Q & A Episode 35 - Lessons I Wish I Knew: 20+ Years of Building and Business
Episode #35 | Q&A with Mark D. Williams | Lessons I Wish I Knew: 20+ Years of Building and Business
What are the biggest lessons I’ve learned in 20+ years of building? In this Q+A episode, I dive into the importance of brand storytelling, pre-construction agreements, client qualification, and why understanding your cash flow is crucial. If you’re looking to grow your business, avoid costly mistakes, and streamline your process, this episode is for you.
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About The Curious Builder
The host of the Curious Builder Podcast is Mark D. Williams, the founder of Mark D. Williams Custom Homes Inc. They are an award-winning Twin Cities-based home builder, creating quality custom homes and remodels — one-of-a-kind dream homes of all styles and scopes. Whether you’re looking to reimagine your current space or start fresh with a new construction, we build homes that reflect how you live your everyday life.
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Mark D. Williams 00:04
Usually when you go against what you normally do, it's not great. They're picking you because you're professional. They're picking you because you're really good at your job. You know, it's not your first rodeo. They're coming to you because you're an expert in your field, and you will give them your time, your energy and your effort. That's worth something. Ian Mark,
Mark D. Williams 00:27
welcome to here's better Podcast. I'm Mark Williams. Your host. Today is Thursday for our Q and A and this will write in from Ka builders out of Ohio. Shout out to them. Their question is, what recent changes or lessons have you learned later on in your career that you wish you knew when you started? I've gotten to know Kevin and Abby a little bit over the last six months to a year or two, and they're great builders and remodelers, and that seems like a lot of Kevin's questions are, he's going places. He's really doing well with this thought process. And so I can see why he'd asked this question. I'm not sure I'm the expert on it, but I can certainly share some things that I've learned over 20 years, 20 plus years now, coming up on 21 which is kind of wild. I think the first thing I would say that I've learned is really understanding your brand. I speak a lot on the podcast about brand and storytelling, and I'm really excited about it. We had drew Riley on he's actually this week's podcast, auto slash creative. And if you're really interested all about brand, that is really a great one to dive in on. Also, in the past, I've done one with Sen and Sons Kimberly Sen maybe a year or two ago. You can back check that one as well, where we talk all about storytelling and brand as well. And so I think the reason I love brands so much is I think it's a different way to sell when you're building something, or you're creating something, or you're the owner of a company like sales is a big part of what we do. And I think most people, I'm not saying that you don't enjoy the sales process. I certainly enjoy the sales process. But there's sometimes, there's a part of it that we feel, you know, we're asking people to do something all the time, and people don't like most people, salesmen like to be sold, but most other people don't like to be sold. They like to buy things, but they don't like to be sold. And there's a bit of a negative connotation with that. And so where I'm going with brand, and why I think this is my number one answer is I think storytelling. Had I understood the power of storytelling early on. And I think here's the thing. I think you do storytelling, but you don't even know it. Early on in my career was 23 years old, little baby face. Now I've just got more white hair, but still a bit of a baby face. And it was my story was, hey, I'm a young entrepreneur. I was a two man band. It was myself an office manager. And you get the owner of the company. I will be on site every day. This is my only job. And that was a powerful story, that I want a lot of jobs in my career, selling myself. In fact, we always sell ourselves. I just sell it, maybe my team and I sell sort of our company vision and our brand differently. Now, 20 years later, but early on, it was really my number one sales strategy was, if you like me and if you like what we do, then we're going to be a good fit for you, because you're going to see me a lot. I used to always joke that if you don't like me, don't pick me as your builder, because you're going to see me a lot. And I still say that. And so much of building is understanding that who you're partnering with that you're going to spend a lot of time. It's a pretty serious relationship. It's not something to be taken lightly, and it's not only that it should be serious, but is this going to be enjoyable, like for the next if you're building a home, that's early on my career, we used to build a home in seven, eight months or six months. Now, most of the homes that we build are a year plus. And so really a big question is, and that's just the building, that doesn't even count the design. Are you going to enjoy the process? And so I think I used to talk about all the things that I did, hey, we use custom mill work. We use custom trim, or we have the best people, which is, I now spend most of my time just listening and asking questions. It's more about the client, and I'm not really trying to sell. I'm trying to listen, and I let my brand in our past work be the story. Now if they ask me a direct question, which actually doesn't happen, that it happens pretty rarely, where someone asks you, Why should I pick you? They're looking for the elevator pitch. They want you to talk about yourself. And I think it's not that I'm afraid of talking about myself. I certainly probably do it more than like any salesperson, we're always talking about ourself enough. It's just that when they ask you for it, then that's your license to talk. Otherwise, I find that question asking and really storytelling, describing the process, talking about hospitality. That's