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Why Subcontractors Struggle to Make a Profit in Construction

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WEBVTT 00:00:58.399 --> 00:01:04.159 If you don't turn that change around quick enough, it's $1,000 every day you don't get it signed and get an invoice for. 00:01:04.159 --> 00:01:08.319 Every day that's later, that's how much it that's the impact it has on your business. 00:01:08.319 --> 00:01:09.759 Well, what is variable? 00:01:09.759 --> 00:01:14.239 What's variable and how they can make money is how much they pay their subcontractors. 00:01:14.239 --> 00:01:14.719 Right? 00:01:14.719 --> 00:01:15.599 That is it. 00:01:15.599 --> 00:01:18.799 And what's also variable is the risk, right? 00:01:18.799 --> 00:01:30.560 So what happened is lawyers came in and they go, right, well, if we can push the risk down to the subcontractors, what actually happens is that your cash flow gets restricted and restricted and restricted. 00:01:30.560 --> 00:01:31.840 It's like a suffocation. 00:01:31.840 --> 00:01:34.719 And then all of a sudden you haven't got enough cash flow to pay your guys. 00:01:34.719 --> 00:01:41.039 There's a pivotal moment at 5 million that changes, and then you gotta be like, okay, I'm a business owner. 00:02:07.920 --> 00:02:14.399 And if you are enjoying these conversations, don't forget to follow us on YouTube at Activating Curiosity. 00:02:14.399 --> 00:02:22.639 Or go to our website at activatingcuriosity.com and you can follow us there in order to make sure you're not missing any of these conversations. 00:02:22.639 --> 00:02:25.680 Sign up for our newsletter and get to know gentlemen. 00:02:25.680 --> 00:02:33.759 Like we're about to have this conversation here with Kean Brennan and just learn more about each of the guests that we have on each week. 00:02:33.759 --> 00:02:36.399 So today's guest is Kean Brennan. 00:02:36.399 --> 00:02:39.039 He is the founder of Quantum Contracts. 00:02:39.039 --> 00:02:40.800 He is located in Australia. 00:02:40.800 --> 00:02:44.800 They do business in Australia, New Zealand, as well as the UK. 00:02:44.800 --> 00:02:48.479 He is also the author of the Subcontractors Edge. 00:02:48.479 --> 00:02:49.759 Hey Kian, how are you? 00:02:49.759 --> 00:02:50.639 I'm excellent. 00:02:50.639 --> 00:02:51.439 How are you, Ryan? 00:02:51.439 --> 00:02:52.479 I'm doing well. 00:02:52.479 --> 00:02:57.120 Thanks for uh being willing to come on to Activating Curiosity and have this conversation. 00:02:57.120 --> 00:03:03.039 So before we uh dive into the conversation a little deeper, just take a step back. 00:03:03.039 --> 00:03:10.159 Tell a little bit about yourself and kind of how you got into founding quantum contracts and how you got into construction overall. 00:03:11.280 --> 00:03:18.079 Yeah, so um my family back in Ireland, my grandfather had a construction company called uh Brennan Construction. 00:03:18.079 --> 00:03:31.199 And he was someone I really looked up to at the time when he died, Galway Advertisers, the newspaper there, and it had um you know the headline on the front of the newspaper that said um you know debt of the man who built Galway. 00:03:31.199 --> 00:03:33.199 So construction is in our blood. 00:03:33.199 --> 00:03:42.799 Um and I remember very well I wanted to get into construction, and my father said, Don't become a subcontractor or contractor, go go client side, right? 00:03:42.799 --> 00:04:06.799 I was like, okay, so I did the that sort of thing, did it went to university and did the education side, and then for for the guts of 20 years, worked for main contractors, large, large clients around the world on large infrastructure projects, um, oil and gas mining projects, uh very big on these super projects sort of things around the world. 00:04:06.799 --> 00:04:16.079 So even spent a bit of a time working in Iraq, had some bulletproof vests on, getting onto site and armored vehicles, which was a lot of fun. 00:04:16.079 --> 00:04:21.680 Uh, I remember incidentally when we were talking to some of the security guards, you know, it wasn't very dangerous, I will, I will say, at the time. 00:04:21.680 --> 00:04:39.600 There was no you know issues happening at the time, but we had some of the special forces guys, they you know, used to escort us around, and we put on these bulletproof vests, and they would say to us, Ryan, they would say, You're better off with this sitting on the bulletproof vest than wearing the bulletproof vest. 00:04:39.600 --> 00:04:41.039 I was like, Why, why is that? 00:04:41.039 --> 00:04:44.960 And it's like, Well, you're not gonna get shot, you're gonna get blown up. 00:04:44.960 --> 00:04:47.120 So we're like, okay, that was fun. 00:04:47.120 --> 00:04:56.480 So um, but one of the things I I saw time and time again was I like to say subcontractor, I know there's a lot of different terminologies of contractors, subcontractors. 00:04:56.480 --> 00:04:58.319 What I'm really talking about is about the trades. 00:04:58.319 --> 00:05:06.159 So steel fabricators, concrete companies, um, all of these, you know, the trades that sit under the general contractors, main contractors. 00:05:06.159 --> 00:05:19.039 And I would just see these guys coming into a project, you know, with a thin margin, scraping into the project to win the bid, and something would go wrong, and ultimately they would go out of business or they would lose money. 00:05:19.039 --> 00:05:22.320 And this just happened over and over and over again. 00:05:22.320 --> 00:05:28.080 And the interesting thing was I could see from the client side what was happening. 00:05:28.080 --> 00:05:45.840 You know, a lot of times they were doing great work, like almost all of the design, they were doing really good work, and they just weren't able to do the paperwork side of the business, which is getting your changes in, getting your delays in, like managing disputes, negotiating your contract up front. 00:05:45.840 --> 00:05:47.519 They just got all of that wrong. 00:05:47.519 --> 00:05:49.360 Or maybe they didn't see the value in it. 00:05:49.360 -->
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00:05:52.960 They, you know, a lot of these guys think you know, if I just do a great job, things will all work out. 00:05:52.960 --> 00:06:01.519 And when you're on these larger projects, when you're at a project essentially when you're signing their contract, then it's different stakes. 00:06:01.519 --> 00:06:05.679 You're bigger projects, and then there's the risk changes and the game changes a little bit. 00:06:05.679 --> 00:06:09.439 So I could see these guys losing money constantly, going out of business. 00:06:09.439 --> 00:06:15.840 I remember in that Iraq project, I think three separate occasions I watched some contractors just leave site, and that was it. 00:06:15.840 --> 00:06:16.559 Game over. 00:06:16.559 --> 00:06:19.600 You know, they had gone out of business, their cash flow had gone. 00:06:19.600 --> 00:06:31.439 And so I said, you know, I I felt that the way that these companies were set up, you know, the bigger companies, was to really penalize these guys and not pay them what they should be paid. 00:06:31.439 --> 00:06:34.159 And also their paperwork was also horrendous. 00:06:34.159 --> 00:06:37.279 So those two things together made them lose money. 00:06:37.279 --> 00:06:46.240 And so I felt I was doing a bit of a disservice to my grandfather, who would be like, you know, I this is this is me like putting those guys out of business because it was me not paying them. 00:06:46.240 --> 00:06:51.679 It was me saying, No, this is rejected, you're not getting paid for this, um, you've not done what we've asked you to do. 00:06:51.679 --> 00:06:53.679 And there's all these different problems that happen. 00:06:53.679 --> 00:06:58.960 And I felt my grandfather would have been like, No, that's like I'm I I would be putting him out of business. 00:06:58.960 --> 00:07:00.799 And when I investigated, I said, What happened? 00:07:00.799 --> 00:07:02.320 Why how did that business go? 00:07:02.320 --> 00:07:03.279 Like, what happened? 00:07:03.279 --> 00:07:04.399 I was speaking to my father. 00:07:04.399 --> 00:07:05.600 What like how did it end? 00:07:05.600 --> 00:07:15.120 And he goes, Well, when our grandfather like he handed it over to the eldest son, and it's almost exactly he started going for bigger jobs. 00:07:15.120 --> 00:07:19.600 My grandfather had a very simple rule: 33, 33, 33, right? 00:07:19.600 --> 00:07:24.799 It's uh 33% people, 33% material, 33% margin, right? 00:07:24.799 --> 00:07:26.720 That was his rule for everything. 00:07:26.720 --> 00:07:31.279 And then if they couldn't get a job, they turned it down. 00:07:31.279 --> 00:07:39.279 And so my the the eldest son decided, no, we're not gonna do that, we're gonna go for these bigger jobs, we're gonna take smaller margins, a bit more risk. 00:07:39.279 --> 00:07:50.159 I guess the idea would be, you know, there's more revenue, and so a smaller margin would you know ultimately lead to more money, and it didn't work, so a big dispute, lost a lot of money. 00:07:50.159
