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Welcome to the Success Architect, where we don't just build homes, we build legacies. I'm your host, Kate Lewindough, custom home builder and coach. Each week I sit down with builders and entrepreneurs who are ready to connect their business, their health, and their mindset. This is where blueprints become breakthroughs. Let's get to work. Alright, what's up guys? Welcome back to the Success Architect. So today we're gonna settle up episode. We're gonna be talking about growth in the Gallatin Valley. And um the reason we want to talk about this, of course, I live in the Gallatin Valley, this is where we do business. But uh we've had a lot of change in the past, well, let's see, I've been here for uh about 33 years. But what's happening in the Gallatin Valley is happening in a lot of places in the nation. And so I want to talk about specifics of construction in R Valley, how it relates to the entire nation, and how it relates to how I run a business. And uh I hope it helps listeners. So um starting out with like when I moved to the Gallon Valley was uh 1992, my dad uh moved here to build a house for a friend of his, and it was a lot different than now. Um the construction industry specifically was very relationship-based, and that was actually hard for my dad when he first got here because there wasn't a ton of work. Um, you know, there was a recession sometime around that point, and he came here with a big job for a friend of his. And so the there was some animosity when he showed up and uh and he had to work through that, figure it out. But one of the big things that I noticed after that and watching him do business until I was about 16, was that back then this industry was based a lot on relationships. It was based on a handshake and doing what you said you were gonna do. And uh this is how reputations were built, this is how trust was built, and this is how good work got done, which is very interesting because we've come full cycle, full circle on that, and I'll talk about that. But relationships with the right trades guys got you the best quality product, relationships with the client on a handshake deal got you paid on time and got your referrals to the next house. Uh, most marketing back then, um, all the way up until I don't know, maybe 2008, was based on word of mouth. And that's just kind of how the construction industry worked. When it comes to uh transparency and technology in construction, construction's antiquated. Like that's you know, for years, we the construction industry always has been about 20 years behind the times in technology. Back then, there was less transparency because there wasn't Procore, there wasn't builder trend, there wasn't all of these softwares in order to ask for daily logs that have pictures that are posted. And if you have a client out of town, they showed up once a month and they would just come and like kind of see where progress was at, and they had to deal with that. So overall, uh not only is construction antiquated, but like back then, that's how it was. We've now progressed into more of a technology-driven environment in construction as well. Even though we're behind the times, uh a lot of technology has come into construction. It's changed how we do business, it's changed how we communicate with our clients, it's changed how we work with our trades guys, and it's changed how relationships work. So I want to talk a little bit about that. The one thing that is exciting about how business was done here 20, 30 years ago is again the relationships. And in my opinion, that has come full circle. And right now, relationships are what makes a difference in the industry. Even with the added technology, even with even with the added transparency, even with the added uh legalities and uh, you know, contracts that we now have to have with every single trades guy, with our clients. There's no longer handshake deals. I still believe that at the end of the day, to be successful in this industry, it means relationships. So going back, the biggest changes that I've seen in Bozeman. Um, you know, we've been here for 30 years. I was pretty young early on. The first big change that I saw was 2008. Obviously, it was horrific for a lot of people. And the same thing happened in Bozeman. What I saw leading up to 2008, though, was a frenzy. We had a frenzy of track home building, of practices that were subpar, and the economy got us into a point where everyone wanted to be a builder. And interestingly enough, building's really easy. Like a lot of guys in our industry right now, they got into it because they built a personal home with a builder, and they saw that, oh, like all it takes is to know the right guy and to know the or right order of operations, and I can go build a house. And so some of these guys have made a business out of it. And uh what I noticed coming up to 2008 was that there were a lot of those guys, and the quality got super subpar. And uh 2008 obviously hurt a lot of businesses, hurt a lot of people, but it was a massive reset. And with with a lot of bad things comes some good stuff. It was a reset in how homes are built, it was a reset in who is building these homes, and a reset in doing business in a fashion of, hey, we care. We care about the relationships, we care about the quality of the product, and it reset all the expectations for the market. Come again to COVID, and it was a whole different dynamic. So instead of getting a reset in the industry, COVID gave us a reset in expectations. We in Bozeman and many other areas had high net worth people moving here in droves. And with them came different attitudes, different expectations for qualities, and different expectations for transparency. A lot of people might have seen this as