your project.
So that that process causes problems in the building project, if you can change the dialogue, change the script, change the narrative, the focus at the start of the project. They go, yeah, no worries.
Now Matt is on here live, and he just sent me through a message this morning, and yesterday about a couple of initial meetings. And in the initial meeting is where our Blackbelt Builders say, hey, there is a fee for the proposal. Here's why we have a fee. Here's why we don't do free and goes through the whole thing.
And I think Matt said it was up to number 15 in a row of people saying, absolutely yes, that sounds great, that's not a problem, this is the best way of doing it. That's the sort of feedback our Blackbelt members are getting, but you've gotta change your focus, you can't blame out there.
It's in here, it's your presentation, it's your focus. And it's your skills that will make this work or not. Paul says, hey, and he is new to the podcast. Glad to have you here, Paul. I hope you, this is the start of many podcasts you jump in live, great to have you here.
Another example of this mindset thing is how many times have you thought, or have you heard somebody say, we've got a cash flow problem? And if you listen to Mike Michalowicz, he's an expert on this, he says, that's all bullshit, you don't have a cash flow problem, you have a cash management problem.
Again, when people talk about cash flow, they are tending to say, it's this thing, it's this issue outside of me. But Mike turns that back and says, no, it's a cash management problem. It's how you management, money management.
It how you manage it. It's the decisions that you make to buy this or not buy this or pay this or not pay that, it's completely up to you, it's not outside of you. And if you're uncomfortable with what I'm saying, I'm not even gonna apologize for it.
There's nothing I can do about it, this is my reality. And the reality of people in Blueprint, and people in Blackbelt, when they start to take personal responsibility shit changes. People come into Blueprint and Blackbelt with big debts. And a year later, two years later, they have profits.
They have cash hundreds of thousands of dollars quite often in the profit account. It's not on a profit and loss sheet saying you've made this fictitious amount. It's actually cash that exists in a bank account that's not earmarked for anything else. Pretty good.
Another example is I need more turnover. So again, turnover is this thing out here, I need more work before I can become more profitable, total crap. You need to make better decisions and manage things better, as far as cash is concerned, as far as efficiency is concerned on site and your communication, your leadership, all of that will make a difference.
Increasing turnover, because you've probably already got a broken system, a broken model in the first place will just make it worse. I cannot tell you how many times I've had a conversation with a builder where they've said, yep, you're right. We doubled our turnover and we're making less money now than what we were a year ago and I'm working harder.
'Cause that's what happens when you double down on a flawed process, a flawed model. Contractors are hard to find, yeah I get that as well. But again, there are people that we speak to there are people in our group that have a group of contractors who are really loyal to them and they're not having those problems getting trades. There's not a quick fix to this.
This is a long game, but how you treat them, how you communicate with them, how you remunerate them, all of those things creates loyalty. There's all sorts of things that you can do to alleviate that. People want the cheapest price is another one. Again, not true, people default to the cheapest price when they have no sense that there is a difference between their two options in value.
So even if, I talk about this all the time, cart of oranges next to another cart of oranges in the supermarket, there's lots of experiments done like this, where they'll put a higher price on one than the other, but they're exactly the same oranges, no explanation or anything, just a higher price.
And the higher price ones always sell faster than the cheaper ones. And there is no difference in value, but there is a difference in the value of the purchaser. Most people just assume because it's more expensive, it's more valuable, so I'll go for it. Interesting.
So taking personal responsibility, and that's all I'm really talking about, taking personal responsibility for your business. Don't waste your energy blaming the government or the client or the economy or cash flow.
Don't waste, 'cause that's a waste of energy, nothing's gonna happen other than you'll feel bad. Start to use that energy on things that you can control, that you can influence such as your own skills, your communication skills, your businesses systems and processes, how you manage your cash, using the profit first system, all of those sorts of things.
Mick, that's me. Paul is asking a question, "Interested in your thoughts on "the model of doing a display home "as a sales office marketing tool "that gets sold front and rented back "for a couple of years." My thoughts on that are is if profit first says that's a good idea and you can afford it, it is a great idea, it's a great opportunity.
