If we pulled your team into this room right now and said, Hey, what do you think a tie going away for six weeks? What would their answers be? Probably good.
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(01:12): Our guest today should be an inspiration to anyone getting started in the custom home building or remodeling world. He started from the bottom and worked his way up and now has a business that will do roughly 70 million a and revenue this year. Ty aro, founder and director of aro constructions believes that building a dream home is the culmination of years of visualizing idea sharing and hard work. It's something very special and he treats it that way. And it's also clear. He believes the same about building a dream business. David and I reintroduced the tie by Russ Stevens, a fellow osie and guest on episode 67. During that episode, we touched on some of the common things we see in the very, you know, the, the, the very successful, valuable and rewarding businesses. And Russ said without hesitation, that we should have tie on the show. So here we are welcome tie, or should I say good a mate, hi, yours. How you doing?
(02:04): Doing well, doing well. We've been looking forward to having you on the show because Russ said glowing things about you. He said that you've become a celebrity and we thought well, we can't miss it. We can't miss a chance to have a celebrity, uh, on, on the show, but nobody gets to celebrity status. Nobody gets to 70 million a year and you're, you know, and you're in revenue. And, and you're just telling us about, you're about to embark on a, on a six week vacation, away from work. Nobody gets there without having a heck of a good story. Yeah. So how did this all start out, Ty?
(02:42): Well, I was, uh, 17 years old when I left school. I was re I, I failed at school to be honest with you guys. I, um, I was more of a sporting person back in the day when I was younger and school just wasn't for me. And, um, I've been, I've said it to a lot of people over the years. I've got pretty bad dyslexia. Um, so reading and writing for me is really hard and I, you know, I'm not sensational at it. And I tell my clients that and other people in business that sorry about the spelling mistakes in my emails, but that's just who I am. So that was a challenge for me to start, you know, having that dyslexia. But same time, I've always been a driven kind of a person, especially with my sporting sporting stuff when I was younger. So when I left school, I didn't really know what I wanted to do. I wanted to be a professional football player over in Australia. It's called NL, it's rugby league. It's not grid iron, but, I, uh, had a crack at that. And when I, when I was 21, Isn't that on kind of a, of around it. It's not really a square field. It's a sort of oval round field.
(03:44): Yeah. That's AFL, that's a different sport, but, um, okay. Just, it's kinda like, but it's, um, a few of the L players have gone over to the NFL and played in America for a few years. So it's kind of similar, but different. It's still, it's still pretty hard for, but anyway, so away from the football. So what I did, I left school didn't know what I wanted to do, played football for a couple of years. And then I, then I broke my back when I was about 19 and that kind of stopped football in its tracks straight away. And I wasn't paralyzed by any means. I just broke. I had a traction in my back and I just couldn't play football again. So then I was like, what do I wanna do? I was always be and good with my hands. And I decided to be a bricky laborer.
(04:23): So a block layer sort of bricky um, and did, did the laboring side of things for a year and really loved it. You know, I was getting paid $400 a week, you know, I thought that was massive money at the time when I was, you know, 19. And, and then after that year, I ended up becoming a carpenter. Um, the premise carpenter did my apprenticeship. And when I turned 22 and a half, I think it was, I decided that I wanted to go and do some contracting in my own business as a carpenter for other builders. So in Australia, we, you know, we, we get paid a, a lump sum amount to go and build the frame for the house. And we can, I was hard as we want or slow as we want or whatever, but you just get paid that, say 20 grand to build the frame for the house that in its early days was good for me because I learned business.
(05:10): And I, you know, I had no idea about business at all. I, you know, I've had no father light figure above me to show me how it was or, or any other people around. I just kind of learned it as I was going to learn a lot of the mistakes when I was contracting to builders, just from, you know, spending money before I actually had it. And, you know, having a good time as a, as a young 22 year old, um, does at that point in time in his life. And it was pretty quickly that I found out that I was keen to be a builder and a developer, but, um, you know, I didn't do my builder's license until I was 24. And when I, when I turned 25, I started constructions. So the business is it's 10 years. This year, it's been a journey.
