Business for Builders Podcast

How This Builder Grew From $500K to $5M

• Max Peterson

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What does it actually take to grow a construction company from $500K to $5M?

In this special Episode 300, Max sits down with Scotty and Nicole from Jouge Homes to talk about the lessons, systems, mindset, and decisions that helped grow their business tenfold.

Whether you're just getting started or looking to take your company to the next level, this conversation is packed with real-world insights from builders who've done it. 🔨

After 300 episodes, Max is taking a short break from the podcast to focus on growing and building his construction business. Thanks for following along, and we'll be back soon with more episodes. 🔨 

Watch today's episode on the whiteboard --> https://www.youtube.com/playlist?list=PL76rc3DrCOMb7VM9icAOQmLodNCSZTfKf

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SPEAKER_00

Special announcement, but before I do that, on today's episode, we're gonna sit down with one of my EBA clients that I've been working with for two and a half years. We took them from 500,000 to 5 million. Now, the special announcement is episode 300 is going to be my last episode for a little while. We're gonna hit the pause button and I am gonna go and build a building company and then I'm gonna come back strong. But if you still want business coaching, I'm also doing that. Because spots are limited, first come, first served. Would love to sit with you in a strategy session just to see if we're a fit. Enjoy the episode, go build a kick-ass business. How old are you gonna be before you start to experience life like you want it? I want to tell you right now, whether you like it or not, there is a better way to do business. Hi everyone, welcome to the Business for Builders Podcast. My name is Max. I am your host. Um, good to have you in the house. Welcome to you if you're in podcast land or if you're in YouTube's villa. Great to have you along, and uh and so today, like every other episode, we want to give you some value, give you something that you can tuck under your arm and uh make your business better. Remember, it's all about more profit, better lifestyle. So today, episode 300, it's a fairly large milestone. And to celebrate this, if you're watching and listening every week, you'll know that I don't have guests on the show very often. But today, it is my pleasure to have on the show from Juge Homes in Calgary uh Nicole and Scott. Now, these guys are business partners, okay, and they both do separate jobs, so to speak, inside the company, and we're going to get down to that. But uh it's a it's it's my pleasure, my privilege to have you guys. Welcome, Nicole, welcome Scotty.

SPEAKER_01

Thank you.

SPEAKER_00

Thank you. All right, so as we previously discussed, what we want to do is is give as much value as we can to our audience. And um, you know, I've had the privilege of working with Scotty now for two and a half, three years as an EBA or an elite business advisory business coach. And um I've seen the evolution right from the Bristol Pine days, which didn't last very long, but I was starting to sort of hear about this Huge Design and this Nicole, this this Wonder Woman of design. And um, and so today, and you know, and and being in a business partnership myself, um, I was able to sort of recognise from the get-go how much value you bring to the business, Nicole. And then obviously, Scotty does what he does, and I've watched the business grow. And so, you know, I I would love to maybe get you guys to kick off one at a time. Scotty, don't talk over Nicole. I know you want to get in there, but um, but uh, I think what we want to do is if you can just give us a quick one or two minute backstory, Nicole, and how you sort of got started in the industry, perhaps, and uh, and then just give us some context, and then Scotty, I'll get the same from you. Over to you, Nicole.

SPEAKER_01

Um, my background is kind of varied. I started in land use planning, so I used to work in the planning department, and so I issued all the permits and did all the subdivision applications, and then I left that career and went into a photography business, which was very creative, and then somehow landed in design and home building, which sort of combined the technical with the pretty, and have done that now for more than 10 years, which is shocking.

SPEAKER_00

And so you launched Juge Design or Juge Studios 10 years ago?

SPEAKER_01

Zhuge Studio was launched five years ago. Um, I worked previously um for another company and then started my own with Zhuge Studio. We we started doing just design only to start. And we were doing design all over in the United States and in Canada, and then a lot of the jobs that were local, a lot of the people were asking us to recommend contractors, and we were trying to avoid that. And then we were, you know, partnering with different various people in the city and spending more time helping to project manage than just design. And so we decided at some point that it was probably time to partner up and find a decent builder.

unknown

Yeah.

SPEAKER_00

So well, so tell me about that. So how is it that you found Scott? Like, was that just a chance meeting or no?

SPEAKER_01

Scott and I worked together previously. Um and so we had worked together for a little while, and I mean I always thought Scott was great, and but we didn't it wasn't like a super long time that we worked together, but um when we reconnected, I think it was I mean, I'm I like the people part of business. And so when I when I met Scott and we reconnected, like we just we align on so many of our just our our values and and how we feel like how we want to treat our clients and how we want our name to be recognized in the kind of community, and and uh he's someone I want to hang out with, and so it seemed like an easy fit.

SPEAKER_00

Yeah, it's interesting, the yin and the yang, because um, you know, you and I both know that you know Scott loves construction, you know, and is working on his ability to be a people person, aren't you, Scotty?

SPEAKER_02

That's uh life force, yeah.

SPEAKER_00

That's my greatest challenge, Nicole, by far.

SPEAKER_01

He's a people producer.

SPEAKER_00

Where did it start for you, mate? Like the how did you get into the construction game and then right up to Bristol Pine and of course across to Zhuge?

SPEAKER_02

I think it was just growing up. He didn't really have another option. Like you just got into construction because a buddy did, and then just stuck with it for then on, kind of thing.

SPEAKER_00

It's not it's not a jail sentence, just by the way. You know, you have choices.

