A Vision Beyond the Tools | Wes Crocket with Mahogany Builders

Meet Wes Crocket, owner of Mahogany Builders located in Chicago, Illinois. Wes shares his journey from studying organizational psychology in grad school to leading a respected remodeling business in one of the country’s most competitive markets. Inspired by his father's leadership and driven by a desire to build a strong team culture, Wes opens up about his path into construction, the founding of Mahogany Builders, and the lessons he’s learned along the way. Dives into what it takes to lead with purpose and build a lasting business.

 

 

In this episode, you will learn:

• How non-traditional paths can lead to construction
• Why team culture drives success
• Adapting during uncertain times
• Having a vision beyond the tools

 

Learn more about Mahogany Builder here: https://www.mahoganybuilders.com/

 

 

Own a construction company and want to share your story? Apply to be on an upcoming episode of Builder Stories at https://www.builderstories.com

Episode Transcript

(00:00):
[upbeat music] Welcome to the podcast where wetake a deep dive into the stories behind construction
business leaders. We will share how they gotstarted, how they found success, and the
lessons learned along the way. I'm your host, EricFortenberry.
Welcome to Builder Stories. [music ends]
Welcome back, everybody. Today, I am excited to behere with Wes Crocket.

(00:22):
He is the owner of Mahogany Builders located inChicago, Illinois.
I'm very excited to have you on the show today.Welcome to Builder Stories, Wes.
Thanks so much, Eric. Appreciate it. Thanks forthe opportunity to share my story.
Yeah. So why don't you give us, uh, a little bit-a little bit of background, who you are, how you got into
construction, and, uh, what's- what's Mahogany do?
Yeah. Absolutely. Happy to. So, um,
about 15 or so years ago, around, uh, around 2011,I was in grad

(00:46):
school, uh, studying organizational psychology.
I always just wanted to run a business and run ateam just like my dad used
to. He was the best leader that I ever knew.
And to see people, the way they revered him, theway they followed him was something that I
always wanted to- to do. I wanted to be that guy,just like my dad was.
And I didn't really care about what industry thatI actually went into as long as I could run

(01:10):
a team and go towards a goal. And so, I studiedorganizational psychology, which is kind of a weird
thing that not a lot of people have- have heardabout.
And I- I got a master's in this subject, and it's-it's sort of the- the study of people at
work and how to put the right people in the rightpositions to get the most out of them, uh, designing
selection tests and understanding what makes a g-a good fit for a role within a company.

(01:32):
And so, I was at the tail end of my- my master'sin 2011 when my wife, who
was in inti- in interior design school at the timewas working as a
nanny for the owner of a remodeling company andneeded to do an internship for them.
So she started working, uh, as an intern for thisremodeling company.
Uh,
he, the owner of the company, was kind of like alot of

(01:55):
owner-operators out there, uh, who was
hitting a limit of- of his effectiveness as anowner-operator.
You sort of hit a limit where you go, "Okay, I- Ican only do so much," and- and, uh,
needed to be able to do more if he was gonna growthe company.
And he had an office manager exit at the time andneeded some extra help.
And so, I kinda raised my hand and said, "Hey,I'll- I'll come in and do some office management stuff for

(02:19):
you." And that was 2011, and the story reallygrew- grew from there.
I started working for Mahogany while I was, whileI was still in school, and I've never really gone to work
anywhere else. So like I said, when I got toMahogany Builders, the owner, uh, Matt
Lederer, was, you know, wearing every single hatin the business, like so many owner-operators do, right?
Running- running projects during the day, doingestimates at night, doing all of his accounting and

(02:42):
stuff. And- and at night, we were at the timeusing a combination of QuickBooks
Desktop and Excel to do everything that we did.
In 2011, the- the construction software landscapewas,
uh, barren, like a desert, right? Um, very fewthings out there for actual remodelers.
And so,
I came in and sort of took over the accounting,and I took over the- the, um,

(03:05):
you know, uh- uh, the sort of human resources partof it and decided like, "Hey, we're gonna expand.
We're gonna take sales off of your plate, too."And so, we hired a salesperson, and we went from
doing, uh, about $700,000 or $800,000 in- inbusiness around 2011
to- to,
we, in three years, between then and 2015, morethan doubled our business.
We started doing about two and a half milliondollars after just sort of splitting off and hiring a- a

(03:29):
salesperson to just focus on those things, um, uh,full time.
And at that time, we sort of went upmarket alittle bit.
You know, didn't do as many sort of, uh, uh,lower-end remodels and
small, and started doing, uh, higher-end remodels.
Hired a designer then because we- we needed thatinternal capacity,
uh, and, uh, and found ourselves being sort of adesign-build company.

(03:53):
And
it was around 2014, 2015 in that area is that Mattand
I, uh, looking for software packages that- thatmight work for us.
Um, didn't find anything that was out there, andhim...
He has a background in software, uh, uh, projectmanagement, and I, um, uh, it's just
something I guess that you could say I do as ahobby.

(04:13):
I'm just really into- into technology and softwaresolutions to things.
Him and I decided to
make our own system. So in- in 2015, we spent
six-plus months designing the front end of aconstruction management software
platform that we're... Our company's calledMahogany Builders.
We lovingly called it the MB5000 sorta jokingly.

(04:33):
[laughs]
And, uh, you know, we- we- we, uh, it's a databasein- in the end, right?
And so, uh, we, you know, him and I understooddatabase management, so we made a couple of modules for
timekeeping, a couple modules all based on sort ofa contact structure, right?
Uh, and then we hired a software developer to doeverything that we designed, every module we designed,
every screen, every output that we designed, had aguy do it for us, and spent

(04:58):
an arm and a leg, right, uh, doing it 'causesoftware developers are- are expensive.
But, uh, what we had after a year was a systemthat we could, that run our business on.
It was awesome. From about 2020, 2015, 2016, toabout
2018, '19,
it did everything for us, all of our estimatesand- and- and, uh, timekeeping and all that stuff.
And- and we sort of had dreams and aspirations ofbecoming like JobTred

(05:22):
one day. We were like, "Oh, this is awesome.
If- if we do it this way, everyone will love it."I mean, the truth is,
super rudimentary software,
uh, j- only applicable to- to our own businesscase and not the many business cases that- that
are out there, right? Sort of based for a tinymaterials company like we were at the time.
And we sorta hit the limits of that system.

(05:42):
As we grew as a company, we sort of grew out of itand just had to- to make a decision in, like,
2018, 2019 of, like, "Are we gonna go spendanother $50,000,
$75,000 paying a software developer to go
make this bigger into- into what we actually have?Or are we gonna go..."...
try and, uh, uh, and, and go with one of the nowmore available

(06:05):
software, uh, packages out there. And so wedecided to,
uh, abandon and, uh, our, our lovingly builtsystem, and try
out, um, another, uh, large, uh, constructionsoftware, uh,
management sort of platform, of which, uh, uh,
with which you are quite familiar. Did it forabout six months, decided that

(06:27):
wasn't, it wasn't really for us, uh, and, and wentback to
using the combination of... Now, this is whenQuickBooks Desktop stopped being supported on
Macs, and we had to now move from QuickBooksDesktop to online, was not gonna happen, and we
started using, uh, Zero for all of our accounting.
And I built from 2019 to about 2022, 2023

(06:48):
a great,
uh, ecosystem of different softwares, using Floatfor our scheduling, using Zero
for our project management software, using, uh,Gusto for payroll, things like that that all sorta
integrated to- together. But it was in the end apatchwork of systems.
And, uh, ended up, uh, uh,
finding JobTred when we were at a, uh, conferencein 2023.