(05:52): It's been an absolute journey. I've, I've, I've lost a lot of money. I've made a lot of money. , you know, I've, I've worked long hours for the last 10 years. Like this is the first year that I'm really pulling back a little bit personally, you know, I've had to work twice as hard cause my dyslexia and everything like that, but I've been, I've been grateful over the journey that I've had is I've been around mentors and coaches and, and, you know, I, I knew that I needed to learn from other people. Um, and I'm a big fan about that. So I've been, I've had about four or five coaches over the years, um, since I was 25 and now I'm 35. It's, it's fast tracked my career for sure. I was never aiming to turn over 70 million a year. I was really just keen to build one house of the time and do a really good job and make a little bit of money out of it and, and, and do it that way. But it kind of spiraled real quickly.
(06:44): You and I talked previously and, and even with us talking with Russ, you know, it, it's a, it's apparent, you've done the hard work. You don't all the, the fundamental things that you had to do from the beginning, you know, being a laborer apprentice, carpenter you work, you came business owner got mentors, but that that's, I'd love to just dig on that a little bit more. I mean, how did you, how did you grow the business so quickly once you did kind of get, get in the groove and get going? It, it grew pretty substantially in a short period of time as a 25 year old builder with no experience to show anyone. It was really hard to lend my first job and all, all I needed to was get one job under my belt. And I, I reckon I could use that as a bit of a, a marketing tool to be able to show people through a house. So I decided that, and I don't recommend this to anyone, but this is what I did. I found a guy that was keen to build with me, but he want, he wanted the cheapest price by, you know, getting a really cheap builder outta a young builder, which I knew that from the start for, I signed the contract and I said, you know what? This is a beautiful home. You know, it's on the river in Brisbane, you know, in a multimillion dollar area, I'm just gonna have a crack at this house and, and make wages out of it and, and use that as my, my booster.
(07:52): So anyway, I did that, I did all the fundamentals, right. I hit budget. I hit time. The quality was great, made a wage out of it, which is great. I don't recommend that to anyone by, by any means in today's market, but that's what I did for my first home. And, and then after that I had, you know, three or four people hit me up straight away just from that house, from the area. So then I went and did another, another job, and same thing happened there. So then in the first kind of two to three years, , you know, I, I did one house and I did two houses and then I did three. And then I actually, and I'll, this is a really good story, cause I think it's needed to be talked about. But, um, back to my dyslexia, I, I wasn't the most detailed estimator. Right? And in, in the early days you gotta do everything. You gotta do the estimating, you gotta do the, you know, the contracts you gotta do, you know, the programming supervisor, the, your whole, you don't want, you're wearing every hat. And, you know, I was really, really good with people and supervising and, you know, selling, I can, I'm a good natural seller, cause I'm pretty honest. And, and I just say how it is. And, but when it comes down to the detail, you know, to make sure that I've got all my contracts in place, my specifications and all that, that correct, that wasn't my strength. And, and the third house I built, I lost 400 grand . And, um, and that was a big shock to me at 27 years old, I had to sell the house that I was living in. And, you know, I, I nearly went bankrupted at that time to be really Frank with you.
(09:18): I just got really lucky when I sold my house to get enough money to pay for my bills. So that made me think, all right, what I need to do right now, I need to, I need to bring someone into the business is my first employee that could offset my weaknesses, which was, you know, the estimating, the more detailed work. And so I brought in a junior estimator. And when I did that, that's when the business started growing, I had confidence behind me estimating, I had confidence behind my contracts. I could run six or seven jobs myself, but I just couldn't do. I wasn't really that good at the office work. So he was looking after that to be fair. You know, we probably were too cheap in the early days. And I just hustle through that, you know, thinking that was a good price, but really in today's market, if I look back what we're charging at these days on our markups and margins, compared to what I was doing back in, you know, the early, early years, it's a lot different and I understand business a lot differently now.
(10:13): And you know, I, I can, I'm fair to say that how we've grown so quickly, it's, it's purely word of mouth, but having a good marketing plan behind us as well. And we use social media and, you know, you know, websites and all that other stuff, Google and, and whatever. I've got a marketing team now in, in the business. Um, so every department in the business has got a manager. So that's, that's been mass that for me, and that's probably the half, the reason why I can go and have a, have a six week holiday. Now there's, there's 60 people that work for me in the business. And you know, there's 10 managers across the board and I got a general manager now, and that's a mix. It's not just custom home doing some multifamily stuff, maybe. Yeah.