--> 00:08:06.000 Uh, and my father said he had just he had just graduated and he was an accountant, and his first ever thing out of graduation from being an accountant, his first ever thing he ever had to do as an accountant was to liquidate his father's business, put it into administration. 00:08:06.000 --> 00:08:22.720 So from there, I decided, right, well, I'm gonna start a business called Quantum Contracts, which is said is an outsourced or a managed service for reviewing your contracts, negotiating your contracts, um, doing all your changes, just so these subcontractors get it done, right? 00:08:22.720 --> 00:08:25.679 Because a lot of times it's just getting the work, just getting this done. 00:08:25.679 --> 00:08:31.840 These guys are amazing at the trade that they do, but when it comes to this stuff, they they could be better. 00:08:31.840 --> 00:08:33.919 And that's how it started. 00:08:33.919 --> 00:08:42.799 And then so we're in business almost like the guts of a decade now, and yeah, we've helped over 400 different subcontractors all around the world in the US as well. 00:08:42.799 --> 00:08:48.960 We don't actively try to get clients in the US, but we get a lot in-bend just through through content and stuff that we put out there. 00:08:48.960 --> 00:08:54.960 It's changed the way subcontractors do business, so they're able to compete like for like. 00:08:54.960 --> 00:08:59.759 Uh, because a lot of these general contractors have huge contracts teams for a reason. 00:08:59.759 --> 00:09:00.320 Right. 00:09:00.320 --> 00:09:05.519 And the subcontractors don't, and now they're able to kind of fight toe-to-toe. 00:09:05.519 --> 00:09:08.480 And that's that's the story of how we got to to where we are. 00:09:08.799 --> 00:09:13.679 It's interesting to kind of go through the the history because it's been in a family. 00:09:13.679 --> 00:09:25.679 And you're talking about like the human piece of this and the things that you felt as a human watching your father, watching as you were mentioning before, like it feels like me who are not paying these subs. 00:09:25.679 --> 00:09:32.799 It feels like me who are not supporting those who are also supporting the building industry and getting things constructed for your community. 00:09:32.799 --> 00:09:39.199 So the human piece was coming out for you, not only because of the family, but just things that you were seeing. 00:09:39.199 --> 00:09:41.360 And you mentioned this too. 00:09:41.360 --> 00:09:53.679 It's like, and we'll get into kind of why, you know, you're really talking about the subcontractor side, because in the US, right, most contractors are not self-performing. 00:09:53.679 --> 00:09:56.480 There are a lot of the larger ones do self-performing. 00:09:56.480 --> 00:10:01.120 They'll do drywall, some do concrete, uh, and some of those uh carpentry trades. 00:10:01.120 --> 00:10:23.919 But generally these subtrades, and if it's if, you know, really think about a lot of the prime contracts, if you will, MEP and larger contracts, and then there's, you know, the sub tiers blow blow each of them, like it takes so many subcontractors to build that if one goes into default or one has a major issue, like the whole project suffers. 00:10:23.919 --> 00:10:26.480 And that ends up hurting a lot of people, right? 00:10:26.480 --> 00:10:38.559 So just to to dive in this a little more, the problem that you're aiming to solve then with the subcontractors, just, you know, you've been spending 10 years kind of focused on this, you've you've written the book. 00:10:38.559 --> 00:10:45.679 You know, when as you're looking at it, what have you learned over these 10 years as you're diving into this problem that you're aiming to solve? 00:10:45.679 --> 00:10:53.519 And and what has that really kind of helped you kind of guide each of these subcontractors as well as as well as you're looking forward, right? 00:10:53.519 --> 00:10:56.799 Like, like what might be changing as far as contract models. 00:10:56.799 --> 00:11:02.319 But um, because like as you mentioned, like they don't have large contract teams inside of these. 00:11:02.319 --> 00:11:07.199 And and now with a lot of the technology that's coming out and other things, there's there's some benefit there. 00:11:07.199 --> 00:11:09.519 But talk talk a little bit more about that problem. 00:11:09.919 --> 00:11:14.319 The real problem is, and this this happened pretty aggressively. 00:11:14.319 --> 00:11:16.000 Um, it's it's getting close to 20 years ago. 00:11:16.000 --> 00:11:25.839 It's about 15 years ago where this happened, and a load of you know, these big consultancies, the general contractors you got started getting really, you know, really big, right? 00:11:25.839 --> 00:11:27.759 And really profitable and making a lot of money. 00:11:27.759 --> 00:11:34.000 You know, we you got huge lots of examples in in the States and Canada of these massive companies. 00:11:34.000 --> 00:11:44.399 And these consultants came in and lawyers and said, you know, you're in the game just for the general contract so you understand their game. 00:11:44.399 --> 00:11:49.360 Their game is they have they win the whole project from the the ultimate client. 00:11:49.360 --> 00:11:53.759 And so they're how much they're gonna get paid is is fixed in general, right? 00:11:53.759 --> 00:11:57.039 Here's how much you're gonna get paid, here's what you quoted for the whole project. 00:11:57.039 --> 00:12:01.519 And then what they do is they get a loan from the bank to finance that project, right? 00:12:01.519 --> 00:12:04.959 And how they make money is an arbitrage between those two things. 00:12:04.959 --> 00:12:14.319 How much I'm gonna get make from the client, how much I'm gonna have to pay back the client, uh as I pay back the bank, and the delta between that is how much money I'm gonna make. 00:12:14.319 --> 00:12:15.839 That's that's their model. 00:12:15.839 --> 00:12:19.199 And so they're fixed.
00:12:19.199 --> 00:12:22.799 I have to pay back the bank this much, and this is how much I'm gonna get from a client. 00:12:22.799 --> 00:12:24.639 Sure, there's changes and stuff, right? 00:12:24.639 --> 00:12:26.159 Well, what is variable? 00:12:26.159 --> 00:12:31.360 The what's variable and how they can make money is how much they pay their subcontractors, right? 00:12:31.360 --> 00:12:32.240 That is it. 00:12:32.240 --> 00:12:35.519 And what's also variable is the risk, right? 00:12:35.519 --> 00:12:46.000 So what happened is lawyers came in and they go, right, well, if we can push the risk down to the subcontractors, yeah, because construction, if stuff goes wrong, which it always does, right? 00:12:46.000 --> 00:12:47.120 It's construction, right? 00:12:47.120 --> 00:12:48.319 We have a delay, you know. 00:12:48.319 --> 00:13:03.439 There's the famous one in Ireland where there's a massive delay in uh building a like a really you know well-known uh uh highway in Ireland, and the whole thing got delayed for a year because of snails, these exotic snails that they found on a land, right? 00:13:03.439 --> 00:13:05.600 And so stuff happens, yeah. 00:13:05.600 --> 00:13:24.079 And so they learned that if we push the risk down to the subcontractors in our contracts, when stuff goes wrong, they will bear the burden of the cost of these delays, and we will we will have less of the burden, and that again that helps with their arbitrage and how much money they make. 00:13:24.079 --> 00:13:26.319 So they started making these contracts. 00:13:26.319 --> 00:13:33.120 We used to have a lot of standard contracts which were reasonably fair, and now almost every single contract is no longer standard. 00:13:33.120 --> 00:13:42.240 It is written by the client, or they take a standard form contract which looks standard, and then they amend it with these different changes to push the risk. 00:13:42.240 --> 00:13:43.600 Then that's that's what we see. 00:13:43.600 --> 00:13:49.839 Like there's standard contracts, just a plain, plain, plain standard contracts don't exist anymore. 00:13:49.839 --> 00:13:52.079 Uh like an industry body standard contract. 00:13:52.079 --> 00:13:54.159 They they exist, but then they're amended, right? 00:13:54.159 --> 00:14:00.959 Which is even more concerning because as a subcontractor, you see, oh, it's a standard contract, and then you're like, okay, fine, I'll sign it. 00:14:00.959 --> 00:14:04.879 And then they actually go into the detail and like, oh no, they've they've changed this, right? 00:14:04.879 --> 00:14:07.120 So that's what's happened. 00:14:07.120 --> 00:14:17.120 And over the years as well, with with technology, the smaller main contractors have adopted this way of doing it as well, smaller general contractors. 00:14:17.120 --> 00:14:29.360 And with technology, with corporate governance and you know, software like Procore and all of that sort of stuff coming in, they're able to manage like and they're able to uh act like these big companies. 00:14:29.360 --> 00:14:43.120 And so even smaller subcontractors now are getting handed these extremely risky contracts, and so uh construction has the highest insolvency rate, bankruptcy rate of any industry, right? 00:14:43.120 --> 00:14:45.199 And it's this this is the problem. 00:14:45.199 --> 00:14:49.839 Now, the problem is it the real problem is it's a game, right? 00:14:49.839 --> 00:14:56.559 And they're gonna give you their worst possible contract in the first instance, and they know that they've given you the worst contract. 00:14:56.559 --> 00:14:58.399 They have backup things to everything. 00:14:58.399 --> 00:15:04.240 If you negotiate, they will, you know, they'll they'll move on stuff, and then you have to understand the risk that you're signing up to. 00:15:04.240 --> 00:15:07.039 Are you putting your your are you signing a director's guarantee? 00:15:07.039 --> 00:15:08.799 Are you putting your own house on the line? 00:15:08.799 --> 00:15:14.879 Are you are you signing up to something that you know that says, oh, any delay is at your cost, right? 00:15:14.879 --> 00:15:15.839 Or whatever. 00:15:15.839 --> 00:15:25.199 Are we at you you have to proceed with the work even if we have an agreed cost, whatever these things are, you gotta understand your risk tolerance and what you will accept and what you won't accept. 00:15:25.199 --> 00:15:31.199 And so that's that's what's happened the industry in entirely now, right? 00:15:31.199 --> 00:15:32.719 And that's the game that we're playing. 00:15:32.719 --> 00:15:44.959 And ultimately, what that means is relationships, although important in construction, the nature of how important relationships are in construction has changed in that they're not as important, right? 00:15:44.959 --> 00:15:46.319 They just aren't, right? 00:15:46.319 --> 00:15:53.039 Contracts are more important, it's all fun and games, we're all we're all buddies until we have to reach all of a sudden there's a problem. 00:15:53.039 --> 00:16:02.319 Then when there's a problem, we'll reach into the contract, and then you know that you sign a contract that's not in your favor and you are candidly in the SH1T, right? 00:16:02.319 --> 00:16:07.600 So we gotta flip that dynamic and start getting more professional about how we operate our contracts. 00:16:07.600 --> 00:16:09.199 That's what's happened. 00:16:09.199 --> 00:16:15.759 Now, the next thing I I really want trades people to understand is you've got this guy, right? 00:16:15.759 --> 00:16:17.919 This is and these are my people, right? 00:16:17.919 --> 00:16:24.240 Who is at some stage in his life, he's he's working for some other, let's just say scaffolding company, right? 00:16:24.240 --> 00:16:25.919 Or steel, let's let's say steel fabrication. 00:16:25.919 --> 00:16:30.319 He's working for some sort of other steel fabrication, he's trade, and he said to himself, fuck it, I can do this better. 00:16:30.319 --> 00:16:31.679 This is