(07:13):
I, I think it was the 40 Under 40 con... Some...
It was, it was one of those, those, uh, bigconferences, and I mean, the rest was history for us.
We really took off once, once we, once we learnedabout and once we really started, uh, getting
into JobTred software. It helped us be way, way,way more organized and
focused on, on GP than we've ever been able to dobefore.

(07:34):
And so, you know, it really... It, it allowed usto do even more.
So over that time, we
went from being about a $2.5 million business towe're doing about 3.5,
3.6 right now. We expanded our team over that timefrom, you know, just a project
manager, a designer and, and a salesperson, tohaving a
four-person sales team. We've got a designdepartment of two designers now.

(07:55):
We've got a production department with 10, uh, uh,10 on our...
Uh, 10 crewmen, c- carpenters or internal laborfor us, a project manager, a
production manager, and so we've...
You know, this thing has just sorta steadily builtand built and built over time.
And
in the middle of that somewhere, Matt, uh, who,who is a, a, a bit older than

(08:16):
me. Uh, he's a Gen X-er. I'm, I'm a Millennial, sohe's not that much, but he, uh, decided that he
wanted to ride off into the sunset at some point,like a lot of owners do.
Uh, and, uh, him and I put together a, a sort of atransition package that we're in
the middle of right now. Uh, and,
you know, uh, it's,
it's a wonder- one- wonderful business that hasbeen the pride of my entire

(08:40):
life to build. And, and the people in my companyare absolutely
wonderful, and I, I, I truly enjoy the businessthat I, that I run.
If I won the lottery tomorrow, there is no shot Iwould do anything different.
I would wake up and do the exact same thing I doevery day.
So,
um, sorry for that long soliloquy, but that's sortof-
No. [laughs]
... our entire story and it, and it, you know,really is, like, software-focused.

(09:02):
This has been my entire sort of story, really.
Yeah, that's, that's so awesome. It's funny,'cause right before we, uh, we g- we started recording here,
you were just like, "Man, like, I feel like youand I, uh, you know, on, on paper we should, uh..." You know,
you're just such a similar story, we'd be bestfriends.
Mm-hmm.
And I mean, man, yeah. Just, j- just hearing youtell that, I mean, that's, that's literally the same kind of
situation. I mean, I didn't, you know, take overand kinda work my way up entirely, you know, from, from the

(09:25):
ground up, and, and I wasn't with the constructioncompany that I took over just for a year where I built out
the first version of this. But, like, man, I,that's, it's awesome that, you know, you, you literally have
been able to, you know, to, to grow with thisthing and really make a very meaningful impact.
But you've risen up from the very bottom and, andnow are, you know, taking over and gonna, you know,
just o- own the whole thing. That's super cool,man. Congrats.

(09:47):
Yeah. Th- thank you, I appreciate it.
It's been, it's been kind of a, a long and weirdjourney that if you asked me 15 years ago if I would've ever
been a remodeler, like, what? What are you, whatare you talking about?
But now, uh, you know, I think it was ScottGalloway that said, like, i- if... You, you don't...
Not every, like, kid, I'm paraphrasing, like,needs to grow up and be the astronaut they thought they were
gonna be. Like, sometimes, go
find something, go get good at, and the passionwill follow.

(10:09):
And, and that is-
Yeah
... absolutely what's happened for me.
I, I am deeply passionate about remodeling and,and especially, like, a- about the
Chicago market and sort of our place in the marketand what defines our customer and, and re-
and really drilling down on that so, so we canprovide the best service to the people that we are best
matched for as a company. Like, that stuff reallyexcites me, and I've, I've been lucky this

(10:31):
entire time to
be able to focus on that part of the businesswhile I have a great partner who
is, who, who is sort of the face of our company,who is, uh, out there doing a lot of sales
for us, while I can work on these sort of backendsystems and processes that, that-
Yeah
... m- that grow a company up. You know what Imean? That, that give us bigger clothes to be able to grow into.

(10:52):
And we've consistently done that over manydifferent iterations.
I, I've used the example like a spider sort ofmolting into new-
[laughs]
... skin. Uh, like, and just b- uh, growing andgrowing.
It's been a wonderful journey to be able to dothat with, with a partner who is sort of the, the
yin to my yang, right? He, he... You know, his,his weaknesses are my strengths and my
weaknesses are his strengths. And it's been a, a,a wonderful symbiotic relationship that there's

(11:16):
no way that we would have been able to grow to thesize, level,
stature, reputation that we are right now as acompany without both of those two sort of unique
skillsets. So, um, you know, it's an ongoingchallenge of, like, what, what I'm
gonna do when, when Matt is no longer there andsort of continues his ride off into the
sunset, which he's, uh, doing right now. But, youknow, it's an open, open question.

(11:40):
I've got... Joined Remodelers Advantage.
That was a huge thing for me as a business,probably around 2016, when him and I first started those
discussions. Um, I discovered them at aconference, like all good things that I seem to find
in, in remodeling. And joined a group of, ofremodelers that,
um, you know, you work through different groups inRemodelers Advantage, but I've, I've been in a group

(12:01):
called, uh, Dorado now for five or six years.
They're, uh, a tremendous group of 10 otherremodelers from across the country that have
really stayed together in this group, where a lotof groups ha- maybe have a bit more transience,
uh, um, i- in. But [laughs] you wanna talk aboutimposter syndrome, man, I've got
guys like Jeff Titus who was the, the Impact Awardwinner, um, for, for Remodelers

(12:24):
Advantage last year in our group. You've got guyslike John Ford in there who, no matter how successful you
feel like you are as, as a business owner, youlook at guys like that and they're just like, "You're on a
different level, man." It's something that, youknow, you continually strive for.
You know, you put yourself in positions aroundpeople who do things better than you do or, to, to
strive to, and you end up rising i- uh, uh, aswell.

(12:46):
And that's so true for me. I don't know where Iwould have...
W- where I'd be right now if I didn't have thatgroup of people.
Uh, and shout out to Doug Howard too, who's been,like, a perennial leader of our group, who I know you know.
Doug's absolutely fantastic.
Yep.
So
yeah, Remodelers Advantage was transformative toour, uh, to, to our company, for sure.
Uh, that's awesome. I mean, again, it, it, itsounds like you've been making all the right moves from, you

(13:09):
know, from, from early on. And, you know,obviously, the, the, the, the leadership that, that you've, you
know, brought to the company has been tremendous.
And, you know, I think at the end of the day, youknow, it, it, it is, it's all about assembling the right team,
getting the right people on the bus, right peoplein the right roles, and then you can figure out, you know,
how and where to drive that bus together. And so,you know, it, it, it sounds like, you know...

(13:29):
A- a- and I'm a real big proponent of like, "Look,you know, find a partner, find somebody who will
also have that same, you know, level of skin inthe game." You know, at the end of the day, it's, it's somebody
to sort of, you know, share the, the, the, theburdens that, you know, that, that come with, you know, owning
a business and managing it. And, you know, at theend of the day, the buck stops with you, but having that
partner, somebody who, you know, again, you guyscan divide and conquer, get everybody who's focused and

(13:52):
passionate about doing their role in that rightseat, and, and that's, that's how you build a great
business.
Totally agree. So, I mean, uh, I know this isabout Builder Stories, but do you have the same thing at, at Job
Tread? Do you have people you feel like you relyon in that way?
Oh, yeah, absolutely. I mean, it's, it's, it's,it's my core team.
It's, it's the people that, you know, at the endof the day, you know, we...
Our, our, our goal is to keep the organization asflat as possible, you know, but, you know, at the end of the

(14:13):
day, like, each kind of team, you know, they,they, they do.
They, they have their leaders, they, you know,but, but hopefully, you know, we, we want to bring people on
that, that everyone, you know, feels ownership.
They feel like they're, you know, responsible for,for their own role, their own responsibility.
They're passionate about it. You know, they'regonna do whatever it takes, they're gonna work well,
collaborate with others. But like, it's all aboutassembling that team of people so that, you know, you as,

(14:35):
as, as the, as the head honcho, you're not havingto like, you know, again, play firefighter every single
day. You've got the people in place that you cantrust to deal with those, you know, complex
situations, those challenges that come up.
You know, obviously that doesn't mean you're notgonna get involved and, and help out and, and, and play
that same, you know, part that you need, but like,you know, it's great when you can trust those people
around you.

