“And it took out his marriage. It took out his business, it took out his reputation and he ended up moving out of town.”
Welcome to another episode of Builder Nuggets, the show where builders and remodelers discover how to build thriving businesses while working less. I'm Duane Johns and together with Dave Young, we share the elements of success that have helped hundreds of contractors like you build better lives. [00:23.4]
Duane: Upon graduating from Grove City College in Pennsylvania, with a degree in Industrial Management, today's guest began his construction career at NVR in Washington, DC. In 2005 he and his growing family relocated to Austin, Texas, and started Risinger Company. He is dedicated to building science and is recognized as an expert and thought leader in the industry.
Dave: As CEO and chief builder for Risinger Build in Austin, Texas our guest is also the host of The Build Show. He has become nationally recognized expert in building science and high-performance construction.
Through education and practice Matt is driven to elevate the standards of the building industry.
Duane: It's my pleasure to welcome Matt Risinger to today's show and Matt, between your custom home building company, The Build Show, you are definitely experiencing some, some success and some rewards for yourself.
Matt: Thank you. [01:14.4]
Duane: But based on a conversation you and I had several weeks ago, you know, when you go way back that wasn't always the case.
Matt: No, no, no, no. If you're in the building business for more than a year, you're going to experience, if you've got any success; you're also going to experience the opposite of that. This is a cyclical business. This is a difficult business, but there's plenty of days that you come home stressed. And you're wondering how you're going to make payroll tomorrow or pay that sub cause their clients holding out their money or because you have a spec house that can't sell, or you have an unhappy client for whatever reason. So anybody who's done this for any length of time knows this is an up and down business and that's not the gold mine that the rest of the world thinks that you're operating. [01:58.1]
Duane: Take a few minutes and tell us how you got started and what led you to where you are today.
Matt: Yeah. So the quick story is I got started right after college at the Big National Builder for many years. And then after I got married, I actually moved West coast for a while. And in 2001, I was working in Portland, Oregon for a small firm that was doing semi-custom homes, not that small, really like 150 houses a year, but the owner of the company when I was working for him and he was in his forties, very, very successful over 40 something year old builder. And if anyone's been in the building business since 2001, that was a big year for us as builders. That's when the national mold crisis hit and insurance companies were paying huge payouts to clients that have, or customers that had mold claims. And the company I was working for was getting sued by several people for mold claims. [02:52.1]
Duane: That was back in the days when insurance companies actually covered mold.
Matt: Exactly, exactly. It's excluded now, but it wasn't 2001. And then the other thing that was happening then in 2001 was we built several houses with EIFS, if you are familiar with that term, basically a synthetic stucco over foam on the outside, which is actually a terrific product, but it was being installed really badly in 2001. And so we built several houses that had plywood sheeting, and then over top of the plywood, we'd put EPS foam, Dunkin donuts, coffee, cup, style foam, and then we'd put a one coat latex stucco on top of that and then caulk meticulously around every opening. And it basically was a face sealed system that was designed for failure, the way we were installing it. We had no WRB we had no drainage point, we had no rain spray, none of that stuff. [03:45.7]
So here on the same, in the same year here, I was this 30 year old builder working for a medium sized family owned company, in my first week of working there, I think we got handed maybe three lawsuits and we're like buying back houses from people that we'd sold. And I was dealing with the guys in the Tyvek suits and then industrial hygienists and trying to figure out like, what the heck, what did we do wrong? How do we fix this? And some of our homeowners were expecting their children to go to the hospital with mold diseases and such; I mean it was just a crazy time. But in the end it was super valuable to me because when I started my company, I'd had a couple of years of really intense building science research and trying to figure out where the problems come from in houses and, you know, is this mold thing legitimate or are these people crazy? So long story short, I, I moved a couple years later after this really galvanizing experience, like a lot about building science and there was a new builder to a new town, I moved up to Austin, Texas, my wife's hometown, as we were kind of starting, our family had a pregnant wife and this is my wife's hometown. [05:01.4]
So I moved here. I start my home building company. I was very concerned about water and mold and all these things that I dealt with and kind of felt like, Oh, you know, I got this, I'm a really smart builder now. Well, until you start building modern houses, flat roofs, stucco, real stucco that I'd never dealt with before, I'd only use the synthetic stucco and I had some problems right away. And then the recession hit. And I also had a in 2007, I'd started a big $1.1 million spec in a okay neighborhood. And here the recession hit, I couldn’t sell that house to save my life. And I ended up selling it in 2010 after paying carrying costs for several years and I sold it for about 300,000 less than what I put into it. So when I closed on the deal, I was able to pay off my construction loan, but I had an investor there, I couldn't pay a penny back to they'd loan me 250 on the project because I actually bought two lots in town and was going to do two specs. [06:07.1]