(10:53): So I'm doing some multi, yeah. We call 'em sort of duplexes and villas. And we're doing some from N D I S, which is dis disability housing as well now, um, in units. So, you know, bread and butter was my house for so many years. And I've just slowly grown into a niche market on the gold coast in Queensland that, you know, everyone wants to live on the beach and there's the land on the, on the gold coast. It's super expensive and you can't build a house and anymore, it's just too expensive. So they're doing townhouses and villas and duplexes and, and there's just no one doing it on the gold coast that we do. So we we've really held the market and on the gold coast. And that's another reason why I've probably scaled so quickly in the last two or three years, mainly, you know, we've, we've, we've doubled our turnover in, in 18 months through COVID it, which again, I wouldn't recommend that to everyone either. And that's been a journey in itself, but I've got, I've got a set of balls to have a crack, and I've got really good people that work for me as well. So I think that's key in any business is having the right staff.
(11:51): This story starts out with you growing the business. Yeah. And you focusing on clients and, and, and getting there. And the first breakthrough comes when, well, one, you make a big mistake and you take a $400,000 hit that forces you to bring in an estimator. And you've mentioned bits pieces of your team. Now, how did the team grow from there? Because it's one thing to attract amazing clients and nice projects. It's another thing to attract the right team. So how did you grow that trick, that team and what is it about that team now that continues to attract more team members?
(12:30): I think it's, it's the same sort of model was getting the right client. Cause in the early days I wasn't getting the right clients either. I was getting, you know, pains in the asses and, and that's, they always wanted the cheapest price. They wanted it to be perfect. And, you know, that's just educating the, a, the builder to understand what avatar client we wanna aim for. And, and we gotta do that qualification process and not just try to take every job on that comes to our, comes to our door. So to build, I I'll get to the staff quickly, but just to get to the perfect client is where I found the, the happy, the happy medium is when we started charging for quotes, uh, about two and a half years ago, we like, we charged five grand to do a, a quote right now, if someone's all about money, they won't pay that five grand and they'll, and they'll move on.
(13:19): And we, we don't ever tender or price against other builders either. That's a, that's another qualification thing for us. We earn the trust from the client in the early days. So we don't have to quote against other builders and it comes down to the lowest number. So that's now brought clients into the, to the LRO business that we wanna work for. And we got repeat customers now, and, and I'm building a family on the, on the client side because they're all the like-minded people, they're all business people. They all, they all wanna have a good result, both sides of the fence. They've all paid for, increases for the material increases across the last 12 months. So, you know, these people understand business and they wanna support the builder. Cause that's, we are part of their team is the developer. And if they don't support the builder, then the team breaks down. And, and that, so going back to your question about, about the staff is I won't lie the first five years. I Mishi probably 50 times, right? 100%. I, I didn't have a system in place. I didn't have a process. I didn't know I was going by relationship like emotion. I was like, oh, this guy seems like a really nice guy. He'd be a great supervisor or a great contracts administrator or a great estimator or project manager, whatever, if it feels good, do it.
(14:32): Yeah. Just that's, that's my personality. Unfortunately, you know, I was just, I'm very like that. Um, and then when I joined a P B with Russ and the guys probably three years ago, now they gave me the system and the process to, to recruit and recruiting is the number one key in business to be successful. And if you don't do that, right, and you're growing, you'll either fall over or you won't be successful. Um, so having that process, so pretty much what I've done, I've built a culture around that. We have a good time. We go hard through the week. We got respect to our clients. We build quality stuff. If, if it's not good enough for our own homes, it's not a good, good enough product for our clients. So I'm all about quality of a budget. So if I've gotta rip out a kitchen, cuz it's not correct, or there's a minor defect and I'm not happy with it, that kitchen comes out and gets redone. So having that mindset and that, and that kind of, um, attitude and driving it through the business I've now, now got people exactly like me doing the same thing. And it's becoming like a family culture in the business and we have a good time doing it. And we're, we're the most youngest company on the gold coast of what we're doing. Average age is 33, you know, but I've got some really good people from bigger companies. That've joined LRO now. And now I've got some muscle around the bones, wanna level up, connect with us to share your stories, ideas, challenges, and successes.