(14:55):
I feel like I learned a long time ago that there'snothing that I, I can per...
You know, you hit a limit as an owner-operator andI hit a limit as an owner too, that there's only so much that
you, you can do and be effective at at one time.
And so, you have to take that leap, find goodpeople, trust those
people, get out of their way, and let them dotheir jobs.
You know, I think that that's, that was reallyimportant.

(15:18):
You know, and, and respecting, uh, the opinions ofthose people who are
maybe lowest on the, on, on the totem pole or, orin the front line of your company.
My dad always told... He, he was a, uh, regional,senior regional manager for Men's Warehouse
when I was a kid, and
managed hundreds and hundreds of people, and wouldtell me that every time he would go to a new

(15:39):
Men's Warehouse store to figure out, you know,what's going on here, w- he would always go to the
tailors in the back of the shop first.
And that was, that was a lesson that stuck with memy entire life, that
the people who are really at the front lines,maybe somewhere in the background, I guess, like a tailor
is in, in a sewing shop in the back of a Men'sWarehouse, those would be the first people he would go to say,

(16:00):
"Hey, how are things going here? What, what needsto be improved upon?" And so,
that's a lesson that I, that I've taken with meand sort of applied to my own management style.
And, and so th- the opinions of the way that thoseguys who are in the
front line in our company, uh, what they thinkshould change, how they think things are going is
so important to, to me as a manager. And, uh, youknow, to, to your great point, a minute ago, like,

(16:24):
when you have something good, something nice, uh,you take care of it.
And so, it's been so important for us to put insystems and, and processes that make sure that
those people in the front line feel heard,respected, and, and
that this is a place that we, you know, we want tobe the employer of choice.
We want, we want there to be no reason why anybodywould want to work anywhere else once you work with

(16:47):
Mahogany Builders. And that goes, that goes bothways, right?
I want to both make sure that, that, that, uh, weare providing a great
environment for them to be in, but that thiscompany fits their story of
their life in such a way that, that they canprogress to a, to a level that, that
gets to, that helps them realize those goals thatthey have for themselves in their life.

(17:09):
So, I mean, just continuing to, to, uh, be anemployer that
keeps employees around and keeps them, y- youknow, uh, it's really, really
expensive to, to, uh, i- if you're a revolvingdoor to try and retrain, and we're very lucky that
we don't have that at Mahogany Builders.
Yeah.
When you have something nice, you take care of it.And so, that's...
I, I like the people [laughs] who work for usvery, very much here.

(17:31):
So, we try and do everything we can to make this,like I said, be the employer of choice in our market.
That's, that's awesome, man. You know, I, I... We,we've got a saying here that, that I, that I really love.
It's, May the best idea always win. You know?
And, and, and, and the goal is, you know, again,i- i- when you hire great people, you know, hopefully, they
are, you know,
s- have the skillset, have a trait, have somethingwhere, you know, again, they are the best at that.

(17:53):
That's why you put them in that role. They'rebetter than you, like, you know-
Mm-hmm. Oh, yeah
... and you need everybody to feel comfortablespeaking up and like, "Hey, this is why you're here." Like,
"We want, you know, your thoughts, your advice,your guidance." Like, "Tell us what's working, what's not
working, what ideas." You know, like, hopefully,they, they take ownership in trying to solve
problems. And, you know, again, at the end of theday, whenever someone comes up with an idea that is like,

(18:14):
you know, gets that support and gets the backingof like, "Yeah, let's go do that," like, they, they want to
implement it even more because, you know, they,they came up with it.
Right.
And it's like, you know, so many times, you know,people feel scared to speak up, you know, because it's
like, "Oh, well, I'm not in charge," or, "I'm notthe boss," or they're gonna think bad or they're not gonna
like it. It's like, "Look, at the end of the day,who cares who came up with it?
Let's, let's, let's debate the, the merit of e-each and every idea." Like, where it came from really

(18:36):
doesn't matter. The, the question is, is that theright idea? Is that the best idea?
And let's move forward with it.
Totally agree. That jogs two things loose in myhead when you said that.
One is that like,
I've probably interacted with......
at least two dozen people from, from JobTreadthrough my own interactions with you, through
customer support, uh, through my success managerbut then at, at Connect, and I gotta say that

(18:58):
everyone there seems to well-bought into themission
there. And that they, everyone has like, this sortof intangible passion in
here about the product itself. The, the webinar I,I was in yesterday,
um, uh, tha- that had to do with to-dos, th- theguy who was putting it on,
God, I forget his name right now, he wasabsolutely fabulous and the passion that he

(19:22):
exuded for your product when you weren't lookingto, you know, to
for lack of a better term, that's all you can askof, of people, right, to, to
carry that passion with them into, into thoseinteractions where you are not
actually gonna be observing them or, or directlymanaging them, right?
Um, and, eh, you know, uh,

(19:44):
and we have, uh, a... You should, you know, theother thing that had jogged loose in my
head is that you don't, as the leader of yourcompany, need to be the
number one expert top of the, uh, f- food chainof, of
every process that you have. Like, I, I have aproject manager who works for my

(20:04):
company who has forgotten more about remodelingthan I will ever know in my life.
A guy who came to us 15 years ago after alreadyrunning his own remodeling company
for,
you know, 20 years at, at that point, right? Theguy, he, he, he knows more than I ever will.
So when it comes to production,
he's the king. I, I, I defer to him in almostevery situation out

(20:26):
there and if you don't have somebody on your teamthat you look at like that, and you go, "That guys knows more
than I do about the things," and you're, youprobably should have one of those, right?
The, my dad used to say, "The smartest personsurrounds himself with those smarter than he." Right?
I feel like that's also been key to this, thateveryone in a leadership position in my company can do
their job whether it's design or sales, uh, or, orproject management better than I could

(20:50):
and, and, and if you don't respect that, then, uh,you know, it's, it's definitely a lesson to be learned
there.
Yeah. Absolutely. You know, and I, and I think,you know, as, as, as leaders, again, our, our, our job isn't
necessarily to solve every single problem.
You know, our, our job is to continually, youknow, motivate and inspire and, and make sure that
everyone's bought into, into the mission, thevision, the core values.

(21:10):
Like, it's about being that leader that, you know,attracts other people who want to join the
winning team and want, you know, and share thatlevel of passion.
Like, I, I, I really, I genuinely believe like,you can't pay people any amount of money to, to, to
just be passionate and to care. Like, they have tohave that from within.
Like, that's gotta be, you know, that, that firein their belly. Like, they either have it or they don't.

(21:31):
You know? And that- and that's like, that's one ofthe things that we're looking for, you know, in an
interview. I mean, and I believe you can just feelit.
It's like the energy of someone, like, y- y- youjust feel that being around them.
Are they excited? Are they passionate?
Like, will they, you know, represent your brandand your company when you're not around?
Just like you said.
Yeah. Well, it's within, within a few questions ofan interview and listening to how someone
comports themself and the energy w- with whichthey bring and, and speak and the passion that you can hear in

(21:56):
their voice, y- you can almost tell within thefirst few minutes of an interview with someone whether they
have that. And that's, that's such an intangibleand it's difficult for me to like, ab- uh, you know,
uh, objectively compare one person to the other ifyou're in an interview process.
Yeah.
But, but you as a hiring manager
kinda just know in your soul when, when you meetsomebody who has that. You know?