shit, right? 00:16:31.679 --> 00:16:33.600 And and he does, right? 00:16:33.600 --> 00:16:40.319 He starts his own business, he he does great, and he grows his reputation for being excellent at what he does, right? 00:16:40.319 --> 00:16:43.439 And then uh doesn't have any sort of marketing system. 00:16:43.439 --> 00:16:56.959 He grows by referrals because he has developed all of these, you know, you know, word of mouth, he do, he does an excellent job, put him on, and he grows and he grows until he gets to around 5 million is kind of the threshold where we see stuff changing. 00:16:56.959 --> 00:17:03.120 Then the problem I said at the start happens, now we start going on bigger projects and now we start getting their contracts. 00:17:03.120 --> 00:17:17.839 And that's where construction changes from being in construction to being in the business of construction, where that tradesperson now needs to understand there's risk profiles, there's cash real cash flow issues. 00:17:17.839 --> 00:17:22.960 And so this is where contracts become so important because I'll give you an example, right? 00:17:22.960 --> 00:17:26.400 And so we do this a lot of times with it with our clients to demonstrate. 00:17:26.400 --> 00:17:32.400 We see about a 10, 10 to 12% margin leakage every year. 00:17:32.400 --> 00:17:37.759 So if your revenue is say, I don't know, let's say your revenue is 5 million, okay? 00:17:37.759 --> 00:17:42.559 That means that 400k is just evaporating out of your business every year, right? 00:17:42.559 --> 00:17:51.440 Which is if you and then when we talk about debtor days and we talk about cash flow management, every day that you don't get a change in is about $1,000. 00:17:51.440 --> 00:17:54.240 And that's you don't understand, you don't see that, right? 00:17:54.240 --> 00:17:59.039 Because you're like, okay, so let's say they ask me to do work, and then let's just say you do it badly. 00:17:59.039 --> 00:17:59.920 Ask me to do work. 00:17:59.920 --> 00:18:01.519 I went ahead and did the work, right? 00:18:01.519 --> 00:18:03.519 Which means you've paid your guys to do the work. 00:18:03.519 --> 00:18:05.920 You've paid for equipment, you've paid your guys to do the work. 00:18:05.920 --> 00:18:12.080 If you don't turn that change around quick enough, it's a thousand dollars every day you don't get it signed and get it invoiced for. 00:18:12.080 --> 00:18:15.840 Every day that's later, that's how much it that's the impact it has on your business. 00:18:15.840 --> 00:18:24.000 So once you understand that and you get real quick with your changes, real quick with your delays, firstly, they're going to approve them quicker because they just happened and they know that the thing. 00:18:24.000 --> 00:18:29.360 Whereas if you try to get them, you know, two months later and you're trying to explain this delay that happened, they're like, no, that didn't happen. 00:18:29.360 --> 00:18:30.960 Then they don't pay you for it. 00:18:30.960 --> 00:18:35.519 And so you're you're you've done it, you've done the work, you've paid your guys, and then you get paid 60 days later. 00:18:35.519 --> 00:18:43.360 And it's not the the payment terms, it's but your slowness of getting the change in, them approving it, then you invoicing against it. 00:18:43.360 --> 00:18:44.800 That's the 60-day period. 00:18:44.800 --> 00:18:50.480 Like it's literally, we're not talking about payment terms, we're talking about from the time you did the work to the time the money hits the bank account, right? 00:18:50.480 --> 00:18:51.519 Because that's your cash flow, right? 00:18:51.519 --> 00:18:54.320 We're not talking in fictional money, we're talking in cash money. 00:18:54.320 --> 00:18:55.440 So that's the problem. 00:18:55.440 --> 00:19:00.640 If you get good at that, you you shrink that window, and then your cash flow becomes a lot better. 00:19:00.640 --> 00:19:09.279 And so construction companies that like you know, we talk about companies going bust, which which kind of it makes people think that there's an explosion. 00:19:09.279 --> 00:19:11.519 There's one event that puts you under, right? 00:19:11.519 --> 00:19:12.480 That's not how it works. 00:19:12.480 --> 00:19:14.560 I've seen it so many times over the years. 00:19:14.560 --> 00:19:18.880 What actually happens is that your cash flow gets restricted and restricted and restricted. 00:19:18.880 --> 00:19:20.160 It's like a suffocation. 00:19:20.160 --> 00:19:23.120 And then all of a sudden you haven't got enough cash flow to pay your guys. 00:19:23.120 --> 00:19:26.320 Then you get this, you know, bridging loan, right, to cover you, right? 00:19:26.320 --> 00:19:32.080 And then you're just playing this downhill game because the bridging loan comes with fees and it's downhill, downhill, downhill. 00:19:32.080 --> 00:19:33.759 Then you got to get another job, right? 00:19:33.759 --> 00:19:35.840 Uh, to like because you're in trouble. 00:19:35.840 --> 00:19:37.600 And then to get that job, what do you do? 00:19:37.600 --> 00:19:41.440 Okay, well, I got I gotta go, I gotta win this job, so I take my margin down. 00:19:41.440 --> 00:19:43.360 And it's a downhill spiral, right? 00:19:43.360 --> 00:19:52.960 And we want to get out of that downhill spiral and start creating an uphill spiral where you know the opposite of that is you are expensive, right? 00:19:52.960 --> 00:20:00.480 You uh people know you're expensive, but they're okay with you being expensive because you're really good, you're really quick, and the quality is great, right? 00:20:00.480 --> 00:20:11.440 And then you get this uphill spiral, you get better margins, you get better work, you get a good reputation because if you have if you're getting better margins, you're getting better people, you're getting better equipment, and then it goes up and up and up that way. 00:20:11.440 --> 00:20:15.519 That's the spiral we want you to go in, not the downward spiral of it going nasty.
00:20:15.600 --> 00:20:15.840 Yeah. 00:20:15.840 --> 00:20:16.880 Does that make sense? 00:20:16.880 --> 00:20:18.560 Yeah, it all makes total sense. 00:20:18.560 --> 00:20:20.080 And I think you said it at the beginning. 00:20:20.080 --> 00:20:26.800 Like the the life expectancy of a lot of contractors is very short when they start a construction company. 00:20:26.800 --> 00:20:31.279 Like most do not make it five years to even get to that five million. 00:20:31.279 --> 00:20:36.960 And it and again, we're we could talk about commercial, you can talk about residential, but we're talking about it like holistically. 00:20:36.960 --> 00:20:48.320 It's subcontractors, even general contractors, it's a difficult industry to get into due to the as you're saying, the cash flow and managing all those things because you're upfronting a lot of the cost. 00:20:48.320 --> 00:21:17.920 And with subcontractors, especially here in the States, and it's it seems this way in in Australia, as you're describing, or New Zealand or the UK that you work in, like it's everything is built on the backs of subcontractors, and they become the bank of the contracts and of the construction because they have to go out, procure the materials, as you said, pay for the they have the warehouses, they have to go make something, they have to get it to the project site. 00:21:17.920 --> 00:21:25.279 And as we go into more prefabrication and a lot more upfront cost, it's been very difficult for people. 00:21:25.279 --> 00:21:28.160 I think about electrical and I think about mechanical. 00:21:28.160 --> 00:21:39.360 Like they, you know, they have to have the sheet metal, they have to have the condom, they have to have the wiring, they got to do all of that in their in their warehouse or in their factory, then get it to a project site. 00:21:39.360 --> 00:21:42.880 So there is a lot of upfront cost, as you're saying. 00:21:42.880 --> 00:21:58.160 And that's one area where that makes it very difficult that if you are going into that spiral where you're robbing from this project to pay for that one and just keep going through that, that's how you end up into that five-year and out program. 00:21:58.400 --> 00:22:00.240 You get a you get a bad reputation, right? 00:22:00.240 --> 00:22:05.120 So let's say you know, this is the worst thing, like, you know, so not every subcontractor is good, right? 00:22:05.120 --> 00:22:13.519 So, you know, I've I've had experiences myself where I've a subcontractor's up for uh asked for an upfront payment, which I'm totally for. 00:22:13.519 --> 00:22:16.400 I I tell all of our guys you got to ask for an upfront payment, right? 00:22:16.400 --> 00:22:18.320 Because that again is going to help your cash flow. 00:22:18.320 --> 00:22:24.000 But if my upfront payment is paying for your last job, well then no way, right? 00:22:24.000 --> 00:22:24.800 And that's what happens. 00:22:24.800 --> 00:22:26.560 And that's they get into this spiral. 00:22:26.560 --> 00:22:29.840 Can I tell you a little uh little story about a guy called Corey? 00:22:29.840 --> 00:22:34.640 He actually it is a steel fabrication business, really good business, really, really good business. 00:22:34.640 --> 00:22:37.680 And he he comes to me and he goes, Can you have this dispute issue, right? 00:22:37.680 --> 00:22:38.560 And like, okay. 00:22:38.560 --> 00:22:40.880 And I just I really wanted to wind him up. 00:22:40.880 --> 00:22:42.720 I want to get I wanted him to get angry, right? 00:22:42.720 --> 00:22:44.400 So he just doesn't make this mistake again. 00:22:44.400 --> 00:22:47.680 So he was like, This this guy owes me two million dollars, right? 00:22:47.680 --> 00:22:49.440 Over many invoices, right? 00:22:49.440 --> 00:22:51.519 And it's uh at any one time, right? 00:22:51.519 --> 00:24:07.890 So it's not owed two million in one in one hit, but over the year, right, we I got up all of how it was just Payments. 00:24:07.890 --> 00:24:10.769 They were really slow with their payments, like late, right? 00:24:10.769 --> 00:24:13.970 And so we added up the whole, the total figure, right? 00:24:13.970 --> 00:24:17.730 I go, right, here's the total figure, and here's how late it was, right? 00:24:17.730 --> 00:24:20.849 Now let's look at an overdraft facility, right? 00:24:20.849 --> 00:24:23.490 Of of how much it would cost, right? 00:24:23.490 --> 00:24:31.009 And so we we got the percentage and I showed him, right, that you have just because of them not paying you, right? 00:24:31.009 --> 00:24:35.490 If they had to pay you, or you had to handle this as an overdraft, right? 00:24:35.490 --> 00:24:39.490 So he had a good business, he didn't have to have an overdraft, he had the cash flow, right, which was good. 00:24:39.490 --> 00:24:45.490 But if you had an overdraft facility, you would have paid 160 grand to the bank. 00:24:45.490 --> 00:24:54.930 So you have just instead of for them paying you slowly, right, as slow as they did, you have just gifted them 160 grand that they didn't have to pay. 00:24:54.930 --> 00:24:55.569 Gifted. 00:24:55.569 --> 00:24:57.890 You're the most generous man I know, right? 00:24:57.890 --> 00:24:59.970 Because you just let them have it, right? 00:24:59.970 --> 00:25:00.210 Yeah. 00:25:00.210 --> 00:25:02.450 And that's your systems about being paid slow. 00:25:02.450 --> 00:25:04.450 Like you let it happen, essentially. 00:25:04.690 --> 00:25:05.170 Mm-hmm. 00:25:05.170 --> 00:25:07.730 No, it's that's so true. 00:25:07.730 --> 00:25:09.170 And I've heard it over and over again. 00:25:09.170 --> 00:25:19.490 And I think about like I've I've been the general contractor and I've been the subcontractor, and you think about like the payment terms in one, like I said, you're you are fronting a lot of the cash. 00:25:19.490 --> 00:25:31.569 Yes, we should not be spending, and and this comes into you know, the agreement of like how do you go through escrow or some other account to ensure that the