And so from 2010, until 2015, I had this giant debt I was paying off as a company, but it made me kind of rethink my company and say, look, I'm not going to do spec houses, they're too risky. I did three specs and one I did okay. Another, I did sort of better. And then the third one, I lost my shirt on. But by this time I'd also gotten kind of a reputation for building well. And I realized through a business partner at the time, look, I should really focus on being an architect’s builder, where there's lots of good architects in this town of mine, Austin, Texas. They get lots of clients that comes straight to them wanting a house by this architect to design. And that architects looking for builders who are going to be a partner and not X them out of the deal or treat them like a stepchild. [06:57.2]
And so we just kind of catered our business towards architects. We said, look, we'll help give you a free ballpark on what we think the house is going to cost at the schematic phase. And then when we get under construction, we're going to make sure that we consult you and we encourage our clients to pay their construction administration fees to you so that we could have bi-weekly site meetings. And then we'd take your input. And if you want to make a change, we're not going to charge change order fee. We only charge the cost of the change. And so we kind of developed this very architect friendly reputation as a young company. And it also helps me get real involved with the local AIA chapter and got several houses on the homes tour, sort of lots of other architects that are then walking through our work and saying, Oh gosh, the craftsmanship really good here. This is really tight drywall, paint, the trim, the details, you know, they're all looking really nice. [07:51.0]
So then they would refer us to their prospects or their clients when they add a new, new client. And so I kind of organically grew the business. And through that same period of time, I was figuring out like, how do I market myself? I'm new to business. I'm new to Austin, Texas too. It's not like I worked for another builder in Austin. I had this deep base of, of of friendships or, or people that can refer me business. And I heard this I went to the Custom Builders Symposium in 2007, I don't think they do that anymore, but at the time I was in California and I saw this speaker on marketing, this guy, David Meerman Scott, and he wrote a book called, ‘The New Rules of Marketing and PR.’ And his whole premise to this big builder crowd was you should market yourself and you should do it for free. And I heard him speak for an hour and I took notes like furiously. It was an amazing concept. I never thought of before. Like, we don't need to use traditional marketing. We can do it ourselves. And it's free. It's just all online. [08:54.0]
And at time, his big premise was you shouldn't start a blog. So I started writing a blog and I was seven. About a year later, someone said, Hey, you should check out this thing called YouTube man. Here's my flip video camera. You can borrow it. It takes videos. And then you just pop it into your computer and upload it to YouTube. So I thought, well, this is great. I can any topic that I'm passionate about, I can talk about it easily, but I have a hard time writing an article. So then I started on YouTube in a way. And very quickly realized, Oh, video is a great medium because people develop a lot of trust and they feel like they know you quickly on video. So 2008, 2009, 2010, I would just publish maybe one or two videos a month. Very, very quickly. I realized this is a great way to connect with people because I would go into our prospect meeting and the homeowner that was getting referred to my company from the architect would Google up Risinger Build, they Google up my name or the company name, then try and find that everything that good about us, just on their research phase, they’d stumble upon my videos. [10:01.7]
And I'd have a video about double blaze versus triple blaze. Or how do you read the sticker on a window? Or what do I think about Marvin versus Marvin integrity? And, you know, my videos were getting like 50 views or 75 views at the time. So, you know, not much traction at all, certainly not by anyone's standards. And all of a sudden I'd come into a meeting and people would act like that was their long lost brother. They had like, Oh my gosh, man, it's so great to meet you. I watched 10 of your videos last night and I'd love the way you, you helped me to understand the difference between the basic and the more expensive windows. And I liked that molding detail you did that, you know, eliminated the shoe molding on that other video. I'd be like, Oh my gosh, like you watched 10 of my videos last night. [10:49.5]
And they automatically liked me. I kind of got rid of that, that initial time of does this person have integrity? Is this contractor shady, all those kinds of things. And so it just gave me enough feedback to go, this is worthwhile. I should keep doing this. And so I just bumped along doing that on a semi random basis, you know one or two videos a month. And I would just post them on my blog. And it's only been really in the last four years or so that I've gotten some traction. And a lot of that comes from kind of upping my game to have better quality videos, but also publishing on a regular basis. [11:30.1]
Duane: You created some status for yourself.