(22:16):
I'm reading right now and I, uh, I bet you havetoo, a great book called The 21, uh, Irrefutable
Laws of Leadership by John Maxwell. And it's what,I mean, if you haven't, you just said three
chapters of it in, in, in your last, in your laststatement.
I mean, it, leaders are, are constantly looking tofind
great people. You're, you're constantly, you, you,you know in your soul what

(22:37):
those qualities are, those, those intangiblequalities that you look for in someone.
For me, it's like, it's, it's, it's loyalty, it'senergy, it's
attitude. Oh God, attitude is just so important asit, as it's so, it, it just
dictates the way you, you, eh, every situationthat you, that you have and, and the way
you tackle it. Right? Everyone has thoseintangibles that they look for in people and, and always being on

(23:00):
the lookout for people who meet those values'cause it's, it's rare that you find someone.
And I've got at least two examples in my companyof people who I have
met in my sort of networking activities out in theworld who,
um,
I looked at and said, "I, I don't know where youfit, but your values fit for this

(23:21):
company." And that happens so infrequently to findsomebody who has those same values that,
eh, you know, I, I decided to plug both of thosepeople and who are still long term
employees, successful employees of, of our companyright now.
So if you're somebody who is looking at somebodywho is in a job adjacent to, to yours
but, uh, you think might be a good fit because oftheir values, I, I'm here to tell you like,

(23:44):
take that, take that leap. If you find someone whotruly looks at the world like you do, um, that's,
you know, uh, it, it's been really key to oursuccess as a business, is finding those good
people and plugging them in where you see fit.
Um, you know, but beyond that, like the, and the21 laws, like, you, you know, you sort of touched on
people,
uh, follow people who they, they see as beingbetter leaders

(24:08):
than themselves as well, and I think that's also areally important, uh, i- important point.
But managing the m- the, the timing, those sort ofintangibles
around, um, momentum, i- as well, like, eh, th-those
have... It's a great book. If you haven't read itor if you're a listener right now, if you haven't read that
book, that one is a one, uh, to, to pick up rightnow.

(24:30):
And that's the, The 21 Laws of IrrefutableLeadership?
Meh, I, uh, the 21 Irrefutable Laws of Leadership.
I've got-
Okay
... a, um, a one of my production managers mainlyspeaks Polish and I wanted
to take this leadership journey with him as hejust got promoted to a position where he's
in charge of people for, for the first time and Isaid, "Let's do this together." So I found they have Polish

(24:51):
language copies, they have, they have, uh, uh, youknow, uh......
the Spanish language copies of it, so if you...
You know, I- I highly suggest you and your teamreading a book like that together.
And we've- we've gone through and digested the-the- the chapters, sort of like a book club, right?
And talked about what works and what doesn't work,what might work on our team.
Um, and it has made both of us better leaders andmore attentive leaders.

(25:14):
And it has, it's been one of those things on mymind lately, that it has me evaluating everyone I see around me
who is in- in a leadership role and how they sortof,
uh, command the- the room and- and how they leadtheir teams.
And- and there's, you know, really a hugedifference between somebody who is a manager and
someone who is a leader, right? Um, there's agreat metaphor in the book about- about, um,

(25:36):
uh, managers
can steer the ship. They- they- they can be at thehelm of the ship and they can steer it, but only a leader
can be the person who charts the course of wherethat ship is actually going to go.
And that's something that has,
uh, you know, rung in my... Uh, it has not beenunrung in my head like- like a bell for- for a
while. Um,

(25:56):
yeah, sorry. I- I kind of got attracted
Yeah. No, that's- that's great. I mean, John, JohnMaxwell, awesome. Highly recommend that as well.
You know, I- I, uh, you know, I think you're-you're so true though.
Like, when- when you find great people, you know,e- e- even if, you know...
You know, you gotta make sure that there is somesort of a role or when you create that role, that it is a good
fit and that they're gonna... You know, y- youneed that role and you can afford that role.

(26:17):
But, like, I've d- I've done that multiple timeswhere we have created a role because this is a person, you
know, that- that- that I have a relationship with,I've worked with before, or someone I know, you know, has
worked with them. Like, th- there- There's nothingthat, like, better than being able to bring somebody
on your team that, like, you- you just... youalready have that innate, like, trust.
Like, I know that they're gonna be here, they'regonna be loyal. You know, they will be here till the end.

(26:41):
And i- That is so valuable to have those trustedpeople because, you know,
otherwise, you know, when- when you start workingwith someone new, I mean, it does, it takes time to build
that bond and to build that trust and- and to getto the point where, you know, you're, you know, you're-
you're- you're there. But, like, man, when you canjust bring it in on day one-
Yep
... oh, it's- it's so awesome.
Yeah, I totally agree. And- and one of the guysthat- that we brought in who was,

(27:04):
uh... who- who fell into this category, uh, wasand is a real estate
agent in Chicago. And for us, we're a- we're a...
We do high-end interior remodels, uh, typically ina lot of high-rises and things
like that. And there's
a ton of inventory for that in Chicago.
And when we brought on this, um, this- thissalesperson who was also a real estate agent, it was great

(27:25):
because,
you know, part of the equation there, and youdon't just meet my values, but hey, you might be able to bring
something to this equation for us that- that wedidn't have before, which is relationships with tons and
tons of other real estate agents out there.
And for us, from a sales perspective, that openedup a new sort
of prospecting pipeline for us that we hadn't hadbefore,

(27:46):
that... It- it- it increased for us the importanceof not just getting
business from referral from previous homeowner,uh, previous clients and- and
homeowners and neighbors and things like that, butnow focusing on getting leads from real estate
agents in addition to designers and architects.
And now we call those three, we call 'em the RADgroup internally, because they've, they now...

(28:09):
Referrals from those three, uh, individual groupsmake up, like, 75% of
our- of our leads in, uh, excuse- 75% of ouractual closed jobs, I should say.
Um, and so that was really key to us, like,
uh, uh, figuring out this new group of people tobe able to market to.
And now it's sort of changed the way that we sellas a company.

(28:30):
We don't do a lot of, like, traditionaladvertisement, not a ton of, uh,
pay-per-click Google advertisements or anythinglike that.
We still do, uh, a little bit just to sort of, uh,uh, keep our name, uh, up there, but
they represent, like, 5% of the business that weclose in
any year is- is somebody who came to us by way ofthe internet. Now, uh, you know, if you've...

(28:52):
if that's the first place you heard of us.
F- so for us, it's we're really focused on wheredo those real estate agents, those really
high-end real estate agents who are, who areturning over million plus dollar properties, where do
they hang out? What groups are- are they in?
One of our,
one of our most successful marketing sort of, uh,groups that we're in is a

(29:12):
whiskey and cigar group, um, that has turned intofour
major jobs for our company that, you know, itsounds like a weird
expense, my accountant might- might question, uh,what you're doing being part of a- a- a whiskey and
cigar group, but it's like you- you have to findthose people who give
you business, who refer business to you and be theplaces that they are.

(29:36):
I mean, that- that goes for homeowners too.
I mean, we- we don't meet a lot of homeownersdirectly in those kind of groups, but, you know, you
do well to go to those places where our clientsare- are people who have
very limited amount of time. We usually work withtwo busy working
professionals who- who have, um,
uh, money in excess of their time. And so where dopeople who fall into that

(30:01):
category spend the majority of their time? A lotof it is, uh, philanthropy.
A lot of it is sort of, uh, country club, privateschool groups.
Those have been really effective, uh, for us aswell.
And you- you meet one person and do a job for oneperson who's in a-
a- a- a school group, and suddenly all of theparents now know about you.