a bad thing, and I think it could be argued either way. I see this as a good thing because that sort of expectation has forced us to level up our game. And what I'm noticing is that the guys who are staying in business, who are being profitable in our new market, are the ones who have operating systems, who care about relationships, who care about communication, and I keep saying the word care because it's the guys who actually just care who are going to be successful. Coming out of COVID, having these expectations rising, the amount of transparency rising, and uh the need for care in our industry has led to a need for better technology. It's led to a need for better technology and better relationships. And interestingly enough, the technology I think can help with the relationships because it leads to more transparency in what we do. And that's what people are really looking for. So I want to take it back, we'll come back to that, but I want to talk about some of the biggest challenges that builders face today because it corresponds to these expectations. The big thing that we have as builders throughout history and now is that every single project is reinventing the wheel. Yes, there's track homes, there's the same homes built over and over again, and yes, that kind of becomes an assembly line. But anything beyond a home that's not being built 30 times in a row, anything that goes into something that's maybe only being built six times in a row, or a custom home, or an Uber luxury product that is being built multiple times in a row, that is reinventing the wheel every single time. And that is what makes this industry so difficult. The logistics of reinventing the wheel every time and not having an assembly line. The other challenge that I see in this scenario is that clients and anyone outside the industry expects our pricing, expects our product to all run like an assembly line. They want it fast, they want it the best quality because quality is non-negotiable, and they want it for the lowest price possible. And that's because they think of it as an assembly line, but that's not the case. Every time we're building a house, we are reinventing the wheel. And every single business is difficult. There's always nuances, there's always something to deal with. But in construction, it's one of the only businesses and products in the world that I know of where we are reinventing the wheel every single time, and there is not much of a way to create an assembly line. The last challenge that I want to talk about with building, and hopefully we can talk about some ways of fixing this, is that construction is the only business in the world where, that I know of at least, where we tell the client our cost of goods sold. So if I'm at the grocery store and I put a bunch of groceries up, bag of peas, potatoes, things like that. Let's say I have this bag of peas, and they're like, okay, this is $4.99. And I say, well, hold on a second. That's like a thousand peas in that thing. I only want 699 of them. Can we take those out of the bag? And can you only charge me $3.67? That's what happens in construction with clients. And these are the things that we deal with every day because it's part of the transparency that's expected. So, how do we deal with that? It's something that we have to deal with. And I think that because that is the standard, the way that we get past it is transparency and relationships. So there are contracts such as fixed fee contracts, um, different types of GMP contracts where yes, we don't have to show the client the cost of goods sold. And there are ways to sell this. And I highly, highly encourage builders in any niche market, any division of the market, whether it's track homes, custom homes, to do more of a fixed price structure in order to get away from this. That's not always available in every single market, or not every client will stick to that. And it's up to the builder to decide if they want to take that contract. But if you are stuck in a cost plus scenario where you are showing your cost of goods sold pricing, now it comes down to being honest, transparent, and having the relationship with the client because the clients know that a builder needs to make money. That's what we're doing. We're feeding our families. And so by having the proper transparency, the proper documentation, and being up front with the client, having a good relationship, it actually doesn't matter that you have to show your cost of goods sold because they are going to be reasonable with you if you are transparent and reasonable with them. So, a couple other things that I want to talk about in our markets that have changed, and I see this across the nation happening as well, is that the definition of luxury building in Montana has changed. And I've seen this in Colorado, Idaho. Uh, we specifically focus on luxury building. And even 10 years ago or five years ago, we mostly focused on rustic construction. There's this new push toward mountain modern and modern construction. And when we were doing just rustic stuff with heavy timbers, with a lot of wood, super big pieces of trim, and like either plaster on the walls or like a big skip trowel uh texture on the walls, it's super easy to hide imperfections. One of the things that's changed is we've now gone to this modern construction where there's no reveals. For example, we have a project where they're asking for eighth-inch reveals from drywall to cabinets, and physically it's almost impossible because when you're framing, you have an eighth inch on each piece of wood where it could expand and contract. And so it's almost impossible in order to hit those tolerances that we're being expected to hit. So that's where building has gotten more difficult in the actual product that we're putting