Matt: Yeah, it's crazy. You know, it's turned into a whole, another business for me and my personal brand has gone way up besides just my business brand. But anytime I'm talking to builders, which I'm assuming all of our audience here is on the podcast I always try to say, look, my YouTube, my social media, that I was doing in 2007, 8, 9, and 10, when I'm getting like 50 views, 30 views was absolutely as helpful to my brand as a business, as a builder business, as it is today, when a video, you know, I'm upset when a video only gets 50,000 views today and it feels like, Oh, that video is stung. You know, I didn't get any traction on that video. But if you're watching this, you got to set your ego aside because your Instagram game, your Facebook page, whatever you're posting is social media, it's going to get watched by people that are your potential customers and they're making a purchase decision. They're making a decision about your integrity, about you as a builder, whether they want to do business with you based on what you've put online. [12:38.6]
If you don't have anything online Oh boy. If your competitor does, they've got a huge leg up on you coming into that first interview. Now maybe you can overcome that later with your reputation or your 30 years in business or your referrals or whatever. But if it's me against one of my competitors and they're researching me the week prior to my interview, I got a huge leg up because they can see everything about me and my company and make a decision that they like me before I get there. That was a really long story, wasn’t it? [13:07.8]
Duane: Yeah.
Matt: Sorry.
Dave: It's a great story. And when I think about some parallels between what you're doing with your community, which is the, you know, the science of building.
Matt: Hmm…hmm.
Dave: And what Duane and I are doing here with this show where it's the science of building a better business, a more valuable business that runs better with less of your time and how do we help people do that? There's parallels there. And I can't, you know, we're going to talk about risk and reward, but I can't help thinking about the parallel also between what started you on this path was asking, where did these problems come from in a house?
Matt: Hmm…hmm.
Dave: And you got to the point where, Hey, I think the word you used was my work is tight. When we look through these challenges or the issues with businesses, we're looking at where do problems I come from in construction businesses. And how do you get your business? I'd love to hear some of the things, some of the risks you see in the business. [14:15.6]
Matt: Yeah.
Dave: And we'll talk about rewards in a little bit, but we'd love to hear, you're doing some things really well from, from the social media side. We'd love to hear about some of the challenges that you faced risks you mentioned. For example, you know, the fact that you led with, something that didn't work out for you. what can you share with us on any lessons you've learned around building business. [14:35.8]
Matt: Just to go back to kind of wrap that spec story in a bow. I was new to town. I felt like specs are the way to go, to kind of build my reputation. And they were, the problem was the market changed when I didn't anticipate that. And we all know that building a house takes more than a few weeks or a few months. So what do you do when the market changes? I mean, you could get caught absolutely with your pants down, especially if you have multiple specs. And in fact, in that same time period when I had a spec on the ground that I had a really hard time selling and making my interest only payments on, I had a builder friend, that guy that I really looked up to and I thought he was killing it in life and a business. He had a, like a condo spec project going and it took out his marriage, it took out his business. It took out his reputation. He ended up moving out of town. He left a bunch of subs that were mutual subs, high and dry. I'm really thankful that I didn't end up in that situation, which I could have easily then, but that situation I'm having a spec that I couldn't sell. And then having this 250k in debt in 2010, when I finally did sell it, that was a big galvanizing time in my life. And as a builder saying, look, I really want to shed risk as much as possible. And I'm okay making a little less money and kind of having a less flashy lifestyle so that I don't end up in the situation where you know, this happens again in 10 years and maybe I've got, well now I've got four kids at the time. I had one or two kids. That's not something I want to put my family through. [16:11.8]
And so I focused on architect only business. I also focus, which means that my jobs were cost plus and my contracts have gotten a lot better over the years. I also focused on the business of building and made sure that my back office is really tight. We made a bunch of changes to the way we did accounting, the way we did project management, but we also made a plan to pay off that debt, it took me 5 years, but we, we called that debt Chuck, our employee that we couldn't fire. And Chuck's salary was like $6,500 a month. It was more than I was making out of the business. And I couldn't wait to fire Chuck. He was a lazy employee that sucked our company's resources. I finally, we had a party at the office when we fired Chuck. I made my last payment in 2015. And at that time, then we were totally debt free and really in every other way as well. And I also got really serious about my personal budget. I started using software called YNAB, Y N A B, which is an amazing personal budget software that helps you when you even have $30 in the bank account and you need to make a budget. And that was pretty much my situation. [17:20.1]