But if you can't do it through the profit first principles at this stage, wait until you've implemented the profit first principles and you have the financial wherewithal to be able to do something like that without massive risk, because of, it is a great idea, it's a great tool to have in your building business.
But I have seen plenty of builders get into trouble because it has sucked up a lot of cash a lot of time, and they didn't know how to use it as a sales office slash marketing tool effectively.
So they went to all of the expense and the time, but they didn't get the return on it that they could have got because they didn't have a proper process to use that display home effectively. And I think it's a great tool, but you've gotta make sure you do it the right way using profit first in the beginning to actually get it.
And then once you've got it, you've gotta make sure you've got a proper process. And we talk about this or have talked about it a lot in Blackbelt with our members. Not a lot of them have the display home, but a few of them have and using it effectively can make a massive difference.
It can save you a ton of money on marketing and get you really good quality leads. So it's a great idea, but you've gotta make sure that how you get it has to be within the profit first criteria, and then you need to learn how to use it properly, so I hope that helps, Paul. So as I was saying, taking personal responsibility is a skill.
So if you practice taking personal responsibility, it gets easier and the results follow. But if you practice giving away personal responsibility, the opposite happens.
You end up with more things pressing on you, you end up blaming more things, you end up being more stressed out, you end up feeling far more out of control, you let go of trying to even change things because you start to feel that it's helpless and it's downhill from there.
But I need you to know that this is entirely within your control and we are here to help you with it, and all you need to do is reach out. My email is [email protected] not too hard to remember.
It's a little difficult to type 'cause it's quite long. You can reach out to me in the chat, in the tool shed here more than happy to help.
And we can get into a conversation and find out about where you are, where you wanna go, what's in the way and based on what we've got available, anywhere from free to paid, we can guide you in the right direction.
A paid program might not be right for you right now. You might need to do something else to get you into that position. But the conversation is free and you will get very, very clear on the best way forward for you.
So reach out to us in the chat or [email protected], and we'll get into a conversation.
So at the start I mentioned Steph, Steph Campanella.
She's put together some thoughts about this question, about how government affects your business, the economy, the customer, all of that sort of stuff with a marketing bin.
So let's listen to what Steph said about that question.
Good day all, Steph here and I love Mick's topic today. How the government, economy and the customer contribute to business failure not. Now watching the past two years happen with the pandemic.
What I saw across the board is the customers they already knew who they were going for. They already knew what they were selling this customer. They already knew where this customer was living or was located.
So they knew the location of the customer they wanted to attract. And they had a process of how the customer interacts with this person or they knew the flow of how to actually drive the lead forward and make a sale.
My customers that already had that in place are the ones that just rocket shipped and even now they're just, their business has exploded. The customers that were still doing everything to everyone in every location and not sure of when a lead comes in, what's the process.
Those are the guys that needed more help and really grinded over the past time. So my message to you today from a marketing angle is you must have your ideal customer locked in and you must know your service, but I specifically like to brand your service.
I like to name your thing so that when someone is looking for a builder in Sydney, they're looking for someone who can transform their home by doing this. And there's actually a name for this.
If you're a renovation builder, and you're a bathroom builder and a kitchen builder, the customers that take action the quickest and spend the most are the ones that are, that know exactly what they want.
And when they connect with you, they want to know that you are the best at what you're doing. So again, when you do renovation Sydney and kitchen renovation Sydney, and bathroom renovation Sydney, it's very broad, it's hard for someone to connect with you.
So really zone in on the exact thing that you do, which then will help your marketing team, because from an SEO ad words perspective, I don't have to run ads on renovation Sydney, kitchen Sydney, bathroom Sydney.
I don't have to build landing pages for kitchen Sydney, bathroom Sydney, renovation Sydney. I can build one really good bathroom renovation landing page, or website page on your website. We can run a set campaign to that core thing and we can get leads on that core process.
Your sales process can get easier because you can ask better questions, like how long is your bathroom been like this for? How long has it been annoying you? Can you tell me about the type of shower you would like? Oh, you'd like to have a rainfall shower.
