“The business model had to be simple.”
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. [00:18.5]
Duane: Today, we're digging into a phenomenal story of how one builder’s desire to deliver an exceptional experience, transformed into a mission to create the most valuable, lowest risk, most rewarding custom home building business in the world.
Dave: Our expert was a small business operator, like most of you. He went through the same struggles we all do, but believed like so many of us that there had to be a better way. He challenged the status quo, invested in people, invested in systems and committed to processes. With over a hundred locations across North America, this entrepreneur's vision and action is now quietly changing the industry.
Duane: With us does today is the CEO and founder of Alair homes and friend Blair McDaniel.
Dave: Yeah, Dwayne and I have the good fortune of working with Blair as regional partners with the Alair. We get to collaborate with him and his leadership team on a regular basis and thought it would be fun to share his story and unique perspective with you today, so welcome Blair. [01:16.2]
Blair: Okay guys, thanks for having me. I'm excited to be here and hope that I can share something that's interesting.
Dave: Well, you definitely have something that's interesting Blair. Your, your story together with your wife, Alison is absolutely incredible. It starts out like a lot of other builders, you go from being a teenager in a rural community, cutting your teeth as a, as a framer to where you are today, the visionary behind a business model and network that is bringing real change to rapid change to a notoriously stubborn industry. Did you, did you see that coming when you packed up your pickup truck and in the mid in the mid 2000’s?
Blair: Uhh…No Dave, I think it's safe to call this an accidental, an accidental franchise system, which is really what we are today. No certainly, didn't see where we are today back in the early 2000’s anyways.
Dave: So, so take us back to the, to the beginning of, you know, the young Blair McDaniel, teenager, how the heck does all this happen Blair? [02:22.4]
Blair: Well like I said Dave, I was a framer in high school, so worked on a job site framing afterschool weekends and always actually really enjoyed that. And to this day, very much enjoy carpentry, both rough and finish, slowly starting to get into some finished carpentry. And so, when my wife and I were married we decided to just go on an adventure that was this, I would say that's probably the start of Alair. So, I grew up just outside of Toronto. And when we were first married decided that we would go as far as we could from family and just do our own thing. Go for a year, was our plan. So, we moved to the far literally as far as you can go West in Canada, and that was to Vancouver Island. [03:15.1]
When I, when we got to Vancouver Island, I just immediately started framing. And there was some phenomenal opportunity on Vancouver Island for commercial framing contracts, which we jumped into and just pursued that, that business fairly aggressively for about two years. So, we were doing commercial framing and concrete projects up and down Vancouver Island. And that, that business grew quickly. We had about 60 staff and as we sort of got deeper into that business, I, I began to realize probably most importantly, what I did not want to do for the rest of my life. And that was exist in a very aggressive, very litigious business environment, where there was a lot of opportunity.We were growing like crazy lots of headaches, of course that go with it, but it was pretty exciting, but it really wasn't fun. I couldn't say looking back at those years, I was, I was on the tools and I was running jobs and I was stressed out in my mind and, you know, just a very aggressive environment. And so we decided to my wife and I, Allison, we decided to make a change into getting into some custom home builds. [04:31.8]
So, the very first homes that we built were homes for my sister and brother-in-law who, who, my sister had also moved to the Island, a very close banker friend of mine, I think you would call them very close family and friends. And when we started to build those first homes, some, there was one thing that was very, very worrisome, I think you would say for me. And that was, I had in all of my experience in construction, I had seen the good and the bad and as much bad as good. It wasn't uncommon for a lot of these very, very large commercial projects to end in a litigious way and people fighting and scrapping over change orders and all of these things, just to just not a pleasant, the furthest thing from what I would describe as a, you know, a raving fan experience where people are thrilled and tripping through the daisies that wasn't happening. And so, it was very concerning to me that that would never ever happen. It just couldn't happen with family and friends. [05:32.0]
So, the way that we decided to approach this was really pretty simple. And it's the exact way that every one of our offices in North America operates today, which was a very firm commitment to invest the time upfront, really try to understand what is this client trying to achieve and, and structure our contracts and our agreements and our relationship in such a way that we really truly needed to be on the same side of the table as our client. And a lot of people will speak to that as a nice feel-good, but this was something that was very, very important to me. So, we've, we frame those for those first relationships that we were going to, you know, basically go through all of this together in a complete open book way. I would bring the Rolodex of the trades that I had had contact with, but we were going to look at every part of this bill together and decide together. What is the best approach for this category of that core category, whatnot? [06:33.8]
Duane: Was there some pushback from the traditional residential industry with that approach?