(15:58): The builder nuggets community is built on your experiences. It takes less than a minute to connect with us@buildernuggets.com, Facebook or Instagram. One access to the resources that can take you and your team to the next level. One call could change everything. Ty. We know that you've worked with Russ Stevens and some other, you know, coaches and you've had mentors through the years. You've obviously got a growth mindset. Yeah. What do you do or what have you done to encourage and elevate your team members, you know, to, to, to have to go through continuous learning and growth for themselves? What kind of things are you doing there?
(16:31): What I try to do? So I, I, you know, I, Russ and Andy and the guys at, um, a P B, they, they don't state mentor myself. They also mentor my main managers. So I try to bring as much learning into the business as possible. Cause I think it's important to grow your staff. If you can't grow your staff, you can't, I don't think you can grow yourself. And on the first time to say that, you know, you can't grow any business by yourself, it's, it's, you know, it's, it's a team effort and there's been a lot of people along for the journey that aren't with me anymore. Um, which is unfortunate. The first estimator that I was talking about, you know, I got to a point in the business where the business outgrew him to a degree and, and hard for me, you know, that was last year, end of the year, finished up. And he just said tight. The business is just getting too big for me now. And you know, he was with me for 6, 6, 7 years and I I'm crying, you know, um, when he left and it was just really emotional cause I, he was a big part of the business for so many years. And, and I'll today, I'll say it. And I'll say to in 20 years time, I wouldn't be where I am without, without that guy. And, and a few other guys aren't here anymore, but you know, not, everyone's got the growth mindset as well. So that's half the reason why some of these guys do bail is because they get a bit unsure and, uh, uncomfortable. And, and I, I just like being uncomfortable 24 7, cause I think that's where you grow and you know, it's a typical metaphor, but it's so true.
(17:56): Like, you know, if you're not uncomfortable, uh, and you just you're cruising. I, I get bored. And as much as my family hate that, cuz they're, they're kind of not growth mindsets either my, my partner and um, my little girl, but it comes down to making sure your staff are on the right align with your goals and, and the business goals. And if they're, if they're not, you need to maybe have a chat and see what they want outta the business. Cuz at end of the day, I want the business to give to my staff as well, not just to me. So if we can for financially and you know, help 'em through to their next stage of their lives as well through the business, that's what I'm chasing. I'm not really chasing to be a multimillionaire. I'm more chasing to, to give back to my staff and to my family and, and my community, but also, you know, have a, have a pretty decent life along the way as well.
(18:48): And like I said, it just comes back at to having the business run itself so I can do whatever I want whenever I want. That's my whole goal from the very start. And the, and the growth has just been organically natural with it. But you know, there was a time there at 50 million, uh, 50 million turnover two years ago that I was like, wow, I'm too deep. You know, this is I'm too far now I dunno what to do this. It was getting, it was nearly outside of my comfort zone that I couldn't control. And that's when I really knuckled down and said, Andy and Russ, I need a hand here because there's a whole different side of the business that opens up when it hits that number. Not just from a building perspective, but from a, you know, a tax per active, uh, compliance perspective, um, you know, health and safety, there's all this stuff that just comes and it felt like it all come up once on me. So we, you know, we pumped the brakes there for about 12 months and, and now we're in a good strong position again. So it just comes down to having the right people
(19:48): When you're, when you were talking about the, the right people, all wanting the same goals and same mindset, how have you documented your mission and your goals or your vision, do you, do you have, did, did you guys sit down and map out some core values and a mission that you're gonna go on together? Yeah, yeah. So we got some core values and like a mission statement end of the day. I don't read too much into the mission statements in the business plans and whatever I, what I try to do is set real, outrageous goals, but then really break 'em down, you know, monthly, we, we, we have, you know, a weekly meeting, a monthly meeting, a quarterly meeting, half a year meeting and a yearly meeting. And we re reflect on that. I've, you know, I've got systems place now in the business. Like we use Asana for, for our project management software, for our, for our staff, which is linked to a, a system called system hub. So all our systems are recorded and documented on system hub, which then are linked into assign, which has the, the workflow I use builder trend from a construction management software and PROCO, we've just transferred to PROCO.