2010, I had 250,000 of company that I also had about 50,000 in credit card debt. And I had, I think, two car payments as well at the time. And I was like, this is, what am I doing? I mean, I felt like I was up to my eyeballs. I will tell you that it makes your faith grow a lot though. And a lot of what I do today is in kind of response to those really hard times and making sure that I don't take on company debt, that don't buy cars, unless we can afford them. All those kinds of things, I've kind of taken that forward on my business as well. And on the contract side, I think we may have talked about this ahead of time, Duane, but you know, one thing that I've been really thankful for, I have a couple of guys in my business that helped me manage my company. I really don't manage the day to day construction or back-office anymore. And one of the guys that I brought on was an older man who had worked in another industry actually. And he really helped me get my back-office processes, my accounting very, very tight. And he also helped me really tighten down my contracts and think about them in a different way. [18:30.8]
Basically at this point in our career, in our lives, we really use our contracts as a way to weed out good clients versus bad, very early in the game. And so we don't really do anything without a professional services agreement and a deposit. Pretty early on in that engagement where a client's already paid us a deposit, we're having them review our contracts, so that we're saying, look, this is our contract review this if you're going to be returning it, then great, but let's make sure we talk about this now so that we don't spend nine months working together and all of a sudden you feel like you can't sign this contract, or you want to negotiate on things. And we kind of use it a little bit of a litmus test for clients so that we know whether they're going to be good to work for, or get to work with as well. And I can think of in the last five years, at least five clients that I was excited about the project, cool project, interesting, whatever. And they washed out for whatever reason, they wouldn't sign our contract. They wanted their lawyer wanted this, this, and this slashed and burned. And we said, no, we're just, we're not willing to do that. Well, at least three or four of them, I can point back to hearing back that they fired their builder or that they sued somebody, that there was a massive issue with that job. [19:45.1]
And so it just reminds me that having a really good back office process and having a good contract that you feel good about is a great way to make sure that you're only doing work for people that are, are going to have integrity, they're going to pay your bills that are going to actually be good, the clients that value your time.
Dave: That's a really good point. Probably the two riskiest things in any business are the two things that can create most damage are a Chuck type employee.
Matt: Hmm…hmm.
Dave: And a client. I think a lot of builders will look at a project and say, is there any, what's the risk in taking on this project when maybe it should be more focused on what's the risk on in taking on this particular client and you're using your contract as a telltale sign. What are some of the other telltale signs that a client isn't right for you? [20:33.2]
Matt: Deposit is another big one too. We always make sure that we're never going to work cost plus, and we want to make sure that no matter what stage of construction we're on, we're not behind on the client. So we're asking for pretty decent size of deposits cause we need at least six weeks, if not eight weeks for the working capital, cause you might do four weeks but we only bill once a month. So if I'm going to be already five, six weeks behind on from the point of an invoice coming in to a point where I'm paying a contractor and then getting paid, I need that client to be able to give me a sizeable enough deposit, that is their capital building the house and not mine. We're also are opening separate bank accounts for our jobs these days and managing that through both QuickBooks and Buildertrend so that they have access to exactly what their funds are and where they're happening. They know how we get paid, we're very kind of an open kimono on costs. And then also they know exactly what's been, and hasn't been paid as well as lien waivers for every check that goes out our door. [21:37.3]
A quick reminder that the best way to get the most out of this podcast is to engage with the Builder Nuggets community, visit our website at BuilderNuggets.com and follow along on Facebook and Instagram. [21:51.3]
Dave: That's some good stuff. We train something very similar. We build our client's houses with our client's money, not our money. It's just our simple way of saying that. Those can be tough conversations to have, but I think you've just sort of laid out a lot of the reasons why you need the money up front. And then if you have the buy-in probably early on establishing trust with the client, I think that's something that you've done very well through your personal brand. You’ve pre-built the trust by having buildertrend in the background, QuickBooks, the ability to show everything in a transparent way, separate bank accounts, you're building a safety net for the client in advance, where they have visibility into where our money is going and how the funds are going to flow. What kind of pushback do you get from that, that flags that, Hey, this person is not into this at all? [22:44.5]
Matt: Yeah. I mean, there's certainly the clients out there that want the fixed price and want the certainty of costs. I have a competitor of mine who’s a really good friend here in town. I won't mention his name, so we're not talking about people, but he, he's a friend, they're a partnership and their big shtick is look we're fixed price, and we're not going to start your house until every decision has been made, you know, exactly what you're going to get and exactly what the cost is going to be. And they do really well with that. I see a lot of people that react to that. We're not we're cost plus, and we're very transparent and we probably charge a smaller fee than that other builder, but we're also really, really transparent with what things cost. And we care as much about what's behind the walls as, as what the finish looks like, and that's kind of our reputation. And so we try to get into that as early as possible on the job. [23:38.7]
Dave: We joke around sometimes fixed price, subject to change.