Blair: Oh, for sure. For sure I mean, there was Duane, I think there was, there was not a lot of pushback from the client because I think from a client's perspective, it's pretty logical, but from other, from the sub-trades, this was a new way to do things. They knew we were taking their numbers in full transparency, as well as of course, a lot of the other, other builders in the industry, you know, they approach it in a very, very different way. Right. So, but the results were pretty telling the first couple of projects went really, really well. I mean, these were some of the first homes. Well, certainly they were the first homes I had ever built and we finished them together with our clients and, you know, phenomenal homes happy clients. And so that was really the, how we started just on this, this concept of a very, very, a unified approach where we open book, we look at absolutely everything together. So that, that was would you like me to go on from there to how, you know, what kind of scale to where, where we are today? [07:39.7]
Dave: Well, I, I think it would be good to talk about risk a little bit right here right now, because some of the principles that you put in from and learned early on have survived through the transitions of the, of the, the growth of the business model and we didn't talk about the timing. So that was September of 2007, right at the time, so imagine you've just moved, you're newly married, you're out there, you're starting a brand, a brand-new construction company and the same week that you incorporated the U S economy cracks, that's gotta be a scary time. And I remember, you know, when, when I retell your story, sometimes Blair, I think about the anti-risk things that, that you were forced to put in right at that time. And what resonates with me is build your client's houses with your client's money. [08:36.2]
So, I think that became one of the foundations when I, when I think about your story, so you can tell that piece how you want. The need for extra communication, because these were your friends and family and supremely important relationships to you that you wanted to make sure that you could never, ever be in a situation where somebody questioned something and that's what led to the transparency. But all these things all at the same time led to you putting these super solid principles into place that have been sort of the core, the foundation of where everything else comes from, from that point forward. [09:14.7]
Blair: Yeah, really, really good points and you're right. We’ve survived, those concepts are very real today for all of us. Finance being probably the first one that you pointed out and probably one of the biggest, like, even if we, at that point, not only because we were a very, very young, we were a brand-new company, but also because we were within weeks of the subprime collapse in the U S I mean, the option of borrowing funds was just not an option. There was no, there was no for us to just have a very, very Frank conversation with our clients out of the gate, that we would not be funding projects. And at the end of the day, it's a very reasonable approach because if, if the client is, is ever going to take this home from you and be approved to pay for it, why not have that sorted out right away, upfront, right. There's no need and I hear it over and over again, and I completely refute it. There is just no need whatsoever for builders to take the absolutely unacceptable levels of risk that they, that they continue to take when it, when this is going to be in short order, transferred into somebody else's hands. [10:25.1]
So, I mean, that was just we were forced to do that. Looking back, we're so lucky that we could, but it also meant that we had to find committed paying clients for every single job before we start that job. So, speculation was off, off the table. It just, wasn't an option. And that's you know, that's a scary trap that we see a lot of builders get into as well, where it's the build that they will come model. And that can work very, very well. I mean, we certainly see that work very, very well until it doesn't.
Duane: Until it doesn’t, yeah.
Blair: And then it's a train into a brick wall. So, and, and, and it's, it forces you to grow much slower, but it forces you to grow much smarter and it forces you to choose your clients. And, and probably the most important thing is it forces you to focus on relationships, rather than focusing on the product, rather than focusing on, you know, the land options. It's, it's focusing on those relationships where you are going to work together to make this a success. And, you know, to take the liability of finance out of the question, and again, makes you grow slower, but it makes you grow way stronger. There's no question. [11:40.7]
Dave: So, your Alair custom home building office, small office takes off, and you're, you're a few years in, and you're doing 25 homes a year and you decide to expand.
Blair: Yeah. So.
Dave: How did that go?