money is going where it needs to go to build trust? 00:25:31.569 --> 00:25:37.089 Because I think that's a lot of the problems that we have in the industry is there's a lack of trust. 00:25:37.089 --> 00:25:44.049 And that trust gets broken by one subcontractor and a GC that had a bad experience. 00:25:44.049 --> 00:25:48.289 And once they go to the next job, it doesn't have to be that same subcontractor. 00:25:48.289 --> 00:25:49.569 It's all of them. 00:25:49.569 --> 00:26:03.970 We all begin to pay increased price or increased pain points, or as you described, contracts with flow-down clauses in them that become these things that bury us as subcontractors. 00:26:03.970 --> 00:26:13.170 So yeah, I this is such an important problem to address because nothing can be built if our subcontractors do not have strong financials. 00:26:13.170 --> 00:26:20.609 And if they're constantly, you know, going through the challenges and any stress inside of any human, right? 00:26:20.609 --> 00:26:29.970 But you start to see a business start to have that financial stress, everybody begins to feel it, which then makes it more of a challenge on the project site. 00:26:29.970 --> 00:26:43.650 And not only is it a financial thing, now things become even riskier for how you know people start leaving or the quality goes down even worse, and then things be, they just spiral into other more challenging areas. 00:26:43.650 --> 00:26:44.930 And you can't get surety. 00:26:44.930 --> 00:26:55.250 You can't get, you know, there's all kinds of things that become more difficult, not just for that sub, but for everyone else in that region where the costs begin to increase. 00:26:55.250 --> 00:27:02.289 So one challenge for one sub is a tremendous hardship for a lot of people. 00:27:02.289 --> 00:27:18.529 And I think that's, you know, you focusing on the subcontractor side, because uh again, some of them are smaller and they can do quality work, but we as the industry, and I get it, like the whole thing has been like, I've been bitten too many times as a general contractor. 00:27:18.529 --> 00:27:20.370 I can't do it again. 00:27:20.370 --> 00:27:22.210 And I I've heard this, Keen. 00:27:22.210 --> 00:27:30.049 I don't know if you have, but like I've had events and subcontractors saying, like, are we supposed to learn business first or construction first? 00:27:30.049 --> 00:27:34.289 And and that sounds like a hard question, but it's like you you got to do both. 00:27:34.289 --> 00:27:45.410 Like you have to have at least a team or support group like you're doing, and the attorney side to be able to help you navigate that as well as the financial side. 00:27:45.410 --> 00:27:54.529 So a good uh you know, accounting person or project accountants that can help you see all these things so that you are getting the paperwork in on time. 00:27:54.529 --> 00:28:00.289 You're not losing money because you're not filing a change order because you just want to be the nice guy, right? 00:28:00.289 --> 00:28:02.049 Like that's what ends up biting you. 00:28:02.049 --> 00:28:03.809 I think that's as such a good point. 00:28:03.970 --> 00:28:07.170 Now, I don't necessarily obviously I have a I have quantum contracts. 00:28:07.170 --> 00:28:10.049 I don't think you need to use a company like ours, quantum contracts, right? 00:28:10.049 --> 00:28:11.890 You can learn this stuff yourself. 00:28:11.890 --> 00:28:19.730 And I would say that of course you need to learn the business side, you know, when you're starting uh starting, but that's typically not what happens. 00:28:19.730 --> 00:28:27.970 Typically they just do the story I said, which is right, but at five million, roughly, that's when you got you have to learn the business side. 00:28:27.970 --> 00:28:31.650 And what we I like to call it is constraint diagnosis, right? 00:28:31.650 --> 00:28:36.130 As in you need to be able to have a set of reports that you are very simple. 00:28:36.130 --> 00:28:40.130 You have your your cash reporting, right, which is a monthly, right? 00:28:40.130 --> 00:28:42.609 So you can understand in the cash management system. 00:28:42.609 --> 00:28:53.730 You need to have your acquisition report, which shows you how like how many proposals, where am I getting my clients from, how many proposals am I submitting to see that, and then your your expenses uh diagnosis. 00:28:53.730 --> 00:29:02.049 And then when you have that, and you can you see those three reports every single, every week ideally, but every single month, you can diagnose specific constraints. 00:29:02.049 --> 00:29:09.970 So that means you can work on the areas of your business that actually matter and bring in bring in money, right? 00:29:09.970 --> 00:29:21.730 So if you're a lot of these guys don't understand, so if I say contracts, and this is I guess why I'm I'm chatting to you today, is to get that out there, is contracts is where the money is. 00:29:21.730 --> 00:29:28.690 And I'm not talking about the stupid paperwork or like I'm just completely dis degrading myself, right? 00:29:28.690 --> 00:29:42.849 Or negotiating contracts, but I needed you to understand that from a business perspective, right, managing your contracts, and when I'm saying contract, I'm talking about change orders, you know, delays, all of that is is where the money is, right? 00:29:42.849 --> 00:29:49.329 So you get your margin right at the start, and then you get an upfront cash payment uh to get your your cash flow in the right way, right? 00:29:49.329 --> 00:29:52.210 And you can say there's loads of different ways to do that, doing that. 00:29:52.210 --> 00:30:00.210 But getting the changes and stuff in, that is so important as a lever to pull to improve your margins and to improve your cash flow. 00:30:01.089 --> 00:31:00.099 Yeah, it's it as you just said, the contracts aren't the paper, right? 00:31:00.099 --> 00:31:03.460 Like every project is going to have a contract. 00:31:03.460 -->
00:31:05.700 That contract value is your revenue. 00:31:05.700 --> 00:31:14.099 And as you're talking about, it's like understanding the cost on those jobs, understanding your margin of how you've how you've set it up and structured it. 00:31:14.099 --> 00:31:23.460 One, if you can't see the cost coming in and getting the revenue and the cost align in the same period, you're going to have a problem, which is what ends up happening, I think, to a lot of people. 00:31:23.460 --> 00:31:24.579 I'm sure you've seen this. 00:31:24.579 --> 00:31:27.220 It's like they're not tracking the costs. 00:31:27.220 --> 00:31:34.819 Like they don't have a whip, they don't have a report that that they even understand like all of the cost for the month as they came in. 00:31:34.819 --> 00:31:42.740 So they'll they'll they'll recognize some sort of either cash flow or you know, do a certain dollar amount, and then they're like, oh, we're doing okay. 00:31:42.740 --> 00:31:53.940 And then they see the cost when they finally get the report in, when they finally get the invoices or a change order or whatever information is coming into the accounting side. 00:31:53.940 --> 00:32:01.139 So, you know, I'm interested in this because if everyone gets, you know, if you start a business, you want to start it because you want to be successful, right? 00:32:01.139 --> 00:32:01.940 Like that's the thing. 00:32:01.940 --> 00:32:05.299 Like, and then at the same time, it's they want to build. 00:32:05.299 --> 00:32:09.539 So it's like, I want to do this because I love to build for my community. 00:32:09.539 --> 00:32:14.019 I love to, whether it's residential or they're building uh hospitals, whatever it is, right? 00:32:14.019 --> 00:32:22.500 Whatever protocol they choose to do, like there is this resistance, right, to do some of these things. 00:32:22.500 --> 00:32:28.980 Like, we all have things that we hate to do and we just hold off and we don't want to do them. 00:32:28.980 --> 00:32:41.700 But what are some of those additional obstacles and barriers that you've heard, can, as you've had these discussions and kind of been out doing this for 10 years of like the roadblocks that they're putting up? 00:32:41.700 --> 00:32:59.059 Like, hey, you know, I do it if if this happened, or or what barriers that they're just putting up in front of themselves when the reality is like, like, hey, these little steps that we're talking about can be the difference between getting past five million and being past five years in business. 00:32:59.059 --> 00:33:05.700 So can can you walk through some of those things you've heard and how have you helped those mindsets be changed? 00:33:06.420 --> 00:33:07.220 Yeah, for sure. 00:33:07.220 --> 00:33:12.579 I mean, so one of the things is, you know, you don't have to be a contracts expert, right? 00:33:12.579 --> 00:33:14.339 You don't have to be an accountant. 00:33:14.339 --> 00:33:18.339 In fact, you want to make all of these things much simpler