Matt: It’s like that
Dave: Yeah. Duane, do you had some stuff you wanted to dig into?
Duane: You had mentioned the professional services agreement, which we're going to push folks towards some form of that pre-construction engagement. You're engaging with clients very early on creating that collaboration, the environment, whether you're a design build firm or like you are really it's that team atmosphere from the get-go.
Matt: Hmm.
Duane: Setting the expectations getting paid for it is a nice option to.
Matt: Yeah.
Duane: You know, to work through some of those details in the beginning. What kind of things do you do you look at in the very early stages for assessing risk? I mean, what are the things that are like, man, we've got to nail these things down before we really go any further. [24:27.7]
Matt: The first thing that we do is we give a series of estimates that we kind of use as the 50,000 foot airplane view estimate. And then we're tightening that again, before we get into design development, which is an architect's term for taking out a plan from a schematic design, which is usually a floor plan and the elevation into a more developed plan that we can actually get takeoffs and bids on. And then when we get the design development, we're then taking it out to bid. Typically we're taking it to our estimating software to get full takeoffs on as much as possible, so we can use historical data to say, you know, this is how many linear feet or square feet of cabinet you have, and here's the pricing for kind of good, better, best on cabinets. So now, instead of telling you, we think this house is going to be between one, three and one six, now we can say, okay, with these different assumptions, your house could cost one, four, one, five, or one six, depending on how we play with these variables. So that when we finally do get that construction document and we actually get bids to fill in to backs along that we don't have a client who is 50% off from their expectations on budget. And that's the worst scenario out there. [25:44.9]
Dave: At what point are you starting to bill for your time through that? Like, cause we transitioned there from what you're doing and willing to do at no charge to, for the introduction, to get some time with the client and understand if you want to work with them and assess that. And then you are making and Duane and I talk about this a lot, you're making a mutual commitment here. You're going to commit some more time to them to get to know them better and learn about the project. And then they're in turn going to commit to you financially. And at what point do you start billing? [26:14.3]
Matt: Usually the first two meetings are free days. So the first meetings, the main grades, the interview, what are you doing? You know, do we like each other? Maybe they want to come see a project or two. And that's usually not a super long meeting, one to two hours, let's say. And then we say, alright, do we, are we interested in potentially dating? So now let's provide you a ballpark estimate. That's the 50,000 foot view. Usually they have a schematic design at that point. And that's when we say alright guys based on our historic data, we think you're almost range. This house is a 2 to $2.5 million house based on lots of assumptions and here's the breakdown and we usually get more square footage breakdown on that, both interior and exterior tool landscape, all that kind of stuff. So they can really kind of see where the numbers come from, but it's very high level. [27:05.8]
It's just a range. And it's strictly to see really how do they react to that? Oh my gosh, 2 million, you know, our budget's a million or whatever. And we'll also try and assess some of that budget stuff at the very first meeting. But usually at that point, we're saying, Hey, we would love to be a part of this project. I think we're a good fit. Here's our two page professional services agreement, write us a deposit check for $15,000 and then we're going to help you through this process and we'd love to work with you. We wait for them to sign it and give us a check and then we're billing basically hourly towards that $15,000 deposit, whether it's, there's basically three people's hourly rates on there. My rights actually free because I'm not usually involved at ton during that time. I'm usually the either the closer or I'm the baby kisser or the hand shaker or the tour guide, that sort of thing. [28:01.4]
But I don't want people to have the impression that I'm their daily builder. This is my team, my HVAC guy's been with me for 15 years, my electrician's been with me for 10 years. Several of my people have been with me for 10 plus years, but I'm not your builder and I'm not, I'm not out there every day. Your builder is Tim and Hugo and Luke and Amy, that's your actual builder. And so you need to get to know them. So I don't want to give some false impression at the beginning, but on the other hand, this is my company, my name's on the door and everything that we do meets my expectations. And most everybody who's on the job site or people that were there with me when it was just me out there at the field, verifying the tile layout or meeting the inspector or whatever it is. [28:47.5]
Dave: One of the things you mentioned there, you touched on already brought up is the value of time and how you are billing for your time, right from that planning and design phase. This is one of the biggest risks that we see with construction companies is not keeping track of time or not billing for time and having just a buffet or an all you can eat model that inevitably somebody is a loser in that scenario. And we always recommend exactly what you're dealing.