(20:55): So that system works on the onsite stuff. And then obviously we got accounting systems and everything else. So just having the right system to be able to let everyone know where we're heading and that put out before it happens. So you're not, you're not going blind is, is the secret and not, I was, I was going blind for so many years when I was younger. It was in my head, right. I want, I know where I wanted to go, but I wasn't telling everyone about it. And that makes people nervous. But when you gotta, when you gotta plan, you know, you are always gonna at least be successful at some level, if you don't have a plan and a direction, and you're not communicating that, then that's gonna get harder for you cuz people go in different directions and whatever else. So, and the money you lost on some of those projects, you know, that really, that was the education you were paying for
(21:42): A hundred percent. I, you know, at the time it was super hard for me, you know, like my, my partner at the time left me over it or not over that, but I was just super stressed and, and whatever. And it was just a good wake up call to say, you know what, you know, that can't happen again. And, and, and, and it won't happen again. And yeah, we've lost some money on jobs over the years. And, and that, that, that's just part of being a builder, I suppose, especially the stuff we build. It's, it's not straightforward stuff. It's pretty difficult. And you know, when you get into a certain size business and you are using multiple trades on multiple, you know, you might have four or five plumbers that work for you now. And you know, there's so many relationships you gotta keep under control.
(22:20): It's not just getting the guy to come do the work and then pay him. It's, you know, making sure the scopes are right and making sure that he's big enough to handle the, and you know, there's all this sort of SWOT analysis you gotta do with these trades and suppliers to make sure that they're the right trade for your business. Cuz that's another thing is having the trade from back in the day when I was doing two houses at a time to now we're doing units and you know, $15 million projects, are they the right trade over the night? So, you know, it's a never evolving machine. You gotta keep on adapting and, and, and communicating and, and building new relationships. And you know, it's, it's, it's tough. Like it's, it's not easy. Like you gotta be super driven and, and, and want to be a growth mindset. If you don't want to do that, that's fine. And I don't have anything. I don't think there's anything wrong with not growing, but you know, it's not gonna be an easy road for any, by any means
(23:13): Those relationships that you, that you talk about. We see a lot of times that those are the piece that the business owner really holds close to their vest, that they tie the value of their business to. And we find it to be ironically, one of the things that hint doing that, have you been able to transfer the relationships that you built to your team? Yeah. Instead of through you, because that I, we see it all the time and that's the, you talked about being able to do what you want when you want that, that freedom. It doesn't come unless you share those relationships and transfer them over. So you're, you're nodding your head. So how did that, how did that happen for you and do you still get stuck in that, in that sometimes?
(23:55): Oh, that's yeah. That's a great question. And it's probably another really hard thing. These guys do so much for you over the years and, and do the right thing by, uh, and, and you know, all of a sudden I've got six project managers and they've all got their own trades and, you know, blah, blah, blah. It just it's hard. So how I, what I did was I documented everyone that I wanted to use. Okay. So all my trades and I got a black list and I got a, and I got a, I got a green list. The green list means they're all good to go a black list. We don't use those trades anymore because of whatever quality, whatever, letting us down on site, not, not showing up or whatever. And then I said to the boys and girls, if they want to come and bring new trades to the company, that's fine, but they need to go through that process.
(24:41): Um, they can't just be given a purchase order or contract and go they're on site. They've gotta come and meet me. I talk about our values. I wanna see their business, not their business plan, but what their health and safety looks like, what their quality, um, management plan looks like. I go through all these stages. So I'm not just bringing in the cheapest price contractor just to make it a margin, because we all know that the cheapest price isn't always the best price. So having that process in place, which I didn't have that in, in place in the early days, it was getting a bit of a shit fight. There's people coming in everywhere and it's like, who are these guys? So, yeah. So having that process pretty much just like bringing a new staff member on is the way we do our, with our subcontractors and suppliers.
(25:22): And how do they respond to that? Do they value that? Well, they know that we don't, we don't, we mean business and we're not gonna let things fly from the start. Like, you know, that that meeting might go for an hour, you know? So if they're willing to come for that hour and sit down and go through it all and I, you can vibe someone pretty quickly if they're into it or not. And it's just, it's another thing like paying for a quote. It's, it's just another way of working someone out before they actually commit and do anything work any work for you or a client. So I just think that's the best way. Again, you gotta make time for it. It's, you know, it's one of those things everyone's busy, busy, busy. We're gonna have time to sit down for an hour to go through a new trade, but that new trade can either make your money or lose your money.