for yourself. 00:33:18.339 --> 00:33:29.059 So uh an example of we got a uh a lady in the in the subcontractor's boardroom, and she was, you know, she I've been working with her for a little while, and she's had a bumper year, right? 00:33:29.059 --> 00:33:30.660 She's had a fantastic year. 00:33:30.660 --> 00:33:34.180 She's made, you know, more money than she's she's ever made before. 00:33:34.180 --> 00:33:45.779 She does um typically we don't we you don't deal with these sort of clients, but uh she does luxury bathrooms and kitchens and uh all of that stuff, like marble, everything like for high-end houses. 00:33:45.779 --> 00:33:53.619 So these are even though they're like bathrooms and kitchens, you wouldn't believe how much people spend in cabinetry and stuff like it's it's big money, like it's crazy. 00:33:53.619 --> 00:33:54.019 Right. 00:33:54.019 --> 00:33:58.579 And so she she she kind of hit our five million dollar threshold to be part of the group. 00:33:58.579 --> 00:34:02.899 She's basically just gone done really, really well. 00:34:02.899 --> 00:34:06.259 And next thing she says, I've done well. 00:34:06.259 --> 00:34:10.980 My biggest problem now is I have a huge tax bill and I've got no money to pay it. 00:34:10.980 --> 00:34:13.059 And I'm like, what? 00:34:13.059 --> 00:34:14.500 What like I'm like, what? 00:34:14.500 --> 00:34:16.980 Like she's like, yeah, well, I've because I made all this extra money. 00:34:16.980 --> 00:34:19.780 I've all this ex I have all this extra tax now, I have to pay. 00:34:19.780 --> 00:34:21.940 And I'm like, yeah, obviously, right? 00:34:21.940 --> 00:34:23.619 Uh that's a good thing, really. 00:34:23.619 --> 00:34:25.539 But like, what's going on here? 00:34:25.539 --> 00:34:31.059 And so we established that you didn't have uh any sort of cash management system. 00:34:31.059 --> 00:34:35.139 And so one of the things that we have is people, accountants are really complicated. 00:34:35.139 --> 00:34:39.380 And I'm not, I'm about to disaccount accountants, so before I get into it, I'm not going to disaccountants, right? 00:34:39.380 --> 00:34:40.099 Just so you're clear. 00:34:40.099 --> 00:34:42.820 Accountants are amazing at helping you save money. 00:34:42.820 --> 00:34:52.420 Um, and you know, they'll tell you, okay, you need to you need to buy yourself a car before the end of tax year, or they'll, you know, they give you these big lumpsum advices, right? 00:34:52.420 --> 00:34:53.700 Which is fine, right? 00:34:53.700 --> 00:34:57.460 And they'll help you, you know, code stuff in their rights here, but just let them off and do that. 00:34:57.460 --> 00:35:01.700 One of the things that happens with accountants is they they follow something called gap, right? 00:35:01.700 --> 00:35:04.420 General account accepted practices, yeah. 00:35:04.420 --> 00:35:05.940 There's a good A there, right? 00:35:05.940 --> 00:35:08.019 Which is essentially accrual accounting. 00:35:08.019 --> 00:35:13.059 Okay,
and accrual accounting to me is fictional money, right? 00:35:13.059 --> 00:35:19.619 So they if you invoice your client, they consider that they you you're due this revenue. 00:35:19.619 --> 00:35:24.180 And so they'll put that revenue in your revenue, even though you haven't been paid that money, right? 00:35:24.180 --> 00:35:30.019 So stuff like that happens, or they'll distribute out costs over a period of time, even though you paid it all in one month. 00:35:30.019 --> 00:35:36.980 Or there's loads of creative accountants that they do to make your tax return better, and that's totally great, right? 00:35:36.980 --> 00:35:40.500 But I would almost completely ignore that, right? 00:35:40.500 --> 00:35:46.099 Just let them do their thing and you manage your business from a cash accounting point of view. 00:35:46.099 --> 00:35:46.740 Right. 00:35:46.740 --> 00:35:51.380 So how much money is coming in, actual real dollars coming in every month. 00:35:51.380 --> 00:35:55.220 And so if you have a system, right, very simply, and do you mind if I share screen? 00:35:55.220 --> 00:35:56.099 Is that okay? 00:35:56.420 --> 00:35:56.980 Yeah, sure. 00:35:56.980 --> 00:36:03.059 So if you're listening on audio, just be sure to check in on the YouTube, um, be able to see what Keyan is share. 00:36:04.180 --> 00:36:14.019 Okay, so the simple, and this is where you can manage, like I guess my ultimately what I'm trying to say here is if you have a couple of really simple dashboards, like a couple of Excel spreadsheets, right? 00:36:14.019 --> 00:36:21.379 Nothing complicated, where you're just seeing the highest level figures of the business, then you can easily diagnose your constraints, right? 00:36:21.379 --> 00:36:27.859 So the first thing we want to have in our bank account to have a cash management system is very simply we want to have an income account. 00:36:27.859 --> 00:36:30.899 Okay, so the first thing up here is your income account. 00:36:30.899 --> 00:36:32.179 Income. 00:36:32.179 --> 00:36:36.259 Then all of your invoices and everything get paid into this one income account. 00:36:36.259 --> 00:36:37.460 Everything comes in there, right? 00:36:37.460 --> 00:36:38.819 So this is basically a system. 00:36:38.819 --> 00:36:40.739 Then you're gonna have some sort of tax, right? 00:36:40.739 --> 00:36:42.179 Depending on what state you're in in the US. 00:36:42.179 --> 00:36:44.739 So let's in Australia you've got GST, right? 00:36:44.739 --> 00:36:46.339 So GST is 10%. 00:36:46.339 --> 00:36:48.659 So that's not your money, that's gonna go straight to the government. 00:36:48.659 --> 00:36:54.659 So after that, under that, you've got to take out the 10%, and then you have your real, uh, you have your real income. 00:36:54.659 --> 00:36:55.059 Okay. 00:36:55.059 --> 00:37:07.219 So in this real income account, the system that you want to employ every single Wednesday evening is when we tell our clients to do it, you go by percentage into these accounts, right? 00:37:07.219 --> 00:37:09.139 You first of all, you got your profit, right? 00:37:09.139 --> 00:37:10.979 So you take your profit out first, right? 00:37:10.979 --> 00:37:12.899 So profit first methodology. 00:37:12.899 --> 00:37:14.899 Let's just say you gotta work out your own figures. 00:37:14.899 --> 00:37:15.779 Let's say that's 10%. 00:37:15.779 --> 00:37:18.259 Then after that, you've got your owner's compensation. 00:37:18.259 --> 00:37:22.739 Owner's compensation, and then let's just say that is whatever you pay yourself, right? 00:37:22.739 --> 00:37:24.819 But let's just say it's another 10%, right? 00:37:24.819 --> 00:37:27.459 Again, you've got to work out the percentages yourself. 00:37:27.459 --> 00:37:36.739 And then after that, you've got uh you got your profits, you've got your owner's uh owner's compensation, then you have you have opex, right? 00:37:36.739 --> 00:37:40.419 Which is your operational expenses, which will be your percentage, right? 00:37:40.419 --> 00:37:44.819 And then after that, you have something called your sorry, I missed tax in there. 00:37:44.819 --> 00:37:51.059 So you have your profit, your operational, uh, your owner's compensation, then you have tax that you have to pay, right? 00:37:51.059 --> 00:37:55.139 So let's just say the taxes and put it in as 15% of your total revenue. 00:37:55.139 --> 00:38:00.099 Then you have your opex, which is the remaining percentages, and if you're good, you have a vault account at the bottom, right? 00:38:00.099 --> 00:38:06.899 So the vault account at the bottom is you're putting away 5% of it every every month, so you have money to buy equipment or whatever. 00:38:06.899 --> 00:38:11.779 Now, what ends up happening here is every Wednesday, the money comes in, you distribute it that way, right? 00:38:11.779 --> 00:38:19.459 And so you know that I need to operate my whole business on 50 or say 60% of my op-ex, right? 00:38:19.459 --> 00:38:27.699 So every your first of all, your tax is every like there's no way that you're not paying your tax because it's in a bucket of money, every single one. 00:38:27.699 --> 00:38:29.619 There are different bank accounts in your bank account. 00:38:29.619 --> 00:38:35.699 There's no way that you're not making profit because um your profit has been set aside before you even pay anyone else. 00:38:35.699 --> 00:38:40.259 And then you know that I have 67% of real income to run my business on. 00:38:40.259 --> 00:38:46.099 So if it's over that 60%, you know I need to take down my expenses, and that that alerts you to that situation. 00:38:46.099 --> 00:38:51.539 And then you also have uh your tax coverage, you have your profit covered, and then you should be growing money. 00:38:51.539 --> 00:39:06.979 Getting the percentages right is important, but ultimately that system will make sure that you don't have any issues with your tax, you don't have any issues with taking profit out of the business, and it alerts you to
the point where, hey, my overheads are too high, I need to take some overheads down. 00:39:06.979 --> 00:39:11.699 And you can see that every single Wednesday just by doing these transfers in your business. 00:39:11.699 --> 00:39:15.459 So then that's the first warning system to know that okay, I'm spending too much money. 00:39:15.539 --> 00:39:16.179 Does that make sense, Rob? 00:39:16.179 --> 00:39:17.539 Yeah, no, that makes total sense. 00:39:17.539 --> 00:39:33.619 In fact, that's uh actually I run my business, which I'm not in construction, but yeah, that is that is uh from a high level and kind of being able to understand, because you know, we have a PL, you can look at your AP, you can look at your uh your cash flow, all of those sort of reports. 00:39:33.619 --> 00:39:44.099 But if you don't have the system like you're talking about, having something like that is a tremendous way to see the business at that high level as an owner working with an accountant. 00:39:44.099 --> 00:39:47.619 I won't push too much, but I know what you're talking about with the gap. 00:39:47.619 --> 00:39:53.139 And as you get larger, especially with general contractors, but this is really like project accounting. 00:39:53.139 --> 00:39:56.019 This is really understanding if a project is getting off. 00:39:56.019 --> 00:40:03.939 When you're mentioning kind of the gap and you're mentioning the revenue and how it gets recognized, that's that's one thing with the whip. 00:40:03.939 --> 00:40:15.299 But from a project management standpoint, understanding the job costing coming in monthly, that is still important from an earned value management um process. 00:40:15.299 --> 00:40:20.739 100% because that is going to feed up into what that report you're talking about right there. 00:40:20.739 --> 00:40:26.019 That's that's how I envision it, at least when I was running, running the construction company. 00:40:26.019 --> 00:40:37.939 For me, it was I could pretty much run the business off the whip because I understood the other pieces that you're describing and could easily go into my PL and kind of understand those things. 00:40:37.939 --> 00:40:46.339 But if you're a small subcontractor, yes, this gives you that visibility about the health of the business overall. 00:40:46.339 --> 00:40:53.459 Be sure you're understanding your costing, depending on how small you are, and you know this too, like coming in on every job. 00:40:53.459 --> 00:40:57.779 Because otherwise, the the that's what you're getting, that's where the earned value management gets so important. 00:40:58.019 --> 00:40:59.379 I absolutely totally agree. 