Duane: You’ve positioned yourself, obviously, with the things that you've done, social media presence to build some status. It's allowed you to select the types of projects, types of people you want to work with. You've done these things to tighten up, you know reduce risks. What has that meant on the reward side? What have you seen, you know, maybe compared to the past building lives, what are the rewards of really looking at this in a, in a low risk environment? [29:44.6]
Matt: Yeah, I mean, for me, the biggest thing is it's meant that I haven't lost money or had big downs anymore since 2010, I do get paid well, and I'm very thankful for, for my income. But one of the things that I've also decided is I've got a fair amount of chiefs at my company, which means that I really hardly have a role anymore in my day to day operation on my home building company. I spend more of my time on my video production company. And because of that, I have some great people that I've, that I pay pretty well, but it means that I make a little less from the home building company and I'm okay with that because I've always wanted to own my own business and not own my own job. And now I'm at the point in life where I own two businesses and they're friendly businesses that everyone feels like they're part of the team, but they're also two separate entities. [30:36.0]
And at some point in life, I need to figure out whether I'd sell one or both of those or whether my kids would come into one or both of those companies. So I turned 48 tomorrow. We'll see where that happens, but I need to make some of those decisions pretty soon because I don't have any, at this point, I don't have any partners in either one of the businesses. So I have some decisions to make as a business owner and like all custom builders do as they get to my point in life for, they're like, gosh, I'm not that far from retirement. Not that I want to retire early. I doubt I'm the opposite. I probably want to retire later, never, but I do need to figure out what I'm gonna do with, with my businesses. [31:15.9]
Duane: Oh you'll have to check out our exit strategy episode.
Dave: Yes.
Matt: Oh that will be a good one. I knew that.
Dave: It sounds like the reward is three things. It's predictability freedom and having options.
Matt: Yeah, for sure.
Dave: Duane touched on exit strategy, one of the, and you touched on one of the keys of that is having some chiefs in place. These are people that you are kind of empowered are on the same mission with you understand where you're taking the company and it's allowed you to step out when we look at what a valuable business is, it's one that can run without you. You’ve clearly created that and that is a rewarding experience that is worth, you know, financially valuable as well, not just the freedom and the options and the predictability and and the status and stability that come with all of those things. It's pretty exciting to see where you've come from and where you've gotten to. What kind of opportunity does this create for the, for the chiefs on your team? [32:16.5]
Matt: I mean, huge. I’ve got at least one or two that I'm thinking maybe partners in the business. And we're starting to have those conversations with them, where they, I mean, they pretty much could either be closer to 50 50, or actually buy me out of the business in time. So that's one of my possible exit strategies. The other part of it is I've got some chiefs at least one of them, that's a former builder owned his own company for many, many years. And actually I love people that have owned their own business, whether building or not to work for me because they get the grind of there's no paycheck without the income. It needs to happen every day that we work towards both client satisfaction and getting paid on jobs. And part of getting paid as a cost-plus builder is making sure work happens too cause there's no plus if there's no costs. So, you know, we're looking at trying to get between 200 and 250,000 dollars of work out of every job every month. And thus a metric that we use in our company a lot. We talk about a lot. Why are you billing slower this month? What are we going to do about that? How do we keep the job moving forward? What's preventing you from getting to that velocity that we need to maintain income for our business. [33:34.1]
Duane: That's good stuff, really good stuff.