(26:00): That's how I look at it. It's an asset. And I wanna make sure that my trades are making money as well. If my trades aren't making money, we're making, and that's, that's the secret of the game. If they're not making money, there's something wrong because we are not organized or we are not running the job correctly or whatever it is, whatever it looks like, that's a problem. So just understanding them as a, as a person in a business is, is the secret for us to be able to run a successful project with a new, with a new trade. So you've built a, a, a great team, the culture you've got there, obviously, you know, several, there's a manager of people supporting each other, holding each other accountable. Yeah. Who holds you accountable now? do you have one particular coach or a mentor or somebody that kind of holds you accountable or
(26:41): So what holds me accountable is my KPIs for myself and the business. That's, that's what holds me accountable. So I'll set out for the quarter, all my KPIs through a KPI spreadsheet that, you know, we use it through a PB and that's how I get accountable accountability. If I've, you know, if I wanna make amount of dollars, I wanna, you know, hand over five houses, start five houses, um, have no incidents on site for health and safety. You know, all these things that I need to know about. Um, that's for me, my accountability. Yes. I do have Andy as a accountability coach as well from a but, and the day the numbers and data don't lie yet. So we record everything these days. We're never used to. So that's from sales, from operations, from financials, you know, like I said, quality and health and safety. We got a monthly reporting system that we all sit down with our managers and go through. And I think that's, that's key to any success is we reporting on your data. So to see where you need to improve,
(27:48): I would assume some of your teams holding you accountable as well. If you're doing regular meetings and going through those, those KPIs, that's, you know, that's one of the most powerful things is if the team is all on board with, you know, what those KPI KPIs are, what the goals are, whether you fell short or you didn't now you're doing it. I assume you're doing that. That to some degree as a team exercise, correct. Oh, you have to, because it's, you know, we got six project managers now, so they all look after four jobs each or three or four jobs each and their KPIs are driven to the KPIs for the business. So every single PM needs to do what they need to do to make sure the business hits their KPIs. If 1:00 PM doesn't doesn't reach it. Well, then the business doesn't reach it. So it's a team effort. And that's how, that's how I come across to all the PMs. We don't work in project teams. We work as LRO and that's, you know, 1:00 PM needs a hand with another PM. So be it help each other out, you know, share trades around. If you have to, you just gotta work as a team mate. If you don't work as a team, it doesn't work. And, and there's no big personalities in the business either.
(28:47): That's another thing is like, I don't act like I'm the boss. I I'm just one of the, one of the guys here and saying, it's my managers. If there's any attitude, I admit that in the butt. I just think, you know, I hate getting called the director or the, or the boss or whatever. I just hate that. I just, I'm just tired. I'm I work at El I'm one of the staff, you know, that's, you know, I just don't like having hierarchy in the business. I, I think you need it to some degree to keep people under management. But if the leader wants to be a part of each team member's roles and help 'em out and, and lead into the right way. Well, that's, that's a better way of leading instead of pointing the finger and say, you're not doing the right thing, I'd be really interested if we pulled your team into this room right now and said, Hey, what do you think a tie going away for six weeks? What would their answers be?
(29:31): Probably good. the biggest thing I've, I've seen in my little short career in the last 10 years is I, you know, the business owners become the Roblox in the business. I, I was the roadblock two years ago and I've learned, and that took a lot of learning and a lot of, you know, self, self, you know, growth and whatever to step back and let other people do things differently. And, and, and, and listen. So I'm a big listener these days. I never used to be. I used to be that we doing it this way. And you know, this is, I feel like this is the best way, a little bit arrogant, which, you know, I'm not arrogant as a person, but I was as a, as a business leader in the early Tie, the tot.
(30:07): Yeah, for sure. So, you know, standing back and letting people make decisions and, you know, make new processes is the secret. And that's the reason why I can go away now because I'm, they're accountable to some of their own processes. And, and to be fair, they're better. , you know, some of these people have been in the industry longer than I have, and then bigger businesses and whatever. So they, they bring a lot of experience and you can't, you can't deny that, you know, if they're more experienced than you. Well, that's great. And that's the whole reason why I've employed them to be better than me at their role. So, yeah, they they'd be stoked for me to go away for six weeks. I reckon. , that's the answer that you want. Right. And, and you would be, you would probably equally stoked for them to be able to get away on a, on a great, uh, vacation or something. Just not right now, what they have not right now. So not right now. Yeah.