00:40:59.379 --> 00:41:00.659 But that sits under this. 00:41:00.979 --> 00:41:01.299 Exactly. 00:41:01.619 --> 00:41:01.859 Exactly. 00:41:01.859 --> 00:41:06.739 So you're all of your software should be able to do that for you. 00:41:06.739 --> 00:41:12.739 But as a business owner, looking at this is the business healthy at all as a whole? 00:41:12.739 --> 00:41:19.539 And that's I I think being able to have that high level every single Wednesday, you get to understand the flow of your business. 00:41:19.539 --> 00:41:21.859 And there's another rule that I really like. 00:41:21.859 --> 00:41:23.059 I can't remember his full name. 00:41:23.059 --> 00:41:26.259 He's an old English gentleman called Parkinson's Parkinson. 00:41:26.259 --> 00:41:28.179 Have you have you heard of Parkinson's Law? 00:41:28.179 --> 00:41:28.579 Right? 00:41:28.579 --> 00:41:35.459 So so Parkinson's Law, it's that is let's say you have a uh a project, time expands to fill the project. 00:41:35.459 --> 00:41:43.779 Okay, so his example is let's just say you have uh a pro like let's just say you're in you're back in school and you have a project due, right? 00:41:43.779 --> 00:41:46.179 And you've got six weeks to do it, right? 00:41:46.179 --> 00:41:48.419 Who spends the six weeks doing it, right? 00:41:48.419 --> 00:41:49.779 Everyone does it the night before. 00:41:49.779 --> 00:41:51.699 That's just it's just human nature, right? 00:41:51.699 --> 00:41:52.499 It just is human. 00:41:52.499 --> 00:41:54.019 So everyone does it to human nature. 00:41:54.019 --> 00:41:57.139 So his rule is if I had a week to do it, it would take me a week. 00:41:57.139 --> 00:41:59.299 If I had six weeks to do it, it'd take me six weeks. 00:41:59.299 --> 00:42:00.419 The same project, right? 00:42:00.419 --> 00:42:02.739 Because you're always just gonna do it at the end. 00:42:02.739 --> 00:42:03.459 So that's it. 00:42:03.459 --> 00:42:07.059 So the other example of that is Parkinson's law applied applied to money. 00:42:07.059 --> 00:42:12.579 Now, my example I like to give people is I remember when I was, you know, a young, a young fella, right? 00:42:12.579 --> 00:42:15.299 And I was uh out in the world broke, right? 00:42:15.299 --> 00:42:17.699 And so back in Ireland we had the Euros. 00:42:17.699 --> 00:42:28.179 And so if I was going out on a night and I managed to scrape together 20 euro, right, I would go out that night and I would I would have a great night, right? 00:42:28.179 --> 00:42:31.939 And I'd wake up the next morning, zero dollars in my pocket, right? 00:42:31.939 --> 00:42:35.619 Let and then let's just say I had a bumper, a bumper week, right? 00:42:35.619 --> 00:42:39.299 And I worked the job in a bar or something, and now I have 200 euro, right? 00:42:39.299 --> 00:42:43.379 I would go out that same night and I would have just a good time. 00:42:43.379 --> 00:42:47.379 And the next morning I wake up and there's zero dollars in my pocket, right? 00:42:47.379 --> 00:42:52.579 Which means that what I'm trying to say is whatever money you have available, you will spend. 00:42:52.579 --> 00:42:52.979 Right. 00:42:52.979 --> 00:43:03.379 So if you instantly separate the money into a profit account, your owner's oper uh owner's expenses account first, and your tax account, that's money you won't spend
because they're somewhere else. 00:43:03.379 --> 00:43:10.099 If you leave them all in one account, like a lot most people do, or they split it out, they're just gonna spend that money, and then you have no profit left at the end. 00:43:10.259 --> 00:43:10.419 Right. 00:43:10.579 --> 00:43:14.099 Or you've in the you end up in a situation um like like this go. 00:43:14.339 --> 00:43:14.899 Yeah. 00:43:14.899 --> 00:43:21.379 Well, not to give QuickBooks a uh promotion here, but that they do allow those envelopes as you're describing. 00:43:21.379 --> 00:43:32.179 So I know a lot of subcontractors use that, especially here in the States, is like you can create those envelopes and you can you can create it by those tiers that you're mentioning, and you can go through and create it by year if you want to. 00:43:32.179 --> 00:43:44.579 So there are the tools, those things are there, and as you're talking about sort of the obstacles and these things and the mental side, it's like you're showing them an easier way to think about it, to pull these apart. 00:43:44.579 --> 00:43:47.539 And I do, you know, I love these analogies you're talking about because it's true. 00:43:47.539 --> 00:44:03.859 Like as humans, it's just human nature to take till the last minute, which is why it's so difficult, I think, a lot of times to estimate how long something is going to take, because we've never really, you know, I when have we started something and just finished it within two hours and been like, well, that was a lot easier. 00:44:03.859 --> 00:44:05.459 I thought it was going to take me two months. 00:44:05.459 --> 00:44:07.299 Humans are amazing creatures. 00:44:07.299 --> 00:44:11.779 Like, we can finish something very quickly if we can focus. 00:44:11.779 --> 00:44:18.979 And again, in this world, there's a lot of attention grabbing that takes us off course, um, that draws things out as well. 00:44:18.979 --> 00:44:28.019 But can as you've doing a lot of this work over the last 10 years, you've spent your career like, you know, kind of focused here, as you mentioned before, and then your family. 00:44:28.019 --> 00:44:49.939 Like, as you're working with with all of these subtrades, like how are you and you, you know, you or anyone else that you're kind of working with, what makes it so important for the industry, and not just the subcontractor, but the industry as a whole, wherever we are, that we, you know, we do solve this problem that you're aiming to solve? 00:44:50.259 --> 00:44:52.899 It's I think it's more of a knowledge thing than anything. 00:44:52.899 --> 00:45:00.179 It's not necessarily that there's a knowledge gap on, you know, the understanding. 00:45:00.179 --> 00:45:04.819 So I think people are absolutely willing to learn all of these things of uh how to run a business. 00:45:04.819 --> 00:45:13.299 Like so ultimately, when you get to five million, you've got to understand that your construction, your output is the delivery, it's the product.
00:45:13.299 --> 00:45:14.259 Right. 00:45:14.259 --> 00:45:17.539 And the product is only one stage of the business. 00:45:17.539 --> 00:45:23.699 You still have marketing, sales, your HR, all of those different things that become into business. 00:45:23.699 --> 00:45:24.819 That's what you're running. 00:45:24.819 --> 00:45:30.899 And so it's move it's really hard in construction for the these guys to move away from construction. 00:45:30.899 --> 00:45:32.979 It's all about construction because it's not. 00:45:32.979 --> 00:45:35.059 You're you're in the business of construction. 00:45:35.059 --> 00:45:44.419 And so that understanding that that's that's there's a pivotal moment at five million that changes, and that you've got to be like, okay, I'm a business owner now. 00:45:44.419 --> 00:45:51.939 And there's a couple of different things once you understand that that is that is the truth, and you need to do that, there's different things that you can do. 00:45:51.939 --> 00:45:54.979 I've seen guys who go, that's just not me. 00:45:54.979 --> 00:45:55.459 Right? 00:45:55.459 --> 00:45:58.739 I've got a solar business, it's just just not me, right? 00:45:58.739 --> 00:46:04.739 And so you got to be humble enough to say, I can't be the I can't run this company, right? 00:46:04.739 --> 00:46:09.059 But I can run the delivery side, I can run the operations of the business. 00:46:09.059 --> 00:46:14.259 And so my role in this business, even though I'm an owner in the business, in one hat is I'm the owner of the business. 00:46:14.259 --> 00:46:21.379 The other hat is I'm in charge of operations, and I need some other one to employ that needs to run the business because that's just not my skill set. 00:46:21.379 --> 00:46:25.859 I don't know how to do marketing, I don't know how to do sales, I don't know how to do finance. 00:46:25.859 --> 00:46:34.099 I need someone else to do that and understanding, or you got to learn it and then you become that person because it's a different person than who you started off the business with. 00:46:34.979 --> 00:46:35.299 Yeah. 00:46:35.299 --> 00:46:40.339 I mean, that's a humbling moment when you're able to kind of say, like, I know my skill set. 00:46:40.339 --> 00:46:43.459 Well, I know your passion too, like as you're describing. 00:46:43.459 --> 00:47:01.539 Like if you're passionate about being in something, like you letting go of something else to get the business to take off will be far greater reward and and worth it to you than holding on because I'm not passionate about it, I don't really want to learn it, and and I want to be. 00:47:01.539 --> 00:47:02.499 Over here. 00:47:02.499 --> 00:47:05.459 Like we we do that a lot, I think as humans. 00:47:05.459 --> 00:47:10.979 Like we that's that, you know, obstacle and barriers that kind of come up is like, look, this is mine. 00:47:10.979 --> 00:47:12.819 Why would I ever release this? 00:47:12.819 --> 00:47:17.299 Well, you know, you sometimes I admit