Blair: Well, not great. I mean, you could always look back at anything and you could probably say, well, it could have gone worse, but it could have gone a lot better, there's no question. So, we decided we were in denial, our, our obvious I thought that I had it all figured out. We'd grown very, very quickly. The, the model was very well received. We were a young company, radically transparent, really investing the efforts to engage with our clients, probably had a very great different level than many of our other competitors. So, we were having success and we decided to, you know, grow to Victoria hour and a half away, hour away maybe. And it was, it was not fun. [12:46.3]
We, we went down there, we secured some excellent projects. We put some key staff in place and for the boat the next year, it just kind of bumbled along and it was painful. And I was spending tons of time driving back and forth from Victoria, just putting out fires and just not, I couldn't get, I just couldn't get it to take, like we were experiencing in Nanaimo. And so, I'll, I'll move from there to really, this was the starting of the franchise expansion. It sounds like, well, it wasn't working. So why on earth would you expand it? But it was working, it was working really well in Nanaimo. We had a solid little business there. So, while this Victoria office was getting up and running, I got approached by our who eventually became our first franchisee, Jamie. Thanks for Jamie and Monica Affleck in Edmonton, Alberta. [13:38.1]
And this was just a mutual introduction and Jamie, his, his original approach was of interest to, you know, partnering some sort of way. And I was just, I was at my wit's end at this point, dealing with these ongoing fires and dissatisfied clients in Victoria. It just, wasn't fun. Life wasn't fun and we've all been there. We know how that feels. So, my interest in partnering in Edmonton was not very high at all. I just, I didn't have the bandwidth for it. The more we talked about it, the original concept, what we landed on was I could see this young couple was, was tenacious. Like they were clearly going somewhere and clearly with, or without me.
And that was really exciting to see that, I mean, as any entrepreneur, you, you know what that feels like, like just that excitement that you, you're going somewhere, you maybe don't where, that something was about to happen. [14:36.8]
And I, you could just feel that with Jamie and Monica, right? And so, the original concept was really pretty simple from my perspective, it was don't go. And he was a startup. He came from construction, but he was, I would call it a startup. And the idea was, well, let's, let's just consolidate our back. And I had all the staff and all of the, a lot of the systems and structure in place rather than going, duplicate that and have a whole, the overhead associated with it. Why wouldn't we run everything out of the backend, out of one location, have those safety, people have half the people supporting two offices. And that was really where it started. And that worked I mean, we, we watched that first year. Jamie, Jamie came in and he just took off. I mean, he was, he was a force, no question. And for me, just a light bulb moment to watch what's happening in Edmonton with that’s totally driven, excited, young couple versus, you know, the other team that I had in Victoria, it just could not have been more different total light bulb moment for me to say, wow, if we're going to expand the business model, this is the way to do it is doing it with engaged, driven partners. And really so, so that was the start of our expansion. [15:54.6]
Duane: So, at that point, when you, when you did the expansion franchise really still wasn't on your mind, was it at that point?
Blair: Well, it initially, no, but, but shortly thereafter, because really the agreement that we landed on was I, I didn't want to have ownership in his office, I knew that. So, he owned a hundred percent of his business and I just, we agreed on a, a, a percent of his gross revenues as a royalty. So, I mean, any year, you're pretty quick to appreciate, Hey, this is very much like a licensing agreement or a franchise structure, right. To appreciate that it would turn into what it is today. No, no, no, no.
Dave: That's kind of what you were getting at, when you said it became a franchise by accident. You didn't set out to do, and it just, as you were looking to grow, it just happened to be the only model that would facilitate the ability for him to own his own business and you'd have control over the services that were provided and make sure things were done, done the way that you all agreed on. [17:00.0]
Blair: That's right. That's right. And I think the most so, so that, that was, that was right. Just like this, Whoa, look at this difference between what I'm experiencing and working so hard over here versus the, the experience with this other office. And so that was exciting. I would say that was realization Number one. Number two was when my general manager in Nanaimo saw this success, he was very quick, David. He was very quick to jump over to Vancouver. So, he approached me and said, Hey, I see what he's doing. I need to do this for myself. And I said, yeah, you do. And so, he jumped over to Vancouver and started the third office in Vancouver. And so, I knew general manager at that point Stu Hopewell. And so, we would all get together every Wednesday morning for an hour, the four of us. And something really eye opening started happening. There really, it was an opportunity for us to have a touch point to just all talk. But I was a member at that table, listening to these guys who were my peers, who were experiencing things in their business, some of which I had experienced before, but many of them, a lot of which I had never experienced before, but I was learning from very much so, so just that we called it a mastermind. [18:26.4]
And that was a huge moment of like, Whoa, this is not me imparting wisdom to these guys. The absolute opposite is happening constantly. And I could see my business radically being improved as a result of what I was learning from them and vice versa. And it was just so clear, like what we're going to achieve as a group here is way bigger, way more powerful than the path I was on as an individual. No question. So it was that it was that mastermind concept that we've leveraged as you guys know, you know, significantly throughout the organization was, it was the very first time I had ever experienced that. Cause until that point I was like many entrepreneurs; I was a rock. I was by myself. I was bashing my head against the wall, you know, just figuring it out. Right.