(30:21):
That's- that's also been another great, uh, sortof avenue of- of leads for us.
But, you know, thinking outside the box, outsideof the traditional sort of nary
groups where you're just beating other contractorsin, uh...
Rotary International has been a huge one for us.I've, I'm a third generation Rotarian.
My grandfather started the Rotary Club ofSchomberg-Hoffman Estates.

(30:41):
My father and uncle were members and, uh, I waspresident of- of the, that club during
COVID. That was an interesting one, uh, to try andrun.
But the Rotary Club has been another huge one forus.
Just sort of avenues where- where you meet peoplewho spend their time, and if you go out and do
good in those places and- and- and don't showup......
uh, visibly being there just to make businesscontacts.

(31:04):
If you're actually there for a genuine reason to,to just meet people and be helpful, we've found that,
that it- it- it has really served to inc- increasethe- the value of
our- our brand, uh, out there. So, um, all ofthose have been really great
strategies for us to find clients in- in a reallydifficult market right
now, um, to- to try and generate leads in.

(31:27):
Uh, and especially when you can't just
throw money at pay-per-click advertising andexpect us to increase the amount of jobs
that we, that we win, right? It's- it's gotta bedoing the hard work, as I say, going
out and meeting people, shaking hands, being inthose groups.
Yeah. That... I mean, that's-
that's so insightful, Wes. Like, thank you for-for sharing that. I mean, I...

(31:49):
And- and I gotta imagine, man, that- that had tohave taken you years to figure out.
So, I'm- I'm wondering,
earlier on, you know, y- you know, you said kindof, you know, today only about 5%, you know,
of- of- of your leads are... I guess your leads oryour customers are coming from- from like your
traditional paid ads, pay-per-click type stuff,but early on, what ha- what was that mix?

(32:09):
What did that mix look like, and what did you do,you know, earlier, and then how did it sort of evolve over
time?
Yeah. A l- a lot of it in the earlier stages waspay-per-click, but, you know, I- I
feel like there's a lot of companies out here who-who have built their business on
referrals. And definitely that's where it startedfor us.
Like- like be- between referrals from, in theearly days, just from previous clients.

(32:31):
That's- that's what turned this from...
Mahogany Builders started because my partner, MattLederer, was doing a project on his own home,
and found a lack of professionalism in theindustry, and- and found a team of
guys, and did such a good job on his own housethat his neighbor over here asked him to do a
remodel for... Or, you know, his brother over hereasked him to do a remodel, and suddenly that just...

(32:53):
It- it went from being a side gig to a m- a- amain gig, right?
And so it- it was all by referrals from pastclients first.
There was no sort of business development like Ihad just talked about.
There was no, uh, real, uh, uh, advertising of anykind, no,
like, in magazines or noth- you know, sort of thetraditional advertising routes like that.
It was all

(33:13):
just organic until
there's a... You hit a point at which you've donework for everybody in your own
personal network who you pa- uh, and- and thesecond and third sort of, uh, levels
of that own network. And you- you- you run out at-at a certain point.
And I think that we probably did that summ-somewhere around the- the 2013,

(33:34):
2014 range, and that was when we started, uh, whenwe brought on that- that
new salesperson. And he
went to the Merchandise Mart, and that was hugefor us.
I don't know if- if every market has somethinglike this, but in Chicago, I know your ears just
perked up if- if, uh, if you've- if you've everheard of the Merchandise Mart, it is the- the

(33:55):
center of- of design and remodeling in Chicago.
That if you were doing a high-end remodel, i- youget stuff from the Merchandise Mart.
It is a,
uh... It was at one point the largest building inthe world.
Uh, it is, uh, like, 18, 20 stories, takes up,
uh, a giant city block, uh, that is full ofvendors for

(34:18):
tile, cabinetry, plumbing fixtures, appliances,all of them being really, really high
end. And so we went to the Merchandise Mart, uh,and started making
contacts. And we made contacts with greatcabinetry companies, great tile companies who were there,
who... Interior designers would go to them.
They would say, "You know, uh, uh, hey, we'rebuying this tile for a job.

(34:39):
We need somebody to install it. Who do yourecommend?" And- and getting us higher up that list.
And now we went from
doing jobs just for our internal network or- orlevels of our own internal friends and family,
maybe past clients of that network, to now we'rereally expanding that network, right?
And that's- that's the hard work, like I talkedabout earlier, of- of
meeting new people who- who are in positions to beable to get your name out there, ingratiating

(35:02):
yourself to those people. We've- we use, um,
a great internal process, uh, that- that we callthe prospecting pipeline, of
turning people from,
uh, from people who we just met into evangelistseventually.
And- and we've got different stages throughout ourpipeline.
There's- there's, uh, there's- there's a- apartner.

(35:23):
There's, uh,
uh... [laughs] I'm- I'm of course blanking[laughs] on it as I'm trying to explain it to you right now, but
the goal is to make it so somebody is referring tous,
numerous projects every single year, that are...
That- that turn into jobs for us. And- and the...What we...
How we treat people at every one of these sort offive stages in our- in our process

(35:45):
is- is different, and so we'd never...
That- that was a- a s- period of growing up forus, and figuring out, like, "Okay,
we've... You know, we know we're getting th- that-that...
We get business from this designer over here.Well, how do we replicate that?
How- how- how do we do more meeting of thesepeople and put them into a system where
we can,

(36:05):
um, you know, help- uh, help move them along and-and get them to understand who
we are, what kind of projects are- are best forus, how they can best refer us?" And
if somebody is an evangelist, who, for us, issomebody who, uh, refers to us
more than two jobs that we win every single year,making sure that we
do right by those people in every way that youwould want to do right by them.

(36:29):
First and foremost, like, taking care of theclients that they send your way, right?
Nothing I'll ever do will be better than makingthem look good for their referral.
But of course, you know, those are the same peoplewho you make sure are getting a real good gift from you
every Christmas too, right? And the people sort ofat the- the- the bottom of that chain are people who
are... You know, we are just fostering therelationship with them.

(36:51):
They're people who don't understand maybe yet whoour ideal client is or where we might fit into their own
ecosystem. Designers are such a huge one of 'emfor us.
So we have
internal design in our company, two fabulousclassically trained interior designers who- who
do everything from, uh, actual, uh, constructiondrawings, documents, to the

(37:11):
selections. And, uh, and- and working with clientsdirectly, and can do an entire
design process. And there's a lot of designers outthere who prefer......
not to do those things, or, or prefer to do lessof that. They don't want to do as-builts.
They want to be the leader or the face of theproject, the one who picks out the FFE and things like that.
And, and for us, um, we work really well as beingthose

(37:33):
designers' back-end in a way. You know, a, a lotof times, they just wanna go...
And you were gonna say something?
Mm-hmm. Yeah. Well, it's, I... So I was, I wascurious though, like, when, when you talk about
these, sort of these, these, these partnershipsthat you're forming in, in both with, with your clients
and with these, you know, these, these partnershere, like, uh, how, how are you incentivizing?
You, you said that, you know, you give them areally nice gift at Christmas.

(37:54):
But is there some other thing that, you know, orsome other incentive, or, like, what, what are you doing
that, like, is, is literally turning them todeliver, like, you know, four referrals per year?
Yeah. That's a great question. And, and it changesbased on, uh, what that person's sort of
role is, right? The, the value you can deliver areal estate agent, huge referral source for us, is
different from the value that I can, that I cangive to a, a designer, right?

(38:17):
The designer, the value I can give them, I sort ofalready, uh, just hit, hit that a little bit.
Like, a lot of designers
don't want to do every part of design that isnecessary for us to go into construction.
Reflected ceiling plans, electrical plans,plumbing, demo plans, those sort of things are not what every
single designer... Some, some do, but not whateveryone does.
So, to be able to provide value to them by beingthe sort of silent back-end to, to

(38:39):
empower them to do more, uh, and, and supportlarger
projects with more organization. We work with alot of one-man shop designers
who, who are got beautiful websites, re- uh, very,very high-end finishes
that they select and work in high-end homes, butthey are, in the end, one person.
We allow those people to be able to do more.