All these questions help insight some motion to the customer and they get to connect with you so much faster. So all these things could then, we could put those into your landing page for you.
So when that customer clicks three ads and they see the other guys and how the boring same old messages are there about bathroom renovations, quick and free quote and all this sort of stuff.
What they see is bathroom renovations, how old is your bathroom? We find the bathrooms that we are renovating are 10 to 20 years old, they've got really old toilets, the bath has that certain feel to it.
The taps are horrid and coming off, the shower water goes everywhere, the door barely works anymore. Those are all problems that your customer has. And if we articulate those problems and show them, we understand those problems, the customer will understand that we're the right bathroom renovation company for them.
So I can't stress this enough, doing the one thing or having an idea of exactly what type of customer you want is gonna help you when the economy is flat or inflation is rising and there's less leads in the market.
You need to be better, you need to be the best when there's less leads in the market. Right now, there's not, it's like fire. So yeah, I hope that that helped. Back to you Mick.
Thanks Steph, excellent advice. And again, the focus with what Steph said is coming back to you, for you taking personal responsibility, because I see it all of the time that the builders, and you need to do quality marketing, whether you've got lots of leads now or not, you need to have a marketing process.
And a quality marketing process will work when you've got someone like a Steph in your corner, but you don't say to her, can you take care of it all. She needs stuff that is already set up such as you need to know intimately who your ideal customer is, and what keeps them up at night, what are their fears, frustrations, wants and aspirations?
She can then build the tools for you to attract those people. And let me just say that when you learn how to attract the right type of people, it eliminates so many other problems throughout the rest of the process, the sales process, the build process, the handover, the afterwards, whether they're a champion of your cause or whether they hate you, all of that can start at the marketing end.
And so she said, the people who already know that and have a process are going gangbusters with what she does, but the people who haven't aren't, and there's nothing she can do about it. You've gotta take personal responsibility for the marketing of your business. So the theme today is personal responsibility for everything.
Now, if you dunno what to do, you reach out, that's why we exist. That's why we've got the builders tool shed. That's why we're gathering experts like Steph and Katie Katie Crismale-Marshall, who wrote, "Profit First for Tradies."
She's also gonna be a contributor to the podcast, but the nasty COVID got her and she's being out of action for the last couple of weeks, but I'm sure she'll be on the show next week, giving her insights as to profit first for a trade space business, which is just invaluable.
So the information is here, all you've gotta do is put your hand up, reach out to ask the questions and there will be help available, then it's up to you to implement that stuff. So it's all about personal responsibility.
I always like to say, please, I'd love you to help us help you. We wanna stay abreast of the current scenarios that you're dealing with because it is changing month by month in this current environment. And so we want to have conversations with you, we wanna understand what your current problems are.
So reach out to us through the chat, through [email protected], we want to talk to you and learn what your problems are, how you are perceiving your problems. And if we can help you point you in the right direction to overcome them all well and good.
But by having those conversations, we learn what resources we need to put into the tool shed, so it becomes the most amazing environment for builders and trades based businesses, that's what we're trying to do with this.
So, I hope you got some value out of this episode of "Builders Business Success Podcast." In the chat if you are live, there's a couple of links ones for the book, we've talked about that.
The other one is a link that you can share to invite other people, whether they're your trades people or other builders, other trades based businesses that would get value out of being in the tool shed.
You can send them that link and they can join the tool shed, it's free, they can jump in and start to listen to the podcast and ask questions and get all of the benefits from being a participant in the tool shed.
If you're watching the replay, that will be in the description as well, just copy it, text it out to your other tradie business friends or builders or whatever and get them into the tool shed.
So one of the things that we are wanting to do in the future is create environments where sub trades can start to talk to builders because there's a fair bit of us and them going on in that space causing problems. And we are working on coming up with solutions to that as well.
So we're doing a lot in the background to bring you really valuable environments, tools, tips, and techniques to improve your business. All you gotta do is ask the question, hang around, engage in the tool shed.
So that is it for this episode of the, "Builders Business Success Podcast." I'm Mick Hawes from Builders Business Blackbelt and bye for now.