Dave: Well, it's, it's pretty cool, what happens next because you put your mastermind together and then you decide to take a year and go and really dig into what the franchise model is. It looks like, and you start to interview CEOs from different franchise networks and you've got a variety of responses from them, didn’t you? [19:32.8]
Blair: We did, we did. We got some really interesting are so, so yeah. So, stepping back, I did exactly that day. I took the neck when I, when I, when when the light bulb had gone off, like, okay, this is the way to go. This is the way to grow as partners. I made the decision at that point to take what, what became a full year off. I turned the reigns over of our Nanaimo office to Stu. And I think it's really, really important to know, like if that initial business model hadn't been built in a pure, simple way with documented procedures that never would have happened, I never would have stepped out of it and stepped out of it enough to actually take the steps that I took in the following year. So, I think that's really, really important like the, the, the, the business model had to be simple, right and executable, repeat, repeat, repeat, no key individuals making key decisions that are, you know, gut instinct decisions. And you can't have that in a scalable business. You just cannot. And I think that's really important to, to state, we, we were very fortunate to have that structure, so I wasn't stepping out. And so, so yeah, we did exactly that. I started, I started digging. I knew nothing about franchising, absolutely zero. So, I started, you know, trying to educate myself and that just meant calling people. [20:52.5]
Duane: What year was this? I want to kind of put some perspective.
Blair: This would be 2010, 2000. Yeah, right around 2009-10, Duane I'm pretty sure. And then yeah, so I just started educating myself. And what I learned in that period of time was the concept of a regional partnership. And that was a game changer for me. I like many people, you go to a subway restaurant, you have no clue that that is a regional partner model where, you know, an individual will, will be responsible for expansion of a brand in a particular region for multiple locations. And so, I basically learned about that concept which we then leveraged in Alair, right. So, it was a, yeah, it was an, it was an interesting year of getting all the legal work together, having these conversations with people that were very experienced and then taking it to market. So, bit of a wild gamble. [21:56.6]
Dave: What percentage of, you know, executives that you spoke to said, don't do it. You're crazy to do it in this industry. Like how many times did you hear that?
Blair: I continue to hear it.
Dave: Yeah.
Blair: Less now, but if not and Dave, not only, not only very tenured executives and franchising, but even people close to me or people in con, certainly people in construction, everybody in construction, like, I'd heard that so many times, so many times, and I just refuse to hear it. If there was ever an industry that needed structure support and, and scalable a scalable process for, for growth, this is it. Like, so yeah. I heard it. I heard it over and over and over. Yeah. [22:44.3]
Duane: That was fuel.
Blair: Oh, totally. Yeah, totally. Totally. Yeah. So, so yeah. Then we, we, we just, basically, we started the, the, the intent when, when we decided to, when, when I say we Alison and I when we decided to grow with the franchise model and commit that year from day one, it was a commitment for both Canada and US. I figured if we're going to do this, we're going to go for it. And so, while we did all the legal work for Canada, we duplicated it from the US we did all of the, you know, the work required, although we didn't pull the trigger in the US. We purposely started our rule in Canada because it was a little closer to home and that was logical, obviously. And then once we had a footprint there, then it was 20. I want to say, 2014, 20 end of 2013, 2014, we opened our first, US office. [23:40.2]
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. [23:54.2]
Duane: You've had success. 2013 is starting to grow eyes on the US you know, it started to think this thing is going to grow here, there had to be some challenges. So, you know, maybe what were some of those that, that helped you maybe even take a gut check and clarify a little bit.
Blair: Oh, it's funny. You know, I I've had this question before Duane and I can look back and say, Whoa, that was, that was a particular challenge because it seems like it, and it continues to be the challenges, the challenges keep changing. Like, what was the challenge in 2013, 2014 is, is not a challenge today. As you have some success, you create a whole new set of problems. And that just, that just keeps on happening. So, I would say if I was to summarize, the one biggest challenge is that we were bringing an entirely new concept and we're on the surface was entirely new. It's not entirely new. [25:01.0]
It's far from new, but so many people's beliefs about what a custom home building company should look like, or how it should operate, what we do, or how we're structured today is very, very far inside of that belief.
So that has been, that's been, if I was to summarize the biggest challenge we've had since day one, we just talked about it a few minutes ago like, that's it, you know, you give us your, you're doing what. That’s a common response, I would say, that's, that's the biggest challenge. And that just takes, honestly, the only way you overcome that challenge is proof.
Duane: Is proof validation. Yeah.
Blair: Yeah.