something I wish I would have been more aware of early on in my career. In the beginning, you're just hustling any ball that bounces down the street. You're chasing it. Or at least I did every person that called Not only did you call them back, which you still should do, but I met with every single person. Didn't matter if they were a good fit or a bad fit. I just wanted to meet. I just knew it was a numbers game if I could meet with every single people, and I don't know the analytics now, 20 years later, but if I can meet with 20 people, maybe I would have a second meeting with 10 of them. Of those 10, maybe three I would design for, and of those three, maybe two would be turn into remodel or build jobs or whatever the numbers were. So I was willing to meet with I had a lot of time. I was young, I was single, no family, and so it's just I had time and I had energy, and those were my two biggest weapons early on in my career. I think I'm trying to think of when I started using pre construction agreements. I probably started seven, eight years ago, 10 years ago, maybe, so maybe about 10 years into my career, and that's a game changer. And the reason, if you don't know what a pre construction agreement is, it's extremely valuable, and what it is, it really helps you understand if someone is wasting your time or if they're serious about building. And so I'll just walk through what my process is now. And I wish I had known this a long time ago. I'll do a 15 minute phone call. It doesn't matter what kind of client it is, if they say they're going to build a ten million house or a $5,000 house, it's a 15 minute phone call. Once you have the 15 minute phone call, you get to press stacks pretty quick. What's your time frame? What are you looking for? I ask them questions about interior designers and architects they might like or they might not even want one. Those are all really important, really early cues. It's helping me visualize in my head, what does this process look like for them? Is this a good alignment for my brand and for what I do? Because they've already picked up the phone, they've already reached out via Instagram or email or however they're finding us to say, hey, we're interested in your business, so they're already signaling to you that they're interested, so don't drop that. But early on that call, maybe they're not a good fit. And I've spoken about this recently, about referrals. I wish I had learned this tactic, regardless of that first 15 minute phone call goes well or not, ask for a referral, let's say they're not a good fit, and then you'd say, I appreciate your calls, or anyone else that you're interested. Or do you know anyone else that is also thinking about building or remodeling that might be a better fit based on our conversation. Maybe they give you a recommendation. Maybe they know they don't, but you've planted a seed, and even if you do, line up that meeting, ask them anyway. Say, I'm looking forward to meeting you next Thursday at one o'clock at our office. By the way, is there anyone else that is also interested in building because it's just a great way to to generate referrals. They're asking you, and they're already queued into your brand. Then once you meet, we do a one hour meeting at our office or at their home or their home site, and then after that, we're presenting them a pre construction agreement. And so this everyone's a little bit different, but essentially, if there's services we need to do, we need to do a survey. We have to charge for that. I can't chart, I can't do survey work for free. That's a couple grand, unless they already have a survey. Are they thinking about interviewing architects, or do they have one? Or do they need to do what's called an as built on a remodel house? Do I have to bring someone in to laser their house and get drawings of their existing floor plan? Are they looking into your designer? So I'll kind of like, I'll have all this on my pre construction agreement, and it ranges anywhere from not applicable, or a couple 1000 to 10,000 most of the architecture work that we're doing, we're not capturing that contract. That is a third party contract, but I am charging for my time to obviously interview these architects, with them and these interior designers. So based on that interaction, I will line up two or three architect meetings. Sometimes I know immediately, hey, this is the person. Or we might be in a development like at honey Hill, there's three architects that we've already aligned with, so it's going to be one of those three. We might early. They might say, hey, we lean a little bit more contemporary, a little more modern. So I might recommend two out of the three. Or they might say, You know what? We don't know. Great. We'll interview all three, and then they can decide who they want to work with, same with interior designers, once they get a feel for their personality, and I usually will keep that in my retainer as well. Is that something that they're going to sign a contract outside of us or Ian? Again, it depends if it's a remodel or our new home and the scope and size of it, but that's all clearly defined in my pre construction agreement, like what I'm doing, what another party, architect or interior designer might be doing. And then lastly, I just do a flat fee. Some people do hourly. I found it just simpler to do a flat fee. And I think you just each business has to decide how they value their time. And on a remodel, I'll make it a little bit less, if it's a little smaller, if it's a big remodel, it'll be the same cost as like a new home, because I know I'm going to be interviewing designers and architects and probably spending anywhere from three to six months working with these people before I actually have a contract where they're paying me a down payment. That pre construction agreement is really there to they're going to give you money right away, saying, Hey, we're interested in having you help us really put the team together. And the way I sell it is this is you, if you decide you want to choose somebody else. You can choose