(39:00):
Great business case for being able to meet a, a s-a single p- or, or, or
two-person design firm and be able to really bethe muscle behind them.
And we, we don't need to take the credit foranything-
Wow
... that we do there.
[laughs]
We, we wanna empower those partners to look reallygood. Because when we...
We know when we do that,
th- that more business will come our way. Sothat's the design part.

(39:20):
The real estate agent part, may be a little bitdifferent because, uh, the, the way the real
estate agent might interact with that property orthe, this, uh, the, the, the
couple that you might be doing, uh, work for isdifferent. You know, it...
For real agents, we found ourselves at times,
uh, you find the right person, you don't wanna dothis all the time, but we'll go on walk-throughs with

(39:41):
people. And that is a huge boost to that,
uh, real estate agent's credibility with theirclients.
When the real estate agent's like, "Yeah, we'relooking, you, uh, you know, we, we gotta fixer up over here,
and, uh, I'm gonna bring in my, uh, my contractorto talk to you about potential options for
this," it now makes it more likely for that realestate agent that they could close the

(40:04):
sale. That, and, and that's really in the end whatmatters.
If you, if you help them close that sale, and thenyou go make them look good for giving such a great
recommendation, you, you have now created a ravingfan who is
only going to,
uh, refer you. But you gotta make sure, for boththose designers and those, those real
estate agents, that they understand the rightproject for you.

(40:27):
Yeah.
Uh, we, we've developed relationships with lots ofpeople who fall into those categories who were very
fortunate to give us lots of leads, but not everyone of them is a qualified lead for us, right?
So, um, understanding really clearly what is aqualified
lead for your company and, and, uh, and makingsure that those
people out there know sort of where you, where youfit.

(40:48):
Uh, a real estate agent is not gonna bring us in,uh, to
throw a coat of paint on a home that they'retrying to sell, right? That, that's a super...
They need to be cost-effective, they need to beas, uh, cheap and fast, and that's not who we are, right?
We make sure to let all those real estate agentpartners know that we're not the guys who are gonna do that for
you. But if you have two homeowners who are movinginto a home that they're gonna live in for the next 10, 15

(41:10):
years, where quality is the most important thing,establishing a relationship with a good
contractor is the most important thing, then
you can do no better than, than to bring insomeone from my team.
So what, so what about... And, and great, greatadvice here.
What about with the homeowner, the client? Like,is there anything that you do to...
You know, after the job's completed, obviously,you've, you've done a great job, you've, you've earned

(41:32):
their trust and respect. Is there anything extrathat you do to try to, you know, parlay that
into a few more referrals down the line?
Uh, for sure. Um, it, uh, being there is, is gottabe the, the first
one. I feel like there is... It's pro- very muchtrue, the, the, um,
sort of meme of the contractor who is, uh, uh,gonna run away with your money or is, is

(41:54):
never there to, to service your warranty or neverpicks up the phone as soon as you finish the...
uh, the, uh, the project. Like, all those thingsare really well-earned reputations for, for other
people in our industry. And so, like, it startswith sort of changing the narrative around that and
truly, genuinely being the, the people who arealways there for them.
So, yeah, I mean, like, well after warrantyperiods, we are still checking in with our clients

(42:17):
every single year to, uh... At least once a year,say, "Hey, let's...
Can we come in and seal your tile? The tile thatwe put in, we know it needs to be sealed.
Can we come in and, and do that? We just wannamake sure that, uh, that you're still enjoying..." I mean,
it's, it's demonstrating a genuine care for thejob that you have done
there that, that makes you top of that person'slist.

(42:37):
When you, when, when you as a homeowner
give, give your friend or your neighbor down thestreet a referral for a contractor, and they go and
do a good job for them, the, the credibility thatyou earn, like, it can't be
understated. It, it... You know, ha- havingsomeone who is seen to have a good network, who can be
relied upon for good things, that increasessomeone's status.

(42:58):
So
that's really the center of it for me. Is...
Yeah, of course, we do flowers every Christmas forpeople, and we'll send a, you know, bottle of Veuve or
something like that over to 'em. Uh, but none ofthose things I would say are what, what
genuinely sets us apart. When we do gifts, we donice ones.
We've got some really high-quality blankets. I gotthis one from J.Ford...

(43:19):
From, from John Ford, from J.Ford Construction in,uh, in Park City, Utah.
Uh-When you're buying a gift like that, he, heliked buying the,
the blanket because it's something that's, that'sn- no name on it, no branding or anything like that, but
it's something that's gonna s- be comfortable andsit on your couch for a long time.
And be something that you think of as a homeownerof somebody who wanted to take care of you.

(43:40):
That, that was really important us, not to, not tobrand everything that we do to everyone.
But again, to be a genuine help and, and a lightin people's lives instead of like this
consistent self, uh, promoting, um, marketingmachine.
That's just, that's just not who we are.
Yeah. No, I, I, I love that. Right there, I mean,i- it, you know, y- you go above and

(44:02):
beyond, and you show them that you genuinely careabout them.
And you're not, you know-
Uh-huh
... just there trying to, to squeeze every lastpenny out of them.
I mean, go- going back to seal up their tile, Imean, it's quick trip, costs you, you know, very
little. But like, if that can turn into anotherhuge project, oh boy, the return
on that investment. I mean, that would've beencheaper than having to run probably a, a Google ad.

(44:25):
You know, your customer acquisition cost on a, ona, on a couple hour trip,
you know, is, is, is, is, is way lower than, youknow, the 1000 you'd spend to get, you know, a
qualified lead converted to a customer.
Didn't even think about it in, in the s- in, inthe sort of cost of cl- cu- client acquisition thing, but
you're right. That just, that blows it out of thewater. I mean, it's...
That furthers the sort of narrative that we'vealways had that, that Goo- that, that sort of cold

(44:47):
paper click advertising-
Yep
... finding out about us on the internet has neverbeen the, the way to, to
interact with us, or what, the way that actuallywe earn business.
It's really from being good people that, that,that are genuinely trustworthy and, and that
you would be lucky to work with. Like, we, being,being
genuinely those people is, is what has earned usthe reputation that we have that,

(45:10):
uh-
Wow
... um, yeah, 80% of our business comes our, uh,through referrals from those three sources, plus,
uh, previous homeowners. And we're tremendously,tremendously proud of that.
That's awesome.
Mm-hmm.
And what, what would you say, so those, the, the,you know, the number of leads coming in, what wo-
what would you say your, your close rate, youknow, how many of those are you able to convert from, you know, a
lead to, to a customer?

(45:32):
So, uh, I've, I've got all those stats, uh, if inour, uh, we use
HubSpot for our, uh, for our marketing purposes.We've got a great dashboard that we've built there.
We get about, um,
we get about, uh, 260 leads per year of which wehave, uh,
between a 55 and 60% qualification rate on thoseleads.

(45:53):
You know, if somebody calls me for...
I, I'm just making this up, like landscapingoutside is not something that we typically do, or just like a
one-off I need a cabinetry door. So, we get a, alot of those things.
But, uh, that, that
roughly 55 to 60% of the leads that come in ourdoor are qualified, I
think is a really good percentage. You know, wefeel really fortunate for that.
I know that if we upped the dial on our Google Ads

(46:17):
spend that that percentage of qualified leadswould go way, way, way down because it, the,
uh, the source... That is the, uh, lowest sourceof qualified leads
for...
Google Ads make up about 25% of our total leads
that come in, but only about 10% of our qualifiedleads that come in.