Duane: Well, and the one thing that's like, I can say that's helped that just in the time that I've gotten to know you, and I think anybody that's spent time with you as you've, you've definitely leveraged the power of surrounding yourself with good people. I mean, having those good people that make good decisions in those moments that can, that can tackle a lot of challenges. [25:58.7]
Blair: There's it's like, I mean, it's far from cliche, it’s it is it like, you, you, you take the best. I say often, you know, put me in the seat of a fighter jet and, and we're all dead, right? Like, or anybody for that matter, who isn't a pilot. So, it's the same thing here. Like we can have the best business model in the world, we could have all sorts of wonderful concepts, but if you have the wrong people in those seats, it's worthless, right?
Dave: So, you've, you've had some of these principles, but in the last year, you and your team have developed a bit of a mission that you’re on. Why don't you share that? Our building nuggets one, is kind of similar, but you guys have a very simple way of stating what you're hoping to achieve in the industry or what you are achieving. [26:43.2]
Blair: It's pretty simple. Our mission would be to, to create the, to take existing home building companies. And de-risk them, make them as profitable as they can possibly be and make them into an entity that is truly saleable. So lowest risk, highest reward, most profitable construction companies in the industry. That that's our goal or our mission, you could say it that way. Pretty simple. And honestly, Dave it's I don't want to say this in an offensive way to anybody who may be listening, but that's not a tall, that's not a tall, tall ask. I mean, our industry is struggling and it has been struggling. There's a lot of guys out there that are working with guys and gals that are working way, way, way too hard, way too high levels of risk and ultimately, and many of them doing it for 20, 30 years to have absolutely nothing to show for it. That is so common. Right. And I just believe in it, it can't be that way. It shouldn't be that way. [27:52.7]
There's a different way. There has to be a different way. And the way that you achieve all three of those things is through systems and structure. And, you know, it's interesting, like I think like as a, as, as humans, this is going to get a little philosophical, but where, where we have really done so well, I mean, as a species you can say is our ability to communicate and collaborate and we need to live in a stream. So, what I mean by that is you could be the very best real estate agent or no, you could be the very best auto automobile engineer in the world, but if you are living in the 13th century, doesn't really matter. Or if you're living today and you don't have access to auto manufacturing and sales and finance, and resources and all of those things, the very best automobile in the engineering world can't do anything with that. So you could, you could be a really, really talented individual, but if you aren't in a stream, either upstream or downstream of a business system that is really leveraging your abilities, it's, it's kind of for not. And that is the case for all of us, no matter what business we're in, no matter where we never, whatever, we need to find a way to put ourselves into that stream, where we've got good inflow of opportunity, we can produce and we have output. [29:16.9]
That and I feel like that's what our business model has done is it's allowed guys or gals to just plug into that stream where they can de-risk their business. They can cut a ton of the things out that really don't need to be there to be more profitable right now and turn it into a true business system that is actually driving the value to the shareholders that is worth something to exit in one day. And so, I don't know, maybe that was a confusing way to describe living within that system, but we all do. We're all doing it. It doesn't matter what kind of business you're running, no matter what profession you're in, you need access to those, to those you know, both upstream and downstream solutions in order to find success. And I, and I think it's as simple as that, you know, that's a big part of what our mission is. It's just creating that, that ecosystem for, for, for guys to find that success. [30:11.7]
Dave: Do you think it's a relief to people not to have to figure out everything on their own? I mean, you, you discovered that with your mastermind early on, but we see the amount of pressure that business owners are under to get everything right. You got to get the marketing, right. Every, everything falls on you as the, as the, as the key person. And so, one of the things that was attractive to me about this is you've got experts working on all the stuff, somebody smarter than you on every single thing, you don't have to figure it out anymore. Like you said, you can just plug right in and whether it's marketing or training or process accounting, every single facet of the business has got experts working on it all the time. Just the acceleration is key. [30:58.6]
Blair: It is. And it's and I, I totally agree, because it's daunting to think of having singular responsibility for all of those things. You're dropping something that's for sure. And I think it's never; what you were saying Dave has never been more, more pressing than it is today. Just at the rate of change, be it with processes, you know, systems, technologies, finance, like it's changing, right. Things are changing really, really, really fast. So yeah, you need to have, you need to have an organization that has expertise in all of those things. And the only way you achieve that is scale. You don't have to look very far like, and I, and it's been interesting to watch, especially with COVID you see the, the downtown real estate, the retail sectors, they're just convulsing with change, you know, like literally complete, we've seen lots of companies on the chopping blocks, total reinventions. Like this, you gotta, you gotta move and you're going to move quickly, or you're gone. Right. And I, and I don't want to sound alarmist or, you know, like over the top, but it's a reality of, of just this, the time we're living in things are changing quickly. You have to have scale and have the resources to have, you know, the, the, the people or the resources in place to, to have an eye on all of those elements in your business, or your toast. [32:25.9]
Duane: And it seems so much easier when you're nimble.