out. The quality of the product has had to increase, in my opinion, because of these design changes. And also, in order for a builder to stay in business and to be the best in the market or grow a business where they can actually retire and uh build a business that goes beyond them. Quality is non-negotiable, but the thing that is going to change how you perform and grow your business nowadays is an add-on to the triangle. We have quality, schedule, and price. I think an add-on to this is experience. People who want to build a custom home, clients who want to build a custom home, are looking for an experience. They no longer want to fight with the builder for 18 months about every single uh every single application for payment. They don't want to fight about decisions. They want this to be as effortless of an experience as possible. And so the builders who care are going to change the triangle and they're going to add a fourth piece of it, and that is experience. The builders who come up with an experience are the ones who are going to win. This means getting ahead of processes. This means getting ahead of culture. Those are the two things that I want to talk about next. What separates a good builder from a great builder? Two things, in my opinion. Quality is not one of them because quality is an absolute non-negotiable. The two things are care and culture. Talking about care first, I believe there is an education aspect to care. So in the past, it was having experience, working on a framing crew, getting your hands dirty, and doing it like we've always done it. That's what I've always been told. And that just doesn't work anymore. Doing it like we've always been done it, always done it, does not move us forward. That's why we're stuck in this antiquated way of doing things. And that's why construction is about 20 years behind technology. So the builders who are going to be successful are the ones who care about educating themselves, about understanding wall assemblies, about understanding how the structure goes up and not just doing it how we've always done it, but making changes in order to make the product better. Continued education in this realm is one piece of caring. The other part that I talk about with care is treating every single project like it's for your own family. And I know I've said this before, but it is so amazing to me that everyone in my company, when they are working on a home, they treat it as this as if it is for their own family. This not only helps the quality because that quality is non-negotiable, but it helps the experience with the client. And that is what is going to make every builder successful. The second thing that I mentioned is culture. And this goes hand in hand with care. Culture means good relationships. It starts with good relationships within the company, everybody caring about the product that they're building and everybody communicating efficiently and as effortlessly as possible. And that helps when you have culture where everyone actually likes each other, everyone understands how to communicate with each other, and everyone understands that we're looking to create an experience for the client. Having a culture of relationships first, and I'm going to talk about that here in a moment with every with uh people outside of the company, having a culture of communication, having a culture of schedule, and having a culture of systems. This is the way that I see builders are going to be more successful and build a company that will last for the long term. In regards to building a company for the long term, we come to the question of craftsmanship. Like I said, quality is absolutely non-negotiable. But these days, a lot of guys do not want to be in the trades anymore. Our society tells us that being in the trades is not good enough. And that's why craftsmanship is slowly dying. So the way that in our company we keep craftsmanship and quality up is by relationships. By having a culture of relationships first, by having a culture of proper communication with people outside the company, our trades guys, the guys coming to do the work. Having a culture of schedule so that you're not wasting these guys' time, and having a culture of systems, a way for them to work into your company, even though they're an outside cog. The way that every builder is going to be successful is having the right relationships with the right trades guys in order to get the houses done. Because those guys are the ones who are actually doing the work. So you find a way to treat them right, you find a way to have the best relationship with them, have the right communication, understand their scheduling needs, and understand that if you have systems to for them to work into that are really easy, it's gonna make their life much easier. That I promise you is what is going to make you successful in the future as a builder. Uh last thing I want to talk about, actually, two more things, is for any young person that wants to get into the construction industry. Interestingly enough, my first thing to say is get your hands dirty. And I'm going back on what I said a little bit about this is how we've always done it. But in order to understand the future, I think you need to understand the past and how have we always done things. How do you frame a house? How do you, how does the whole thing go together? Learning from the old timers on exactly what that is is going to make you more successful in the future. And during that, you're going to learn the new ways of framing, the new ways that wood and steel and concrete go together. Getting your hands dirty is the first piece. Getting your hands dirty also helps with the relationships, interestingly enough, because it's a respect game. And we're probably never gonna get away from that. If you