(31:02): What is the most challenging part right now of owning running a $70 million, 70 million construction business? For me, there's a lot of people who feed every week, right? So when you get to this level, you can't just downsize your business overnight, that that's gonna cost a lot of money. It's, you know, one, you don't wanna do it cuz it's people's wages. And, and like, you know, it's just what I find. And, and this gets a bit scary at times for me personally, is I feel like I've gone to the level where I've gotta keep on going and, and that's fine. Like I'm okay with that. Just the current market at the moment. I just, I dunno what it's like in the states, but building prices have doubled in the last kind of five years. Right. So I can see some kind of not crash, but some kind, probably slowing down a fair bit in the next kind of two to three years.
(31:56): And for me to run a 70 million to a hundred million business, that's a lot of work. I've gotta, still bring into the big business and, and be able to feed the machine. So for me, you know, you had the price increases, which we kind of got caught out with when it first started. And we had a few contracts in place that were fixed and I couldn't change that. So now I've got all, all price increase clauses in my contract. So that's now been de-risked. But I just know that, especially in our space with developers, that the feasibility has to stack up for the developer to do the job. So build prices get more and more and more, which they still are in Australia. There's gonna be a ceiling there soon. And, and then these feasibility won't stack up because our real estate market has slowed down in the last two months.
(32:39): You know, we've seen, you know, a hundred percent increases in the last two years in real estate, which has been great for anyone that's owned the house or, or development, but it's, it's stopped, you know, can't do that forever. And that's what I'm most wary about. So that's why I'm looking. Can I, how can I, de-risk the business from you? Everyone says just niche in one market, which I, I totally agree on, but I think that's also dangerous at my level, um, at 70 million, because if your market stops in six to 12 months, or you've got a lot of people to feed, like I pay between between this podcast 400 grand a month in wages, you know, I've gotta be 10, only over 5 million a month plus you know, more 7 million a month. So to do that, there needs to be some serious work going on.
(33:29): And I dunno if it's gonna be there in two years time. So I'm looking at maybe getting into some schools, you know, schools in Australia, there's, there's not many of them, there's still heaps of schools be built. There's so much, so much happening childcare centers, things like that. Just trying to derisk the, the portfolio to make sure that I have option B and C in place, if it does happen, it might not happen. And hopefully it doesn't, but I I'm always looking two years ahead as a business owner and having an, having a way to actually buy some of the, these developments ourselves and building in as the developer builder as well. That's another way of de-risking it and, and doubling your margins that way. So instead of doing 70 million, I might be only do 35 million, but I'm still making the same margin because I'm go, I've got the developer margin happening as well on the side.
(34:17): So again, you gotta have investors behind you to do that. That's lot of money to upfront to do the 35 million worth of development, but, you know, again, you just gotta be smart and you gotta be alert and you know, it's good here in American guys, builders on a P they, they tell me what's going on over there. And it sort of seems, you guys are ahead of us always. So he, your lumber or your timber, um, has slowly stop going up increasing over in America. I'm not, not sure if that's still the case, but so we've still got increases in Australia happening with LVS and, you know, pine. So yeah, it hasn't gone down. It's just not going up as fast. Okay. So I guess that's the positive. Yeah, yeah. You know, having the rushing wall is affecting us in Australia as well for aluminum and timber still. So, you know, there's a lot of global commentary and movement in our industry that can easily affect our industry pretty quickly and just understanding what we can do to offset that. Um, which to be honest with you, I got blindsided by COVID. I, I thought we're gonna be very, I thought it was gonna slow to out a lot before it actually picked up. So, um, yeah, I, I didn't see that coming, but I don't think yeah, that, I think that surprised pretty much all of us. Yeah. Fully. Yeah. On the flip side of that, I mean, what is the most rewarding part of owning a business of that size?
(35:38): I just like seeing myself, my staff members just grow and, you know, build nice stuff in a local area. Like we've, we've pretty much become, you know, a local name in, in the area, which is kind of cool. And having that is you gotta also perform as well. Hey, there's a lot of people with eyes on you and you, you, can't not perform and you do the right thing, which we do, but just, I'm just proud of what I've done with no, with no equity input from any other people I've done it. All myself had to get a 20 grand loan. When I first started my carpentry business to buy all the tools to now being, you know, like a, you know, I've done pretty well for myself. You know, it's still tough at times, you know, I've still gotta put money into the business to keep things moving and, and whatever, but, you know, I'm in a good position where we could sell this business and make a lot of money out of it.