Blair: Yes. Yup.
Duane: You know, to make those quick moves, adjustments, changes versus trying to steer the queen Elizabeth.
Blair: That's right. That's right.
Dave: It's interesting too, when everybody thinks about scale, they automatically think of getting bigger. But you've engineered this thing for different economies, or your team has engineered this thing for different economies so that you can scale down when you need to as well and reduce, reduce the risk. I think that's something that people forget, but in times like this, you, it comes to the forefront where you're looking at what happens if the economy shifts, and I've created a top-heavy business model, and maybe we'll dig into some of the things that help to keep a business lean and mean and profitable in any market. [33:12.1]
Blair: Hmm…hmm. It's so it's, yeah, it's a great point. And there's a lot of different elements to that nimbleness, right. Like the core business model, being able to scale up, you know, we'd see partners scaling up three, four, five, 600% in a year, and others, you know, sickness change, whatever you can retract very, very, very quickly at the core of not financing client’s projects. That's a huge part of that, obviously, but that flow is right up to the franchise or level. We have no debt we are pure in ownership. We are not beholden to a group of shareholders telling us what they want next quarter to look like. So, all of the people that are deriving success from the business are the ones that are controlling the business at the franchisee level, the regional partner level and the franchise, or and all of us running, you know, virtually no fixed overhead speak of can all scale up and down very, very, very quickly and not be beholden to because we didn't need the money to scale up. We were not beholden to shareholders dictating how we behave to reach certain goals, which is, it's a big, that's a big deal. I mean that. [34:30.4]
Duane: Big deal.
Blair: It's a huge deal, changes the courses of a lot of businesses.
Duane: And it's common place today.
Blair: Yeah, it is. It is. And I think, you know, that's interesting, like we're seeing consolidation in a lot of different industries and it's exactly what we're doing, right. We're consolidating to get scale and all of those things, but the ugly side of consolidation usually is exactly what we're talking about here. Lots of control tail is wagging the dog, the thing becomes totally impersonal and, you know, can have a lot of bad attributes as well, right. Which we were very fortunate to just not, not, not have that.
Dave: So how does somebody come in and not feel like they're giving up control? How does a builder who's a successful builder right now come in and feel like, and just decide they want to be a part of it, or learn about being a, becoming a part of this and not feel like they're going to lose control? [35:24.2]
Blair: Exactly what we said 20 minutes or so ago, proof. Like we have clients, our clients, the franchisor has clients. Our clients are our franchisees. It's that simple. So, the way to validate that is to talk to other partners. Beyond that, when I can say is that, you know, our success to date is because of one thing and it is, and we touched on this already is really, really talented folks coming into the business that are developing the business. So, I, you know, I think it's really important like I describe our role as a home office team is not to be a hierarchy leading the charge. There's an element of leadership, of course, but really our core role is to attract the best talent, bring them in de-leverage them of all of the burdens of running a business and allow them to lead the business and tell us what they need. That's our, that's really our role at the home on a home office level, which is which we've done through, you know, our innovation structures and whatnot is to rely on partners and project managers to, to, to build that future. And it's our job to listen, to build those structures and to push them back out into the organization. It's a very free-living sort of organization, right kike it really is. To your point, Dwayne being nimble, like that's how we remain nimble is we, we gotta recognize that the ownership is really, and the direction is very much at the partner level. [37:05.2]
Duane: That's pretty remarkable. I mean, you've taken the mastermind concept to way over the top, to the point where everyone, when folks come in, I hear it from, I mean, I know myself from being involved and other builders and remodelers that have come into Alair that, you know, when they come into this organization, they've got a seat at the table they want, company level calls that they can get involved on there's initiatives, innovations, the voices are heard, and that mastermind is from top to bottom. That's pretty unique. [37:30.4]
Blair: It is. It is. And, you know, I'm envisioning somebody listening to this. It, it works for a certain type of person, which I think is really, really important to point, point out. There's some, there's some, you know, personality types that this just does not work for. It just can't work for. So, but if you, if you are, if you're in one of the you know, the key things that we look for is you've got to be open. You've got to have an open mind and be willing to live within an 80- 20 rule to say, you know, there might be 15 to 20% of the things. Maybe that's not exactly how I do it. I don't agree with that and whatever, I maybe don't like that. However, that 80% just, just changed my life by 500% like the good is so much better than the bad. And I think it's important to state that, like in an organization like this, you, you, there has to be an open-mindedness and a certain level of empathy for everybody involved in order for it to, to just work, right. So, there's definitely limitations, I think with personality types where know complete control freaks, who know everything and know more than everybody else, they don't work well in teams. But humans by, by as a general rule, I think we really do, you know, we, we really do. That's, that's where success in the past has come from, you know, in a lot of different businesses I'm sure. [38:56.1]
Dave: What are some of the misconceptions about Alair that you hear when you, when you reach out to somebody or you're, you're, you're looking at a builder and saying, Hey, I wonder what that, I wonder what that builder is like.