all the time, like, hey, I'm not good at that. 00:47:17.299 --> 00:47:18.579 I don't want anything to do with it. 00:47:18.579 --> 00:47:21.059 I need to hand this off uh to someone else. 00:47:21.059 --> 00:47:21.619 100%. 00:47:21.619 --> 00:47:47.299 Once you reach, especially like you're saying, that 5 million threshold is even here in the States, like that, that once you're at that number, like you can no longer, like you're not pretending anymore, even though you're not pretending under 5 million, but you can't pretend that you don't know business or that you do know it because suddenly you're just like, it is it is a different game, not only from the size of the potential size of the projects, but the but the risk is obviously getting higher. 00:47:47.299 --> 00:48:00.899 But you can't, you you probably the quantity of projects you're doing is increasing as well, which means the paperwork is now beginning beginning to stack even more than it was before, which puts change orders even further behind. 00:48:00.899 --> 00:48:05.699 And as you mentioned before, yeah, that's dollars that's exiting the business, not going to enter. 00:48:05.699 --> 00:48:08.339 You're giving away money to a general contractor. 00:48:08.339 --> 00:48:32.499 And something else that you said too, I think it's it's it's important because again, we we we like to believe that we're built on relationships, but the contractual side has made it so contentious and so difficult for subcontractors to say that they're not going to start doing work until the con until the change order is signed. 00:48:32.499 --> 00:48:39.859 Or, you know, you get an author and notice notice to proceed or some sort of authoration, you know, and this has happened to me. 00:48:39.859 --> 00:48:44.499 You get an authorization, they tell you to go do it, and the contract says, you gotta go do it. 00:48:44.499 --> 00:48:48.579 So you go do it, and then you find out like where's when is the change order coming? 00:48:48.579 --> 00:48:49.779 And it never comes. 00:48:49.779 --> 00:48:55.139 You know, and then you so you pull the work off, next thing you know, you're in a you're in a dispute. 00:48:55.139 --> 00:49:02.659 And part of it is like no one upstream is ever going to say they're at fault for anything. 00:49:02.659 --> 00:49:06.339 Like they're never going to say, you know, this what this was our problem. 00:49:06.339 --> 00:49:09.699 They will shove every bit of it downstream. 00:49:09.699 --> 00:49:11.859 That's why it's called flow down clauses. 00:49:11.859 --> 00:49:21.939 And and again, that's why I think it's so important what what you're talking about and the teams that you're working with, that the subcontract like this we cannot build without subcontractors. 00:49:21.939 --> 00:49:24.259 So if we if we do the work, they do the work. 00:49:24.259 --> 00:49:31.539 And if we want to continue to sit and squeeze and put them out of business, like it's only going to continue to increase the cost of construction. 00:49:31.539 --> 00:49:38.019 It's going to continue to, as you said, the the timeline is just going to continue to increase. 00:49:38.019 --> 00:49:42.259 What used to take nine months to build will now be 18 or even more. 00:49:42.259 --> 00:49:45.619 And and those things, okay, fine, those are our businesses. 00:49:45.619 --> 00:49:47.699 But but we're talking about our communities. 00:49:47.699 --> 00:50:02.179 We're talking about our family members, we're talking about those that we live around, watching all of this happen and wondering like, why is this why does this take so long just to get a bridge built, a road built, a house built, um, or anything in our communities. 00:50:02.179 --> 00:50:06.819 So we do have a responsibility as humans within this industry to look at it. 00:50:06.819 --> 00:50:07.539 100%. 00:50:07.939 --> 00:50:11.619 And it let's just like if we scroll right back, right? 00:50:11.619 --> 00:50:19.699 And if you look at some of the architecture and buildings, you know, I mean, mainly around Europe, right? 00:50:19.699 --> 00:50:34.659 Um, these old churches and old castles, and I know the US obviously has some some amazing stuff as well, but I'm just saying the old like if you go back quite a period of time, right? 00:50:34.659 --> 00:50:43.459 They were able to build these beautiful, ornate, um, amazing structures, like beautiful, right? 00:50:43.459 --> 00:50:57.619 And you know, and and again, I'm looking at you know Australia here, and I recently went to uh to to Bali and they have uh a Kapinski over there, and this thing is outrageous, it is massive. 00:50:57.619 --> 00:51:05.779 And we were and at the bottom of the uh at the bottom of this thing, there is um they have a full aquarium, right? 00:51:05.779 --> 00:51:10.659 So you're eating your dinner and there's like sharks swimming around you, like all these fishes. 00:51:10.659 --> 00:51:17.219 They bring a scuba diver down in the middle, and he's he comes right beside your table and he he does something, and all the fish come around him. 00:51:17.219 --> 00:51:18.259 Like it's amazing. 00:51:18.259 --> 00:51:22.819 But I saw then I was like, okay, so they've built this thing that's amazing in Bali, right? 00:51:22.819 --> 00:51:27.139 So it's a bit I wouldn't say it's a third world country, but it's a it's a lower level country. 00:51:27.139 --> 00:51:38.179 But in Australia, there is no way they're not building that for for under a billion, and there's no way it's getting approval or can be financially viable in any way to happen. 00:51:38.179 --> 00:51:40.259 And that's like a sad state of affairs. 00:51:40.259 --> 00:51:41.059 Like, why? 00:51:41.059 --> 00:51:43.779 Because of all of these things we're talking about, right? 00:51:43.779 --> 00:51:57.539 Then we're not able to actually build amazing things because they're no longer financially viable, because they just cost too much because of all of these talks that we're talking
about, everything that we're talking about, all this red tape in the middle, you know. 00:51:57.539 --> 00:51:58.819 So yeah. 00:51:59.059 --> 00:52:01.699 Yeah, and that's you know, that's part of living, right? 00:52:01.699 --> 00:52:03.779 We want it's an experience. 00:52:03.779 --> 00:52:08.099 As you just described, like an experience that you can have while you're sitting there eating. 00:52:08.099 --> 00:52:15.699 Like those are things that we're providing you know, other humans who, you know, we want to see these structures. 00:52:15.699 --> 00:52:20.819 We uh we don't just want, you know, want things to be built because we need them. 00:52:20.819 --> 00:52:28.259 Sometimes we want, we want to have that experience, want to have that memory of walking through a space, a location, whatever it is. 00:52:28.259 --> 00:52:40.499 And and this comes back to why it's so important is that we each who are working in the industry, if you're running a business, like like there is there are ways to find help, as you said. 00:52:40.499 --> 00:52:42.819 There are ways to educate yourself. 00:52:42.819 --> 00:52:51.219 And there are people, there are ways to ask for help, which is which is the humbling piece again, because we're not good at it. 00:52:51.219 --> 00:52:54.499 Like in construction, we're not good at asking for help. 00:52:54.499 --> 00:52:56.419 That's why the spiral happens. 00:52:56.419 --> 00:53:04.739 But but if you're ever feeling that as somebody that's out there listening, like there are people to talk to, there are ways to talk through things. 00:53:04.739 --> 00:53:09.539 And it doesn't mean that you're giving, like it actually means you're taking your agency back. 00:53:09.539 --> 00:53:16.019 You're not stuck in a pattern that is allowing you to uh uh to kind of spiral into these conditions. 00:53:16.019 --> 00:53:21.459 So I guess then, you know, Kian, we we talked a little bit about what makes it so important. 00:53:21.459 --> 00:53:48.099 You hit on some of these, maybe there's more to add here, but like like what do you think the cost is of not solving this, not just like as as an individual company, because you can go through that as well, but like, you know, again, as an industry and as a as a community and as a country, because you just talked through some of it, but what other costs do you think that are impacting us by not solving these problems? 00:53:48.099 --> 00:53:49.539 It's a good question. 00:53:50.019 --> 00:54:00.819 If we go back to what we talked about before with regards to subcontractors being the only people actually doing construction, actually building, literally do moving stuff from here to there, building stuff. 00:54:00.819 --> 00:54:07.059 One is these subcontractors, they're families themselves, not gonna be as profitable. 00:54:07.059 --> 00:54:09.299 They're not gonna make money, they're gonna go out of business. 00:54:09.299 --> 00:54:20.579 And then as an industry as a whole, they're there's not gonna be, you know, we we could end up turning into a tech sort of a scenario where there's like three or four players that do all sort of that do everything. 00:54:20.579 --> 00:54:20.979 Right. 00:54:20.979 --> 00:54:22.739 And I don't think anybody wants that. 00:54:22.739 --> 00:54:30.579 Like you you gotta really appreciate the small business community where you know you're you're in a small town. 00:54:30.579 --> 00:54:34.339 I mean, you could be in a small city, but you're you're contributing to the business. 00:54:34.339 --> 00:54:45.219 Like you you want to be able to one day walk, drive by, and this is what I do, uh what I did as a kid, and like driving by in Galway, my granddad built that, my granddad built that, my granddad built that, you know what I mean? 00:54:45.219 --> 00:55:05.459 And so as an individual, you've got to sort the money side out of construction so that you can stay in business long enough that you can either uh step out operationally, or you can uh have the business that you can sell uh down the line and or you can hand it off to your kids and uh and continue that tradition um of what you've built. 00:55:05.699 --> 00:55:06.179 Yeah. 00:55:06.179 --> 00:55:09.699 Well, and that's part of the imagery of the industry. 00:55:09.699 --> 00:55:24.339 Like we there's no more or no other industry that has as much pride as the construction industry, coming from architects, designers to to the trades, you know, general contracts, we're we're always showing our work. 00:55:24.339 --> 00:55:26.659 It's it, you know, you've written a book, right? 00:55:26.659 --> 00:55:37.219 Like you think about an artist and you think about like how many people have to come together to build one building and that pride that everyone has to do it. 00:55:37.219 --> 00:55:51.779 And we can also have, as you're saying, this pride in in building a successful business, a business that that goes through our legacy that we can hand down as you're describing, you know, that you've grown up in in this industry. 00:55:51.779 --> 00:55:53.139 Like that's your legacy. 00:55:53.139 --> 00:56:00.579 We get to leave an industry, we get to leave a business that is stronger, that it's healthier, that has done great for our communities. 00:56:00.579 --> 00:56:02.099 And that's that's powerful. 00:56:02.099 --> 00:56:03.619 That's why we get into it. 00:56:03.619 --> 00:56:12.739 So it may feel like, hey, filling out that change order or spending a little extra time doing the paperwork feels like a heavier lift. 00:56:12.739 --> 00:56:14.179 You're doing those things. 00:56:14.179 --> 00:56:15.859 So what you just said, Keen, right? 00:56:15.859 --> 00:56:19.539 Like can be possible, can't be something that we all achieve. 00:56:19.539 --> 00:56:28.579 So now that you've you you've kind of gone through a lot of these uh the challenges and obstacles, you talked about sort of the problems. 00:56:28.579 --> 00:56:32.499 Like how how do you look at success