somebody else. I'm just here to sort of plan your trip. But at the end of it, when we're going to go to Africa on this analogy trip, if you want to go with somebody else, we'll have developed the plans. We'll have helped you develop a relationship with an architect and into your designers like those plans are yours. They're not mine. They have a license through the architect to use that plan. And I've heard before that, some builders, if they capture in house design that they'll actually hold the client hostage and say, Hey, if you go somewhere else, you don't get these plans. Honestly, I just don't think that's the right way to handle that. You want to make sure it's a good fit for both people. So I always explain that to the client upfront. And so the reason I wish I would have done that early on in my career is that would have prevented a lot of. Wasted time chasing balls down the street for clients that weren't going to pay you. And I have a brad Levitt always talks about this. He talked about one time he had in his contract that if you didn't pay him, he was going to charge X percent, or one of his builders was going to charge a crazy almost like a credit card fee. And their client was like, Wait a minute. Why? I don't want to pay that much. And the comment was, what are you planning on not paying me? Because if you're not going to pay me, to pay me, I guess I'd rather know now and save us all the headache so I don't have to worry about this later. And I think that's just a humorous way of looking at a pre construction agreement. If you're not willing to put a little money in to design this, then you're not a fit to build a new home with us, and that's okay. Ian,
Mark D. Williams 10:44
music. We're excited to announce that the curious builder collectives are going into three other states. For those not familiar with what the collective is, it lives between what the contractor coalition is and a builder 20 group. What we do in each state is we have a group of 25 to 30 builders that get in a room and you break up into groups of nine. You spend 45 minutes talking about a set topic, whether it's branding, marketing, contracts, whatever that set topic is for that day. And then you talk for 45 minutes. You get up, you mix up the groups, and you do it again, and you're out of there. You'll be out in under three hours. We're going to be going to Phoenix Arizona. Brad Levitt is going to be leading a curious collective in Phoenix, Arizona. We are going to San Antonio. We've got David and Angela Penske from Penske homes, leading a group down there. And we have Brad Robinson and Vince Longo in Atlanta, Georgia, also leading a collective as well as obviously me in Minnesota as well, for our second annual collective. So if you're interested in collaborating with other builders. If you really want to dive deep on your business in a person to person relationship, ask a lot of questions. The collectives are for you. We also have in Minnesota interior design collective as well as the architect collective. Check out the Events page at the cures builder podcast.com I think understanding that who you are, what your brand, what your story is, what you want to do. That pre qualifying is a huge, huge, huge asset that I can't stress, how helpful that has been in really helping you identify good clients. And sometimes you have to make judgment calls. Some clients, maybe it's a job you're chasing, or potentially an architect has a client and the plan is already designed. Sometimes it'd be nice to you put a lot of work into bids, and I think usually you should be paid to do the work on just bidding. People who just want you to bid, to bid, are wasting your time. That being said, every builder out there of Worth has obviously done bids at no cost, but it is a bit of an orange flag if you have a client saying, hey, I want you to bid at no cost, because I'm going to bid it against three other people. You might make a business decision and say you'll do it. You also might make another business decision and say, You know what, I want people that value our time, we value your time. We'd be happy to do this, and we'd love to work with you, but we are going to charge you for putting this bid together, because we're going to give you a very thoughtful, very thorough bit. And if that's what you're looking for, then that's going to cost our team time and money to do it. And I think the client would a client that you want to work with, or at least the client that I would want to work with would respect that answer. And so there's always going to be a decision or a fork in the road on how you handle each one of these. And I've handled all of them right way, wrong way. Even now, there's times where you'd say, You know what I don't want to write in this contract. Actually, was Nick schifr at the contractor coalition that kind of brought this up to me. We used to always take our pre construction agreement and credit it to the future job. And Nick's comment was, Well, no wonder everyone signs that you're basically doing your work for free. And I never really thought about it that way, and that was about three years ago. So now we have in our contract that you're paying us to put all this together. But this is separate work than building the house like this is assembling the team. This is all the interviews. And every builder handles this differently, and that's their choice. Some builders look at as a loss leader, like that. They feel like by doing this for free, they're ingratiating themselves to the client as a bit of a PR move, or at least that's how they spin it. And I'm not saying it's right or wrong. That's their choice. I've done it both ways. I still do it both ways more often than not. I do make sure that they understand that this fee is not going to go towards their future build. And really, they're usually fine with it, and if they're not fine with it, you have to decide, as a business owner, is this something that you want to pursue? Maybe you're really light and you need the work, and you're like, you know what? I'm gonna have to put that, that thought