Blair: I don't know that there's a lot of different ones. I would say probably the, the main one is that I hear is the misconception that franchises are for, you know, really, really small, you know, five, six, $700,000 a year companies and that's it. You know, that's a pretty common misconception and I understand where that comes from, but what's missing from that equation is the, you know, the, the auto dealerships that are, you know, groups that are doing hundreds of millions of dollars a year as a franchisee or on and on and on and on. I mean, like there's lots and lots and lots. There's no shortage of examples of very, very, very large-scale business within a franchise model. It's just not in your face. When we, when we tend to think of franchising, we think of handyman, you know, Ma-Pa sort, sort of operations. And it's really not the way, I think, 30 years ago, that was probably a lot more accurate than it is today. [40:08.2]
But even, even within those smaller concepts, you, you don't see a lot of systems today that are actively pursuing singular ownership. The vast majority of systems, even in, in those very, very small revenue systems, they're looking for more sophisticated multiunit partners that are, that are looking for scale. And then, like I just said, there's lots and lots of systems that have like car dealerships are example or hotel chains where, I mean, these are substantial operators within a franchise model. So, I think that's probably the biggest misconception today, but I do think it's going away pretty, pretty quickly. [40:45.1]
Dave: Yeah. Not very often, do you hear of a builder who is looking at opening in a second market. The majority of the ones that we've talked to feel like they have enough on their plate now, but it's interesting being on the other side of that, you know, in Alair with 20, about 70% of our offices on their three-year plans have the ambition to open additional offices. It's completely flipped that around. It's something that we see becoming more and more popular because they have the horsepower, they have the structure, they have the resources, they have the confidence to do it because they know something, they've got some things figured out that allows them to, to just, I don't want to say cut and paste because there's way more to it than that, but the local relationships that are required, but it's pretty exciting to see it happening like that.
Duane: What do you think when you think about the ultimate business model? I mean, how important is it to have that business model in place to just, it seems to me to be just paramount. [40:44.2]
Blair: I, I can only speak from my personal experience Duane, because I know there's people that are wired different ways than, than me. But for me, I love when things are predictable, when I have a very high degree of certainty to what the outcomes should be, or it's probably going to be. And once you've got that and you feel like you can then now take this and you can duplicate it in a predictable way and then speed that up and speed that up and speed that up, speed that up and just get faster and faster and more efficient. There's something about that, that is, that is really, really appealing. You cannot, I mean, we've all heard, you know, you can't scale chaos and there's lots of other, probably less pleasant ways to state that. We've all heard that and they, they are very, very true and the very, the very flip side is true as well. And you have to have the fundamentals, right. [41:43.8]
Do they have to be perfect? No, in fact, I don't think they should be because you, like, we were just talking, we are, we're in a changing environment. We got a lot of personalities at play. We will always be fluid like the business model has to be changing, but it has to be, you, you live within that 80-20 rule. It has to be 80% right. And when it is, you can scale, right. And without it, it's just a nightmare. We've all been there. We've all experienced just that, you know, that feeling of like, Whoa, this is off the rails. It's the worst feeling in the world.
Duane: Yeah. [43:16.6]
Blair: You know. I don't know about that
Duane: It certainly does. I mean, cause we talk about, you know, even on our website, we build out this table of elements with all of these things from episodes and conversations, parts and pieces, none of its new it's, you know, it's just things that have been acquired and they need to be in your business in some form or fashion. But after this discussion, they really makes me think that that, that core model, business model that you're running is what really helps you to, to, to corral all of that. You know, without having that business model in place, you're not going to know what to do with all this stuff. You're not going to know where to put it well, you know what comes first? What's the order of operations, all that. So, it's, it's very interesting to see that the power of having a really well-done business model.