then, Kian? 00:56:32.499 --> 00:56:35.059 How you know with your the groups that you're working with? 00:56:35.059 --> 00:56:43.619 I know you you're you've got uh the subcontractors, boardroom, it's from an individual level, you know, working with the teams, but also from the industry. 00:56:43.619 --> 00:56:45.539 How do you define success? 00:56:46.019 --> 00:56:49.219 I talk a lot about virtue signaling sometimes. 00:56:49.219 --> 00:56:57.059 And you know, a lot of people say, I want to make a big difference in the world and you know, I want to build something meaningful. 00:56:57.059 --> 00:56:59.939 And so there's different levels to to it, right? 00:56:59.939 --> 00:57:04.739 I think that is a lot about that, a lot of that when people say that when they're not making enough money is virtue signaling. 00:57:04.739 --> 00:57:07.779 It's just pretending that you don't want to make more money, right? 00:57:07.779 --> 00:57:10.659 And so I think a lot of these guys got to be like, you know what? 00:57:10.659 --> 00:57:11.219 Fuck it. 00:57:11.219 --> 00:57:13.139 I I don't want to work this fucking hard. 00:57:13.139 --> 00:57:13.379 Right. 00:57:13.379 --> 00:57:17.139 I want to make a load of money, I want to be a successful company. 00:57:17.139 --> 00:57:28.819 And then once you do that, once you're making enough money, then then things change because you you've got your your own personal Maslow's hierarchy of needs, you've got your own personal stuff sorted. 00:57:28.819 --> 00:57:32.899 Uh after your own sort of personal stuff, then you then you reach outwards. 00:57:32.899 --> 00:57:38.419 And then because you also reach a point where you're already quite successful, that you don't keep pushing. 00:57:38.419 --> 00:57:43.779 And so this is where this is where it it matters because then you get comfortable and you don't want to grow anymore. 00:57:43.779 --> 00:57:55.939 And so it's it's very important to, when you get to that stage, you you have all your personal stuff is covered, you don't get any more joy out of houses or cars or whatever it is that you you want. 00:57:55.939 --> 00:58:03.059 Then to go that next stage, that's when you reach out, and that's when you're like, well, no, I want to have a mission for what I want to do with my company. 00:58:03.059 --> 00:58:23.699 And so it's helping people find like you know, what I want to do is I want to help, you know, subcontractors who are already successful get a whole lot more successful so that they can grow and help their own families, but then after they've done that, that they can um make a difference to whatever it is that they want to make a difference to in their life. 00:58:23.699 --> 00:58:27.459 So, you know, I don't think there should be one definition of success. 00:58:27.459 --> 00:58:30.579 I think a lot of these subcontractors need to define their own success. 00:58:30.579 --> 00:58:36.819 And if I can help them do that and keep them motivated to keep growing and building and getting bigger and bigger, that's what I want to do. 00:58:37.059 --> 00:58:37.299 Yeah. 00:58:37.299 --> 00:58:46.019 No, I I'm glad you said that because I think it is again, it it should have a changing definition, right? 00:58:46.019 --> 00:58:58.259 Because when we go through life, as we go through different stages and we have lived experiences, like I, you know, every 10 years for me has been a different sort of view of purpose and a view of success. 00:58:58.259 --> 00:59:18.739 So yeah, we need individuals like yourself and what you've been spending your career on realizing like the importance of the subcontractors, the importance of helping them upscale their knowledge in the business side while they're upscaling themselves, you know, and understanding like, hey, this is how we build, right? 00:59:18.739 --> 00:59:29.939 They they can go hand in hand, they can happen at the same time in order to make sure that they are able to do a lot of the things that you were mentioning uh for themselves as well as their community and their family. 00:59:29.939 --> 00:59:43.619 So I think that's a a great place to sort of wrap up, then Kian, I is there anything that I haven't asked you or or you know something you want to mention, just let people know how to find you, how to connect with you. 00:59:43.619 --> 00:59:47.059 Um go ahead and and let the let the listeners know now. 00:59:47.859 --> 00:59:50.739 No, so uh I don't think we've we've not covered anything. 00:59:50.739 --> 00:59:56.419 Just you know, for for the listeners, like awesome job getting this far into a podcast and learning. 00:59:56.419 --> 01:00:02.339 If you're the type of person who has gotten this far, I think you're the type of person that understands this stuff and you're interested in this stuff. 01:00:02.339 --> 01:00:04.419 And I think it's the right thing to be interested in. 01:00:04.419 --> 01:00:05.459 So kudos to you. 01:00:05.459 --> 01:00:08.019 And if you want help, we've got this subcontractors boardroom. 01:00:08.019 --> 01:00:11.859 You just need to go to keenbrennan.com, which is me, c-i-a-n brennan.com. 01:00:11.859 --> 01:00:15.779 And what it is is um a mastermind four times a year. 01:00:15.779 --> 01:00:30.739 We've got weekly group coaching, and we've got individual coaching with me, and we got a great community of other subcontractors who are doing a minimum of five million and are all looking to, you know, we've got guys in there doing over 50 million, uh, guys who've doubled their revenue. 01:00:30.739 --> 01:00:32.899 So it is it's a great group. 01:00:32.899 --> 01:00:47.139 Um, and I think it's it's that push from five to more that uh people need is when so you you see another guy crushing it, that it it's it really inspires you to be like, you know what, that's that's what I need to do. 01:00:47.139 --> 01:00:47.859 I need to get back. 01:00:47.859 --> 01:00:52.739 I need to I understand what actually makes me money in my business and
push really hard in that specific area. 01:00:52.979 --> 01:00:53.539 Yeah, yeah. 01:00:53.539 --> 01:01:01.299 It's when they can start to ask deeper questions and be able to work alongside a coach like you're mentioning, and and and not be not be ashamed of the questions. 01:01:01.299 --> 01:01:03.779 So like this is this should be a safe space. 01:01:03.779 --> 01:01:09.779 These are areas that they can come in and and have these conversations, hear from other people, I'm sure, as well as Keenan. 01:01:09.779 --> 01:01:11.619 So I appreciate the conversation. 01:01:11.619 --> 01:01:32.419 I'm glad that you, you know, all the work that I see you doing kind of out there and showing things on on LinkedIn, but your book and these, you know, subcontractors' boardrooms, like it's it's much needed because again, that's just this group, these individuals who are who are working in that portion of the industry, like we need you to be successful. 01:01:32.419 --> 01:01:36.419 We cannot build what we need in today's world without you. 01:01:36.419 --> 01:01:42.019 And I'm hoping that um everybody kind of checks out what what Keen has going on their quantum contracts. 01:01:42.019 --> 01:01:45.139 So, Kian, thanks for being on Activating Curiosity. 01:01:45.539 --> 01:01:46.179 My pleasure. 01:01:46.179 --> 01:01:47.379 My pleasure. 01:01:47.379 --> 01:01:50.419 Okay, so go search Keen Brennan training. 01:01:50.419 --> 01:01:57.379 I do breakdowns and videos twice a week on trying to grow your subcontracting business to 20, 30, 40 million. 01:01:57.699 --> 01:02:00.499 So that is the episode with Keen Brennan. 01:02:00.499 --> 01:02:06.339 He is the founder of Quantum Contracts and author of the Subcontractors Edge. 01:02:06.339 --> 01:02:09.619 He also does the subcontractors boardroom. 01:02:09.619 --> 01:02:14.979 His whole business is focused on helping subcontractors, as you've heard in the discussion. 01:02:14.979 --> 01:02:16.499 I think this is so critical. 01:02:16.499 --> 01:02:51.539 It's so important, having spent a career in architecture and then kind of stepping into construction and subcontracting work, like the subcontractors, especially here in the US, and it sounds like all over the all over the planet, like we just spend so much of our energy trying to have those flowdown clauses and create the tension due to, I get it, risk mitigation and everything we're supposed to be doing to protect ourselves, that we forget that we're we're trying to build a building that is required to have those subcontractors and their talent and their skill sets. 01:02:51.539 --> 01:02:56.419 That said, like we need to be focusing on our businesses as subcontractors. 01:02:56.419 --> 01:02:59.059 We need to understand what all of this means. 01:02:59.059 --> 01:03:02.899 And sometimes that's a balancing act of when do I do the paperwork? 01:03:02.899 --> 01:03:03.939 When am I building? 01:03:03.939 --> 01:03:12.499 When do I focus on these areas because I don't have time to go back into the office because so much other things are happening and so many other things are going on. 01:03:12.499 --> 01:03:33.379 So Caen gave a lot of good tips about how to look at the high level of your business and to think about those things and to be able to understand like how you're able to kind of see what is happening with the business as well as the projects and how the projects are doing from an earned value management and understanding how job costing is coming in. 01:03:33.379 --> 01:03:35.459 So I hope you enjoyed this conversation. 01:03:35.459 --> 01:03:48.419 I hope it was helpful for you, not only as a general contractor, but also as subcontractors and with anyone else in the design community to understand how important the subcontractor role is on a project. 01:03:48.419 --> 01:04:04.979 So until next time, I hope you're able to continue to go through those things in your daily lives that you're saying, hey, I want to learn more about this, I want to focus on it, I need to understand how I can improve my knowledge around it, and I want to figure out how to solve problems as it relates to those challenges. 01:04:04.979 --> 01:04:12.099 So until next time, I hope you continue to activate your curiosity as well as curiosity within others. 01:04:12.099 --> 01:04:22.099 The Activating Curiosity podcast is brought to you by Connective Consulting Group and Connective Coaching, part of the Curiosity Building Experiences. 01:04:22.099 --> 01:04:28.099 If you enjoyed today's episode, don't forget to subscribe so you'll never miss a conversation. 01:04:28.099 --> 01:04:34.099 Share the podcast with your network and help us bring more curiosity into the construction industry. 01:04:34.099 --> 01:04:37.299 Interested in becoming a guest or a sponsor? 01:04:37.299 --> 01:04:42.339 Visit us at activatingcuriosity.com for more details. 01:04:42.339 --> 01:04:45.619 Until next time, keep leading with curiosity.
Sunting transkrip