(46:39):
Whereas referrals from warm sources like thoseindustry partners like I talked
about, or, uh, or, uh, previous clients orfriends, uh, those make up
you, you know, uh, about the other 75% of ourleads and make up
about 85% of the actual projects that we do in anygiven year.
So, um, we've been able to keep really goodstatistics on that.

(47:01):
It's something that I like to, to keep my thumb onall the time of that, of what that balance is of
qualified leads that are actually coming in.
Uh, so if you don't have a system and a dashboardthat does that, I think y- y- you need to.
And with the new dashboards that you guys justreleased, I think that would be a really...
If, if you had like a custom field forqualification level or yes/no
qualification, that would-

(47:22):
Yeah
... be a really cool thing to put on, on one'sdashboard.
Yeah, absolutely. And so, but when, so when youthink about kind of how many of those qualified leads
turn into customers, what would you say?
Oh, uh, we're at, so we're at about 22% close rate
from, from qualified leads to customers, uh, andthat translates to about, uh,

(47:44):
nine or 10% of total leads to-
Right
... uh, to, to customers. So, uh, and, and yeah,of course I wish that was higher, uh,
but I think that, uh, a 20% close rate onqualified leads is, is pretty close
to what I understand to be the industry, uh,standard, uh-
Sure
... just from being in re- Remodelers Advantage.And I, I, uh, I, I'm, I'm okay with that.

(48:05):
You know, I-
Yeah
... we, we've got it then mapped out what you'res- if you've been through Sandler you know about making your
cookbook. And, uh, so yeah, it's, it's all part ofour cookbook of how many leads we need every single
week-
Yep
... to generate X amount of, of jobs for us.
And are you, do you like kind of... Ho- how do yousort of think about, you know, when you're budgeting,
you know, your marketing spend. I mean, you know,obviously you're spending some on Google Ads, but it

(48:27):
sounds like the bulk of it is going into this,these networkings, the referrals.
You know, probably maybe even grouping up all the,the gifts and the, and the little, you know, nice things
that you do. I mean, like it, it... How do you,how do you sort of think about how much you need to be spending
every month or year to make sure that you'rekeeping, you know, that top of the funnel filled?
Uh, I, I've tr- I... We've been around 1 to 2% of,of net, uh,

(48:50):
excuse me, of, of, um, top line revenue spent onmarketing, which I think is really,
really low. I thi- I think that is tremendouslylow.
Um, it's, it, I, there are people in my RemodelersAdvantage group who spend 15, 20% of their
top line revenue on, on marketing, and that's alot.
It's just, it's a completely different model thanwe do.
It is right for people in certain places of themarket.

(49:11):
If you are based on volume,
that's probably a good... that's, that's, that'sa, a good place for you. We're not based on volume.
We're, we're, we're based on size. Our average jobsize keeps getting larger and larger, which for us means
that the quantity of jobs that we do every year isgetting smaller and smaller.
And that's a really s- that's a good place for usthat means less....
work for our salespeople, to, to convert lessleads that we need, uh, to convert-

(49:34):
No
... I feel like it is way, way off on a track anddidn't answer your question, no.
No, that's, it's perfect. Yeah. Mm-hmm.
Uh,
a- a- and then h- how do you, you know, so, soagain, kind of you're, you're winning the jobs,
you know, but like you, you said earlier in thebeginning when we were kinda talking about, you know, sort of
software and, and, and how, you know, JobTred isreally helped you to focus more than ever before on your

(49:54):
gross profit. You know, can you explain kind ofwhat, what that is and why that's so important and,
and how are you having more of a focus on that?
Um,
yeah. This was a, a, I'm, I'm smiling because thiswas a great transformation for us that
really started in 2023 when we started usingJobTred.
The systems that we had had there before had not

(50:15):
allowed us to roo- to job cost on individual jobsin a way that we
knew we were capturing all the in- all the incomeand all the expenses on it.
Everything was in sorta despair. Our, our hourswere kept in this system over here.
Our, our expenses were over here in this system.
And so, there was never like one good place to beable to job cost.
And so,
um, [laughs] we've got this now that we are ableto do that.

(50:38):
And, and we are lucky that we, we are perpetually
reconciled. We are reconciled every single Mondaywith all of our, all of our accounts, which is
a difficult thing to do, but we've got a greatoffice, uh, manager that helps us do that.
We've got a board in our office that we trackquarter-to-date, uh,
GP on a weekly basis. And we set goals for ourteam

(51:02):
based on hitting GP goals that the entire team,
uh, enjoys the, the fruits of their labor if wehit cert-...
We've got three different tiers, uh, that, youknow, if you hit X percentage you get Y bonus.
If you hit, you know, this one up here, you getthe higher, you get the higher bonus.
And it's something that we track every single weekas a team.
We look at our profit and loss, put it up on theboard every single Monday.

(51:25):
Uh, and, and we can all look at the, all of theinputs and, and, and
outputs of, of what we did. You see everybody youinvoiced last week.
You see that we had three, 400, 500 hours workedlast week, but we only invoiced
$20,000. Well, hey, there's a, there's adisconnect right here.
And,
um, the focus, the ability to job cost and focuson, on not just like an

(51:47):
individual job basis, but, but an, uh, anaggregate basis like that with
confidence, consistently every week changed theperspective of everyone
in our company to focus on GP now. The sort of qu-af- after we in- re-introduced
this sort of new bonus structure, this team-basedbonus structure,
the buy-in, [laughs] the, a- as, as, uh, asindicated by the sorta

(52:10):
questions that you hear your team ask, you know,uh, a- about, "Hey,
uh, how, when I did this last week, did thatimpact this number here or did it impact this number right here?
Why, why did this have an impact on profit or didit not," changed the way our, our team
looks at what we do on a week to week basiscompletely.
And only able to do that when JobTred reallyfocused us on, on that.

(52:33):
Um, we were bouncing back and forth betweencosting by, by cost code and,
and by item. That's, that's a consistent battlethat I have right now.
I'm probably thinking about going back to doing itby cost item, but, uh, nonetheless, the
visibility that we have into, into theprofitability of each job to be able now to
say, "Why was this job so profitable?

(52:55):
What was different about this job?" And, andquantify and, and switching
tabs, looking at how many hours we actually spentversus a budget has made it like,
uh, you, you, you got the world at yourfingertips, essentially.
You've got all the tools at your fingertips, ifonly you know how to use them.
It's like, uh, like when a doctor uses one ofthose da Vinci machines to, to do

(53:16):
surgery on you. I feel like that sometimes, whereI'm using these tools to not directly, but
indirectly impact my team and the things in, in,in the field in that way.
And, and it's just been so helpful to us. And thedashboards are gonna take that to another level.
Yeah. That's, that's awesome. You know, I, I, Ilove hearing how transparent you are with
this. Like, you know, so many times, I hearbusinesses that, you know, they, they feel like they can't

(53:40):
share, you know, their, their profitability.
Or, or I even see people, they're like, "Well, wedon't even want, you know, our salespeople to know what the
profit is." It's like ho- you know, ho- how are,how are you gonna, you know, get them to go out and, you know,
do their job and sell, you know, great, great workif, if you're not giving them the tools-
It's a great point
... and the visibility that they need.
You know, like you, you're just putting it up foreveryone, your, your, your profitability by week,

(54:01):
that's awesome. And then, and then you've giveneveryone goals, so that it sounds like everyone has an
incentive to-
Oh, for sure
... to help the company hit those goals, and thenthat's how we can all win together.
So it's not like, "Oh, we're just putting moremoney in, in, in the, in the company's pocket." It's like, no,
this is directly gonna come back and benefit you.
And that gives them the incentive to want to befocused on that.