Dave: What comes to the top of your mind when, like if for advice for the audience. Go out and put these things into your business, what would your advice be? [44:07.2]
Blair: I would say there's a, there's a lot there, Dave. So, I don't know that I can satisfy a short list of here's the key elements and it doesn't probably really matter all that much what the, what those are. I think there are, there are, there will always be multiple ways to skin the cat, right? However, you have got to get the individuals out. If I, if you summarize it in a way that makes sense in my head anyways, that's one. So, I like, like going back to where we'd started this story, I had to extract myself for a full year and feed my family in order to get to the next level. And I think like, so whatever it is, whatever those key elements are, where they are, they are duplicable enough and the roles are defined and you can expect those predictable results by somebody other than yourself. That's it. Right. [45:04.4]
So, there's, there's, there's probably lots of key elements there that we could get into. I think those are less important than just that, that, that general concept. Like you have to have that and once you've got that, then you're able to step back, right. Like you can and so like, you're talking about, you know, lots of the partners plans who have, who have plans for three or four or five offices and, and, and maybe prior to Alair or another, you know, build, they're looking at that and say, good grief like, you know, no, thanks. I can't imagine operating at six different cities or whatever. And I would say like, not, this is about me, but from, from my seat, I'm living a testament of exactly that, like how on earth could you, could you be involved in a hundred different offices in two countries, you know, like, it's that fundamental. Like you've documented the roles, you've documented the steps. [45:57.2]
It's like if we were all driving around in cars and there were no laws, if there were no rules on the road, you know, it would just be carnage and chaos, right. And that's what a lot of small businesses run like, right? So, it's, it's literally that simple. If you can, if you can lay those structures and you can get rid of that courage and chaos and you can get to a predictable results, now you can scale. It's that simple. And I think we've talked lots about this internally, and I've shared here, the fundamental missing ingredient, if you will, that most small businesses have is no accountability, zero, like there's none. And I can personally speak from experience, until I was being held accountable in a mastermind with three or four other peers, the years leading up to that, there is no way I would have ever been able to step out of my business. I was going left today, right tomorrow faced with the exact same decision, making different decisions based on how I felt that day or that week. Like we, as a small business owners, without a track to run on, without those documented principles, we are our own worst enemies. I do believe that we're also our own biggest advocates, but we can also be our own worst enemies. So that accountability is huge. I know, I probably didn't answer your question, Dave, but it's really that it's. [47:17.7]
Duane: No, I think that's, I think that nails it really. I mean, that's, that's a huge part of it. The key individual thing I kind of wrote down might even be it become a new element on our table.
Dave: So, what's next Blair?
Blair: I think the best way to answer that question, Dave is what, what's not next? And I think it’ll answer your question and what, what, what I mean by that is that I think the risk for any company where we are right now is getting involved in things, we just shouldn't be involved in. That's that's what I would say. So, what I mean by that is it would be really easy to see, Oh, here's a, here's an interesting thing that we could internalize and take a piece of and be a part of and quick, you know, bit by bit, you start getting distracted and you're into a bunch of different things that are outside of your core business model. The reality of it is, is for Alair in North America. We are less than half of a percent of what we will be one day in North America, I mean, we haven't even started. [48:22.1]
The opportunity and the economy is that we are operating in is so massive, we have a long way to go, just getting, just, just, just getting better at what we do today and we'd be very, very foolish. I believe to step outside of that. We've got a golden opportunity to step up and really, you know, lead in an industry that needs leadership and there is so much opportunity in the lane that we're in. So, if, when I look to the future, Dave, like we, we could, I could spin out a bunch of monetary goals and targets and whatnot that I have in my head. I don't know that that would be responsible, but it's just doing a lot more of what we do today and continuing to attract the highest caliber partners that we can find and not getting distracted. Just very, very singular focus again, back to what we were just talking about, just get better and better and better at executing on that very refined model. That may sound boring to some, but it's super exciting to me because that's it, that's the key to incredible growth. [49:29.5]
Dave: So, we do this on every show Blair with our guests. If somebody wants to get a hold of you or to learn more or find out what it could mean for their business, what's the best way for them to do that?
Blair: Best way to do that is our head office and discoveralair.com is a great resource. And then of course, if anybody wants to contact me directly through that office and that could get scheduled.
Dave: Thanks for doing this.
Blair: Good stuff.
Dave: And yeah, its totally great. [49:56.4]
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