process aside, and I'm gonna have to do it because I need it. Usually, when you go against your notice your normal modus operandi, your normal way of doing things, it usually doesn't work out well. And usually, when you go against what you normally do, it's not great. They're picking you because you're professional. They're picking you because you're really good at your job, so not your first rodeo. They're coming to you because you're an expert in your field, and you will give them your time, your energy and your effort. That's worth something. I don't think it'd be fair to ask an architect to design a house for a client and say, if we like it, when you're done, we'll pay. You that's just not how it's done, and I think it would speak more about the client than the architect. Now, obviously there are situations where you're doing maybe a spec home collaboration, and you get paid down the road and but that's a totally different situation if you're working for a client. I think in the past, I used to always do a little work for free on the front end, thinking that would be, you know, helpful. Sometimes, when you get into the build, we've had it, nobody likes soil corrections, and you can't really tell what's in the soil. And inevitably, the clients, like, man, the first day they break ground, they dig dirt, and sure, shoot. And you got bad soil. And it can be a huge range on price. So I won't even go there. And I've had it before where I thought, You know what this is, the first thing with the client. You know what? We'll help, we'll split the cost, or we'll we'll waive our GC fee. I don't think I'll do that again. I have had it. You're setting the precedent that this house is your house. That's not true. You're building the house for the client. This is their home. You're helping them build it. You'll do your best job, but to for the first you're training the client that every time you have a difficult issue, that is your problem, not their problem, and we're here to help solve the problems. But this is their house. Yes, the home builder, you're not going to live in their home. They're living in their home. When they sell their home, do you do they give you? Let's say they make most of my clients end up making money when they build a home. Do they say, Thank you for building us a great house. We made $400,000 on our house. Hey, we're going to write you a check for 25,000 because we couldn't have done that. I've never heard of anybody doing that. Be a wild idea like it, actually. But then so then on the Contra, why are you taking the risk? Why are you, as the builder, financing their house. The other thing to know is, early on in my career, we used to do mostly closed bid contracts and fixed bid contract. You know you as the homeowner, or, sorry, you as the builder, are taking that risk. That's a little bit different scenario. Now, in that case, you are taking the risk so on the soil conditions, that's on you as the builder, but in a Cost Plus model, like they are saying that they're willing to take the risk because they're going eyes open to it. So you got two different models here. But I think going back to the banking thing is understanding that if they're asking you for your money to finance their house, that's not right. Again, you're not a bank, or if you are a bank, you better be charging for it. We had years ago, someone asked us, Hey, we're 100,000 short of our down payment. Would you float us 100,000
Mark D. Williams 17:24
and I didn't do it at the time, but if I was to go back in time and I had the money, I'd say, yes, but we're going to charge you 10% and someone might say, in today's market, let's say your mortgage is at seven and a half, or whatever, or 8% Why are you charging me 2% more? Obviously, I'm going to have to charge you more, because if you could get it at a bank, like you would have already gotten it for a bank, there's a reason you can't get it. So I need to make more on that you're operating as a bank now, if they're going to treat you like a bank, then you need to act like a bank, because no bank is going to loan, you know, a million dollars to build a house and then not charge you any interest. That's crazy. And so I think really early on in a career, understanding your numbers, understanding cash flow. I think it's been an ongoing process. I have had some really good people in my career that I've worked with that helped me manage cash flow and overhead, and I've had a few that weren't so great. And so I think really making sure that you're really paying attention to cash flow right now, I'm really excited. My controller is very gifted with money calculation and forecasting, and we actually ran out for the next 14 months, like cash projections against our overhead, so we could clearly see what kind of sales we need, where your fixed, hard costs are. And just, I like to see things in a graph, and so he's, it's great. Now every month I sit down and I can see that graph of like, where's the gas going to run out and what's what kind of runway do I have to get more sales. And so I feel like having regular monthly metrics to check in on, to see where your cash flow is at is just paramount for any company. But I feel like early on in career, you're learning so much so fast. But I think that's a really important one. I think the value of networking was something I always loved people, and I really always enjoyed my trade partners and going on the job site and working with them. You know, I used to put in my own drain tile, and I used to sweep my houses, and so I spent a lot of time on the job sites with my plumbers and with my electricians. And I think earlier now, I spend a lot of time networking, and it's not your peers aren't likely going to have you build them a home. So it's different kind of it's mainly leveraging your relationships with brands and with knowledge and understanding that there's people you can reach out to and help. I think I know at least when I started, I was 23 I've said this before on the podcast. I wish I would have bought a company, the idea that I had to start a company from