(36:27): So, but that's not on the radar right now. It's still, still enjoying what I do. As soon as I stop enjoying what I do. I'll probably look at that doing something else, but right now doesn't feel like work to me. And, and that's the reason why I've probably got through the hard times, cuz if you don't enjoy what you do, it's harder and harder every time getting outta bed at four 30 in the morning and, and going to work. So I just like enjoying the building company and, and the life that it comes with it. And now having the holidays that I can, I've been dreaming about going to surf surfing the mental towers of six weeks is kind of cool with my family, my little girl, that's two years old now. And, and, and keep her experiences there that I, I never have as a young person. You know, that's, that's, what I wanna do is, is make sure she gets the right experiences and the travel and, you know, maybe go to America a few times and in the next couple of years and, and, and live life. Um, while I'm still young, that's the freedom part. We talk about all the time on this podcast. We talk about how everybody, whether you're, you know, running a $1 million a year business or a hundred million dollar a year business, you know, there's certain things you can put in place through the systems and the processes, stellar teams, but ultimately you want to get it to that point where as a business owner, you've got options, you know, and then you've got the freedom to do the things that you wanna do. So I mean, congrat to what you've done, man. It's, it's, it's pretty cool. Right. Thanks guys.
(37:47): Are you still gonna get up at four 30 in the morning on vacation? You know what, I don't mind doing that. I think it's a good time in the morning. Good, good time of the day. I, I probably won't get up at four 30, maybe five o'clock , but, um, I'm in a half Ironman end of the year. So I've been training a fair bit with running and, and cycling and swimming and again, field the crew at work. We're all doing it together. So, you know, that's another way of, you know, getting outside of work hours and, and bonding and, and enjoying a different kind of challenge. So that's gonna be exciting to see if I can finish that race, but, but yeah, to answer your question, I'll probably have to get up and go for a run or, or whatever, when I'm overseas. just, so I'm not drinking too many beers, but yeah. So yeah, you're right, boys having the options is, is the secret.
(38:31): Um, and I think having the options with sales is another big thing to be successful, even at a million dollar turnover. If you've got more work than what you need, you can pick and choose. And then that becomes a healthy margin for the builder. Um, and for the first five or six years, I wasn't doing that. You know, I was just taking whatever, come into the door and, uh, and I was just building it to be the builder and to a degree that kind of work for me cause I kind of bought the market in the early days. And then now I can, I'm sort of charging a lot more these days, but I don't, I don't think it's a, a good business move if I had to do it again, I probably wouldn't do it, but that was my journey. And, and I, and I did it and got through it. So the tuition fees at job site university are pretty high aren't they? a hundred percent definitely.
(39:16): Yeah. well, listen, it's, it's, it's easy to see why you've built a, such, such a great team. You're a charismatic leader, you're humble. And you're willing to share what you've learned in a, in a confident and, and fun way. We have no doubt that you're gonna be at a hundred million soon. And it it's interesting because when people talk about scaling a business, they usually think about scaling it up only and you're looking at well, what happens if I need to scale back? Yeah. And you've already anticipated two years ahead that I, I may need to go sideways over, over to something else. So it sounds like you're doing a whole bunch of stuff. Right. And thanks sharing that, all the nuggets that you've shared today with, with everyone, it's, it's clearly working
(40:00): My pleasure boys. I like, um, telling my story and helping other builders out. If I can, even business owners, you know, every business is kind of the same in some, some kinda way. So, um, happy to share and, and yeah, I, everyone gets a bit of the lesson to learn outta this one. So if anybody wants to learn a little bit more about you, um, follow your work and they find you, Um, well we're on Instagram, just under LRO construction. So a L R O E construction of S also Facebook I'm on LinkedIn, under my personal name and also the business, um, our website. So yeah, if you wanna reach out, ask more questions, happy to help. Yeah. Like giving back. So I'm here for anyone that wants to have a chat. Well, we appreciate it, man. Thanks again for your time. Gonna definitely follow your journey. Probably get you back on next year for a follow up and we'll just maybe make you a regular,
Hey, thanks for listening, Duane. And I love hearing from you. Your stories are inspiring and your challenges can be overcome. Got a cool tip. I deal for a show problem that you haven't been able to solve, or maybe just struggling to figure out what you need next and where to get it. We can help hit us up@buildernuggets.com and start building freedom.