have actually done the work, when you become the guy pointing the finger, you're gonna have a lot more respect, and guys are actually gonna do what you tell them to do because you've been in their shoes, you've done it in the past. So that's the first thing that I would say. After you get your hands dirty and you learn everything that you can about construction before you get into running your own company or building your own houses, my next thing is start with systems. Whether you build them or you buy them from somebody else, when you're small, build in systems immediately. Don't wait until it's too late and you're big and you're trying to go backwards. Um, I've made this mistake twice now. And our current company, we are currently building systems. We have 12 people roughly on staff, and we are constantly building in systems. Now it's always great to be updating systems, but we started building in systems too late. And it's hard for people to change. Once people get into the company and they have a specific way of going about things, they don't want to change. And I promise when you add systems, it's going to change their life. So do it early, set the precedent early as you grow your company. And I promise you're going to be far more successful. Last thing for someone young, just give a shit. Like if anybody can build a house, like I said before, but not everybody gives a shit. And walking into two different houses, one from the first, one from the second, you are going to feel a difference. You can feel care in a home when you walk into it when it's fully complete, I promise you. Last thing I want to discuss today about the Gallatin Valley, but national building in general and how you can build your construction company is what responsibility do us as builders have in shaping our own community? I'm looking at this from a local lens because I believe everyone else should look at it from a local lens as well, where you live and a national lens. But I believe that everything we build, and this is something my dad used to say to me, is every home that we build should last a hundred years. And that's not meant to be poetic. That's meant to be the absolute truth and fact. If we're building anything less than this, then we are doing a disservice to ourselves, and we're doing a disservice to our community around us. The other thing that I would push everyone to focus on is workforce development. As I said, the trades are slowly dying, and I think maybe there's a cycle where they're starting to come back, but it is really hard to find good framers, good trim guys, good plumbers, good HVAC guys. And these are really great paying jobs, and we need to help guys understand that these can be fantastic career paths. And these are the guys who are putting up our communities. So we need to help develop them, help them understand that these are fantastic career paths that offer good retirement and good opportunities for their family. And with that, I guess I want to end by talking about kind of the antiquated experience of construction compared to what it is now. In the past, construction has always been seen from the outside, at least from what I've seen, as a bunch of grumpy guys running around. I have a uh I have a friend who talks about the the guy who's a framer or a plumber, and he's jumping into a crew cab truck with five other guys at 5.30 in the morning with his sack lunch, and he's driving an hour and a half up to Big Sky, and that's the guy that we are relying on to put up our $10 million houses. Now, there's nothing wrong with the guy doing that, but what is wrong is that that is the lifestyle that society and we have built into construction. What if that guy had time in the morning to hang out with his kids in order to have breakfast with them, then to go do their work and come home and have a life? What if we can design the proper experience for our clients and our trades guys and our people in order to have that balance, if you want to call it that? By changing how we go about building these houses, by changing how these guys go about their job, by changing the attitude that we have in this industry in order to create an opportunity for everyone to have some balance and a proper income, to work their butt off at the time that they are at work, and then also be able to go home and be with their family, be with their loved ones, and do the things that they need to do to stay healthy and have a great life. That's the culture shift that is going to make guys come into the trades, come into construction and want to make a career here. That's what I'm trying to do on a small scale at my company here, and I want to see that for everyone else. So I encourage everyone here who is either running a construction company or who is gonna start one, keep that in mind. We can still get work done, we can still hold schedules, we can still have the proper care and build the best houses out there at a reasonable price in a reasonable time, and we can still have a life. That is going to get guys into the trades and excited about putting up these products. That's what we're here to do. We're here to have fun, we're here to be excited, and we're here to build the absolute best houses for our communities possible. Take that for what it's worth, and uh I hope everyone here can take that to heart. Put more care into the homes that you are building, because it absolutely matters. Thanks for tuning in to the Success Architect. If today's episode helped you lay a stronger foundation for your business or your life, subscribe and share it with someone ready to do the same with theirs. You can follow me at each loendal on social for daily tips on health, wealth, and building success at last. Until next time, keep designing, keep building, and keep leveling.