Dave: This is resonating with Dwayne and I, because this is where we're the builders we're working with, these are the things that we're putting in their businesses with them all the time, almost word for word. We didn't talk too much about reputation risk, but I think you've got that covered already. The fact that you've got so much Goodwill in the bank, you can withstand barring a nuclear warhead hits to your reputation. You've got so much credibility in the bank that you've worked on for a long time that insulates you from that risk to a great degree. [34:14.6]
Matt: That's huge and that's helpful. And you know, this is not a business that anybody is perfect in, and every builder has had mistakes and every builder sometimes gets the client that's the one that's the crazy one, or, or not even crazy, but it's just really hard to work with or whatever. And so I'm really fortunate to have that bank of reputation so that as I've made mistakes or made problems or whatever, then it hasn't hurt me in the kind of small town that I operate in. Cause Austin is as big as it is you know, we've got a million, I don't know the word now a million, four or something in Austin, still an incredibly small town and among my group of builders, trades, men, architects, crazy small town. [35:03.2]
Duane: Yeah even smaller.
Matt: Even smaller. I mean the electrician who does my work also does my competitor. And so if something's happening in my company, I guarantee you, my competitor knows about it.
Dave: The megaphone, the megaphone for good or bad is louder.
Matt: It travels very, very quickly.
Dave: Yeah.
Matt: There's not a lot of hidden in this town, both good and bad. But I'll tell you what this market in particular in Texas has been a really friendly one to me, you know, as an outsider I moved into Texas. I'm a Yankee, you know, I grew up in Pennsylvania, built in DC and then built in Portland and moved here cold. Man. I got to say a group of builders that at the time was about 20 years older than me, they were in their fifties and I was in my thirties, was so welcoming and kind to me and shared subcontractors and I called them with 911 calls. And what do I do about this? And what construction attorney should I use for this? And, you know, those kinds of things, a lot of what I do is a little bit of paying that back and paying it forward. And this has been a really, really good town about a competitor calling another competitor and going, Hey, what do I do about this? Or what have you done in this situation? I've got this and this happening. [36:18.5]
And I don't see, and maybe I'm maybe I'm naive, but I don't see a lot of bad talk about competitors happening to prospects. I get the sense that that's also helps that we're busy, but I, I have the sense that when I'm talking to a client that I know is talking to two or three of my competitors, they're not saying that Risinger is an idiot, they're saying, Hey, that Risinger is a good builder too, but I'm different and here's why. And here's why I think that's an advantage. And I know I'm saying that too and that's pretty cool. I know, I don't know that every town in America is like that. And so my hope is that we will just like you guys are doing on your podcast will be a little bit more collegial, willing to share. And I'm always taking the philosophy that a rising tide floats all boats. So if I can share some methods or some things that will keep you out of hot water, that's good for me too. I hate hearing the story of the builder who did a terrible job or whatever issues at your house under construction. So if we can prevent that all together and just talk about price and details and whatever, I'd rather compete on that any day and not have to hear the horror stories. [37:29.0]
Dave: Those are the conversations that you want to be having with clients, so that it's about them and it's about you and getting to know the really important things and getting away from the commoditization.
Matt: It's interesting.
Dave: Cause we had a great call conversation with Nick Schiffer about the noble builder and the way you guys are conducting yourselves in the Austin market that brings the nobility back to it, which is oftentimes lost. So it's pretty cool to hear that reinforced in such close proximity to those conversations that it is working in your market. And that's what we all need to elevate to do. So your right a rising tide, floats all boats. Let's lift up the industry and, and that's only a benefit for everyone. [38:16.2]
Matt: 100%!
Duane: Absolutely. Yep.
Matt: I totally agree.
Duane: Well, as we're wrapping things up here, I did just a couple of quick things. I jotted down. Let me right off the bat, we started with speculation equals risk. No doubt about it.
Matt: Hmm.
Duane: Death is like an anchor.
Matt: Yes.
Duane: Dragging you down.
Matt: Yes.
Dave: You got a Chuck, Chuck.