scratch, that's a heavy lift, and it's not for the faint of heart. I'm not saying don't do it. It's very invigorating, and it's a lot of it's great. I love it, but I think there are a lot of businesses out there that you could buy it. So that might be something to look at when you're first starting a business, or thinking about starting a business, is maybe. Really good at sales, but not good at systems. Or maybe you're really good at systems, but you're not great at sales. No one is good at everything. You're gonna need a team approach at some point. And I think even scaling early on in my career, I think I viewed people incorrectly. I think I viewed people more people as more problems, when, in reality, every time I've hired someone like my stress has gone down. I mean, when obviously a good hire, which has been 90% of the time, I've been very fortunate that way, and I think when you hire good people, you're able to do more, you're able to provide better customer service, you're able to provide your trade partners with answers quicker. You're able to build a better home because you're empowering your people, and you're also able to leverage your people's knowledge and networks. I'm actually kind of excited about scaling now, where in the last 20 years, I've had zero interest in scaling, and again, it's all been my viewpoint has been off. And I had a project manager one time that told me that, it said, until you figure out if you want to be small or whether you want to scale, but you're going to flounder. And he was right. And so I think understanding what you want, having a clear vision of where you want to go, is super helpful. And I'm not saying your vision doesn't change, but it becomes really, really helpful. I think the one of the big aspects of the value of networking is just having community involvement, just with the podcast in general. But even if you're don't have a podcast, being just a builder that attends networking events, industry events, working with architects and designers and trade partners, it's really just going to open yourself up to a lot of opportunities. And I feel like we're in a world where networking has probably never been easier with social media, Instagram and LinkedIn and YouTube and your website. And now, since COVID, there's been a huge hunger for in person events, because for so long, people then go to in person events, and then COVID, COVID Locked everyone up for a couple years. And I think we're still seeing that people are excited to get together and collaborate. And then I think lastly is, I've always been a very curious person in terms of reading, and I always really talk to other people. But the last four or five years, podcasts and audiobooks have just exploded, not only for me personally, but just seems like everywhere you look, there's a new one being launched, and it's a massive market, but I think continuing education and right now, I'm usually reading a book. I'm listening to several books, listening to podcasts, so I'm absorbing an incredible amount of information that it's hard to know, what are the ideas that end up making their way into your business, but by continuing to feast on high quality ideas, they're going to make their way into your habits and in your lifestyle. And I think if I had done that earlier in my career, that would have been really helpful. I just did not prioritize it enough. And so part of that could be an age thing. I think as you have a family and have kids, you really prioritize things differently. And I think that's been really helpful. Actually, while there's probably less time to go around, I'm much more focused with it. So maybe it ends up evening out. I just I've mentioned this 1000 times, but I'll mention it again. My favorite quote last year was, boundaries create freedom. We're having a family, having children. Those are good boundaries, having those, but it's made me a better person, a better business owner, a better creator. And so it makes me able to relate to my homeowners better. And so it's made me a business better business owner. And so I think by just opening using your authentic self and your lifestyle to inform your business is super, super critical to your growth. And I think maybe the last thing is have some forgiveness and patience with yourself. Rome wasn't built in the day, and as you're building your business, even now, there's so many things that I look back, I'm like, wow, I should be so much farther after 20 years than I am now, but I think have some grace with yourself and understand that everyone's journey is different. I think it's a mistake to look at people. I know lots of people. They've been business for eight or nine years, and they're 10x bigger than I am in terms of 20x that's not the point. The point is like their journey and your journeys are different, and we can gain a lot of information from each other. And I think the other thing too, is like, what is not always what you get. Unless you really ask questions and know people, it's hard to really know, what is it a work life balance? What is their just? What is their balance period? And is it like what you're doing? Is it enjoyable? And so anyway, these are just a few lessons that I've learned that I would have loved to have known when I first started. So hopefully some of these ideas were helpful. You can tune you can tune again on Mondays for our regular one hour episodes, as well as Thursdays for our 20 minutes Q A if you have a question, please head to the website, fill out our contact page, our newsletter, or send us a DM on Instagram, or however you want to reach us, and we'd be happy to address your questions. Thanks again for tuning in to the curse builder podcast, thanks for tuning in to curious builder podcast. If you liked this episode, do us a favor. Share it with three other business owners. The best way that we can spread what we're doing is by word of mouth, and with your help, we can continue to help other curious builders expand their business. Please share it with your friends. Like and review online at. And thanks again for tuning in.