(54:22):
Don't know what we did before this. Don't, don'tknow how I...
Don't, don't know how we operated before this.
Like that, that, that our growth profit is now acentral focus of
everyone on the team every single week issomething that I couldn't have bought.
But if I could have bought it, it would have costway more than, than what I'm paying out
because, eh, it's,

(54:43):
um, it, it has proved to be a great investment.
And, you know, I mean, that, that, that comes withthe, the territory that you can't also be the kinda guy
who's out there hiding the, the, uh, the netprofit or go out and buying a huge
F-150 Raptor or something like that while, whilethe, while you're showing the team's low
profitability, right? That, that kinda stuff, it'syou gotta live a life, I guess, as, as a leader that

(55:05):
matches what you're talking about over there too,right? So it, that kinda goes hand in hand.
But, um-
Yeah
... you know, I, I... We've got no problems withthat at Mahogany Builders.
Yeah.
We're proud of what we do. We're proud of, of, ofmaking a, a seven to 11% net
profit e- every year if we're, if we're lucky, andwe think that that's reasonable, nothing to shake a stick
at, and, uh, something that we're,
uh, we're quite proud of.

(55:27):
So, so how... I'm just curious, h- h- how did youstructure that, that incentive package for
everyone? Does, does everyone have the sameincentive?
Is it kinda based on your role you've got anincentive? Like does everyone...
You know, h- h- how does that look?
We have in our company, uh, uh-... individualbonuses that, that are related to
an individual's KPIs and their role, salespersonin, in closing sales, right?

(55:49):
And we have those team-based goals that every- So,everybody has a couple of different bonuses that
they're able to hit, individual and team-based.
So for us, the team-based is supposed to beubiquitous, that everybody wins when
everybody wins in, in the company. And it's, youknow, i- i- and it is that way because
not everyone's individual actions, if we have fiveprojects going on concurrently, not everyone's

(56:12):
actions on this project are gonna immediatelyimpact this project over here, right?
That, that can be a little bit difficult.
But, uh, but that's why we have individual bonusesfor those people too.
So, it's a way for, for everyone to be rewardedfor both what they do individually and as a
team. How we actually structure it, it's a bit ofa, a moving target and, and I'm the one who sets those
bonus targets. There's, there's three of themevery single quarter that we have.

(56:35):
Prefer not to talk about the actual, uh,percentages, but, uh, it's something that changes all the time.
But it's based on what I think, w- what I, what Iforesee, what I can predict, what I
want my team to s- to be able to stretch to.
If we crushed it last quarter and hit our top linebudget number, yeah, you could
bet I'm probably gonna increase those, because Iwant us to continue to strive.

(56:56):
I think those-
Mm-hmm
... that, that is the sort of essence ofleadership is, is recognizing that and continuing to
have your team strive for goals like that and havethe, the goal not just be static, I guess.
Yeah. So it's, it's percentage based on the GP?
It, it's, it's exactly tied to... Sorry, Ishould've been more, uh, elaborate about that.
Yeah, so it is exactly tied to our GP. Everysingle week we look at what the gross profit is

(57:19):
and I've got it adjusted, so I have got, um, uh,journal entries that every single
week move things-
Wow
... that sh- that are below the line to beingabove the line, right?
Um, just because I, I, I know what that, thatshould be.
Uh, and so we're looking at true GP every singleweek.
And, you know, we can see how it relates to on ourjobs.
If we've got a mix of jobs that are, that arebetween, you know, 33 and 45%

(57:42):
GP, we can sort of see
how they impact the balance of where we are rightnow in terms of invoicing.
And it's, I,
like I said, I don't know what we did withoutthis.
As soon as we implemented this, it was like, it'snow the standard for our company.
I don't imagine us doing anything different.
It's now, I, I put it into the job offers that we,that we make to people that, "Hey, you're gonna have a

(58:03):
team-based incentive every single quarter aroundour, our gross profit." And,
you know, I'm only paying this
when we win, right? Like it's, it's, that's,that's the part of the incentive based that, that's, that's
beautiful about it, right? I don't have to take ahuge risk as a business owner in doing that.
It's, it's-
No
... and we get to, I S- I've always said thatlike, leadership is, is what you celebrate, what you

(58:24):
tolerate, and what you demonstrate. And thatcelebrate part is so, is so important to that, right?
And like, you gotta define what a win is for yourcompany.
And when you do win, you gotta, you gottacelebrate it, right?
And, and so that's, that, that's what we try anddo, is, is celebrate the things that
truly matter to us. And for us,
that's-
[laughs]
... you know, internally, that's GP.

(58:46):
Of course that's, that's-
Yeah
... happy customers, great reviews, e- externally,but internally, that's, the, the profit is what,
uh, makes the blood run through our veins.
That's what ke- that's why we're a business andnot a hobby, right?
No. Man, Wes, this is, uh, this has beenincredible, such great advice.
You know, I, I, I, I really appreciate you comingon and sharing all this.
Thank you.
You know, as, as, as we wrap up, is thereanything, you know, that, you know, that you wish you would've known

(59:10):
earlier on that you now know, you know, kind ofbesides, you know, all the great advice you've already
shared, but just any final thoughts, any advicethat you would give, you know, others who are looking to,
to follow in your footsteps and be able to build-
[laughs]
... and structure their company, you know, so theycan have the same level of success?
Um, th- sure. This may be more specific than youwere, than, than you were looking for.
The last thing that's like at the tip of my tongueis, is record every single team

(59:34):
meeting. Record it. Record it for, for thepurposes of, of leaving
breadcrumbs. We had a, uh,
a, an employee, uh, have, have a, a terriblehealth issue, the next day couldn't,
couldn't work for our company. And had we beenable to have information that we re-
that we talked about in every meeting prior tothat, we would've been able to, uh,

(59:57):
uh, move on in, in a, in a positive way as acompany.
And instead when this happened to us, it reallytook us down because it...
When you're a small company, often one person isthe center of, of everything.
And for us, that was the person who, who went downfor us.
And that was right in the beginning of COVID.
And ever since then, I have recorded and now Ijust added to it using AI to,

(01:00:19):
to take notes of every single meeting that wehave, whether it's in person, I, I use a
recording device, or, or, um,
or meetings like this virtually. Uh, so, uh, use,use a recorder of some kind
and, and keep all those things around. That wouldbe the last thing that I tell you organizationally.
Man, that's awesome.
Mm-hmm.
Hey man, I, I, I really appreciate, you know,again, the, the opportunity to, to be able to, to, to just be

(01:00:41):
a partner here with you, kind of just fly on thewall.
Like, watching you build, you know, your, your,your businesses has just been so exciting because you're
making all the right moves, you built a greatteam, you're focused on the right metrics, the
KPIs, you've incentivized everyone correctly.
You've figured out really how to keep that, that,that engine going, if you will.
And, and now it's, you know, really starting topay off.
So, you know, thank you, Wes, for-

(01:01:02):
Thanks for saying that, Eric.
Yeah, no. It's, it's, it's awesome, man.
And you- and you're great, great inspiration,great role model for everyone else out there.
I hope, hope everyone took a lotta notes on this.
You know, obviously might have to go and, uh,re-watch it a couple times, but, you know, just phenomenal
advice. So thank you, thank you for coming on andsharing everything.
Thank you, Eric. It was my sincere pleasure.
Absolutely. Well, have a great one, Wes.
Thank you.
Thanks for joining us for this episode of BuilderStories.

(01:01:25):
We hope you enjoyed the conversation and gainedvaluable insights that can help you in your
journey along the way. Don't forget to subscribeto the show and leave us a review.
And as always, if you or someone you know has astory to share, please contact
us at builderstories.com. We'd love to hear fromyou.
I'm Eric Fortenberry, and remember, every builderhas a unique story.

(01:01:48):
Keep building yours. [rock music]