Duane: You got a Chuck, Chuck.
Dave: Yeah.
Duane: You do not need to spend a ton on advertising, you have proved that.
Matt: Hmm.
Duane: No doubt the status. I love the fact you've built status, that's allowed you to become very selective. Selective with your clients, selective with the designers, architects that you work with. Building with the client's money, not yours, there's a novel idea.
Matt: Hmm…hmm.
Duane: Owning the business, not owning a job and then the big reward. You know I think you you've proven it, that you and those around you are, you've got time to do the things you love.
Matt: Yeah, for sure.
Dave: Don’t leave.
Matt: That’s for sure.
Dave: Don't leave the contract out of that either Duane, because the having, you know, the contractual pieces, it's not the fun part of it, but it's huge in that as well. [39:18.4]
Matt: Yeah and as a little side piece of advice, I would say I got involved or I've found a great construction attorney. I don't know, 12, 13 years ago now. He is kind of a board member. We consider him kind of a board member for us. We consult him on a regular basis even early on with contracts or with whatever. And we talked to him on a regular basis, not necessarily that we're getting ready to sue somebody or vice versa, but just he's got great insights. He understands and reads people. And so that, I dunno what we ended up spending on him a month, not that much, couple thousand bucks, that couple of thousand we spent on him a month is invaluable to have that part-time employee basically, who really cares about my business and understands us and has such a long history with us. If you don't have a construction attorney, I highly recommend that you get a good relationship with one that you can call and ask questions and even talk about things like, Hey, we're not getting paid on this contract request. We had this one that happened last month.
You know, we're past our contractual five days. We're not used to not getting paid within five days. What do I do? Or I had this email exchange with a client. What's my next move here? What do I do about this? What do you suggest? And man, he's phenomenal, just a really, really solid guy. [40:37.5]
Duane: That's a huge nugget right there. And we find the similar thing here. I mean, having a proactive conversation with the attorney, it's a way better conversation than waiting until you have to have a conversation with the attorney.
Matt: 100%
Dave: Hey Matt, one of the things that's coming through loud and clear is the level of collaboration you have not just with other builders, which is huge, but also with these other professionals, architects, architects have been rocket fuel to your career. A good lawyer is protecting you. You're collaborating, you're taking a collaborative approach with your trades and your trade partners and that whole collaboration and bringing that all together is pointing this to another risk that we haven't talked about. And that is the risk of trying to do everything yourself and internalizing everything.
Matt: Hmm…hmm.
Dave: In our industry. I think sometimes our biggest risks can be us.
Matt: Yes.
Dave: If we try us bear too much of it ourselves and don't reach out, don't develop these relationships and sometimes ego can get in the way or preconception or those types of things. But I think you're a really good example of how to seek knowledge, seek cooperation by giving first and then it all comes back to you. It's its really working for you, it's it's totally clear. [42:01.0]
Matt: Thanks Dave.
Dave: But yeah. Yeah.
Duane: Well, one of the things we do here is we said, we're building a community here, it's all about sharing and connecting folks. So there's probably some listeners out there that might want to learn more about what you're doing and maybe connect with you. How can, how can folks find you?
Matt: Three ways, my network is buildshownetwork.com. There's six new videos a week on that website based on either designing or building a really well-built house, so check that out. And then my YouTube channel, which has really been my main source of social media over the years is just, just look up the Build Show on YouTube or Google Build Show and I'll come up. But it's actually youtube.com/MattRisinger and then probably the most intimate way to talk to me, that sounds weird. The most easiest way to get ahold of me is through my Instagram. I'm on it for at least 30 minutes, 45 minutes every day. I'm usually posting stories and pictures from my jobs. And I talk a lot to people on comments and DMS. Risingerbuild is our Instagram feed. [43:00.5]
Dave: You know, we had you on the show thinking about all the success you've had around building science, but you are a superstar in the science building a business. And the elements that you've been sharing with people today are going to create a lot of value for them. So sure, appreciate you spending time with all of us here today.
Matt: Definitely. Thanks for having me guys. I really appreciate it.
Duane: Yeah. Thanks Matt. Appreciate it and we will chat again soon.
Matt: All right guys. Have a great day. We'll talk to you all later. Thanks for listening everybody.
Duane: Hey man, oh yeah. Take care. [43:31.5]
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