SPEAKER_02

Yeah, I've started in commercial and then just like started my carpentry ticket and then did one year of school and realized I was already making journeyman wage, so quit school. And then uh yeah, just started my own. I started my own company for framing, then moved on to uh Bristle Fine doing con like contractors, small rentals, that kind of thing. And then I think you put something on Instagram saying looking for a contractor, and then my wife was all over it and then messaging, messaging, messaging, and we finally linked up on a project that you just designed for. Yeah, and then the rest is history.

SPEAKER_00

So I guess every partnership has its strengths, and how how sure were you, Nicole? I'll speak to Nicole. How sure were you that this guy, Scott, was gonna not just be you know a friendly sort of guy, because he is, but someone that you could really um build a business with? Or was it a little bit fear and trepidation, like a bit unsure?

SPEAKER_01

Honestly, I'm not a person that trusts easily. I've been burned in a business before. Right, and so no, I feel like with Scott it just felt like an immediate fit. Like I said, we our values align. You know, I he's I feel like business is I mean, we all know anybody that runs a business, it's not just nine to five, it's all the time. And so I feel like when you're getting into that, you should do it with someone that you actually want to spend time with. And so Scott and I get along really well, we communicate pretty well, like it's it just felt like a fit. I wasn't worried about it.

SPEAKER_02

Look, we are the same person. And it's like everyone's like, you guys are the same, and all the time we're like, we are the same person. We're the same. How we think, what we do, it's like we're the same person.

SPEAKER_00

And I guess a lot of what interests me, Nicole, is the fact that obviously I spend an hour a week with Scott, so I kind of definitely understand that um from his point of view, but from your position, Nicole, to finally have a builder that really means that that you've entrusted with the responsibility of delivering these projects that you've designed, how has that improved your Zoo Studios or your design? Has it created efficiencies because this really is it underpins the partnership when you've got those distinct capabilities? How has that improved your because a lot of people will say, no, it's my business and I don't want to share it with anyone. But I I think you can 10x the business by splitting checks. How has it improved your life as a designer having sort of Scott doing what he does and doing it so well?

SPEAKER_01

Well, I feel like when we are doing these really high-end luxury designs, like it's sometimes years worth of work that goes into thinking about every detail and going back and forth with clients and and it's it's hard. And then oftentimes when you end up at the build phase, something gets difficult on site and there's corners that are cut, and no one understands that that affects 50 things down the line. And so with Scott, he doesn't cut corners, he understands how important the the design is and making sure that the clients end up receiving exactly what they understood that they were getting. And so we have the same understanding of what our expectations are from start to finish in the project. So there's ups and downs throughout that process, but ultimately we're aligned on what we expect to be able to provide for our clients, and that is makes it easy.

SPEAKER_00

Yeah. Now, Scott, I'm gonna ask you a rhetorical question because I kind of know where you're gonna be going with this. But as a builder in you know, pre-Zuge or pre-Nicole in this you know situation, what what's it done for your building life other than overload you? Because we're gonna talk about the power of brand here pretty shortly. Um, and so what does it do for you as a builder to have someone like Nicole, you know, on the team or walking beside you? How does it improve your potential as a builder to grow a business? How does it make your life better? Be nice. Yeah, right. What is it just give us some insight there because this is a unique situation. I've recognized it from the start. I'm very inspired by what you guys do. But as a builder, Scott, having someone like Nicole, you know, beside you, what is that what does that allow you to do? Is there freedoms there? Is there challenges as well? Like, what is it? How does your you function in this relationship?

SPEAKER_02

Yeah, it's like uh right off the top, it's like the first thing is like we've started this company and it just exploded like way too quick. Like it was like, hey, should we let's start this company? We're gonna do one or two jobs, and then it was like work till 2028.

SPEAKER_01

Like it's in I think he's looking for positives.

SPEAKER_00

Well, I'm I'm looking for real, and and that is that is exactly I I mean, I know that I saw it.

SPEAKER_02

I don't I had a front row seat, even like how you guys started doing plans, and then it's like we can work together instead of like uh you have some designers that you work with as you and no max, like it's like you they you start blaming each other, or it's like, oh, I designed this, they didn't do it. It's like we're working together to get this project like to be exactly what the client wants. So it's like there's instead of playing the blame game, we're just figuring out how we make this happen.

SPEAKER_00

Right. So if I was ever asked you, had have there been any disagreements between you guys? And if so, I've never disagreed with you.

SPEAKER_01

Never.

SPEAKER_00

Wow, okay.

SPEAKER_01

Yeah, there has been disagreements. Yes, there has.

SPEAKER_00

Is it uh I I guess depending on the personality types and what I feel, because um having having gotten to know Scotty over the last two or three years, seeing your career, Nicole, um, from a design standpoint, there's a high level, I think, of security individually. And I think when you bring that together, and I think there's a high level of confidence in the room, and at the same time, you know, you're very sort of uh good at what you do from a skills or a technician standpoint, and I think there's a lot of magic in that if you can identify because people don't understand why relationships work and don't work, and so you know, is it a bit lucky? Possibly, there's a little bit, but there's good chemistry too, and that helps a lot. Okay, so let's talk about brand because you know, obviously, like every other builder, the brand that us builders come up with normally has got our name on it, right? And we're so proud of it, but it really doesn't mean much to the marketplace, and a lot of it, and here's a loaded question so Scotty, how's your Instagram page doing? That's exactly, and that that is that is why, you know, it's so powerful because Zhuz is definitely a brand. You know, it's got a lot of interaction, you know, a lot of good content and things like that. And so, you know, when we're talking about the brand before buildings, it's it's why I think a lot of builders struggle because they're like, well, I'm a really good builder. Scott's a really good carpenter, but if we've got nothing to nobody to talk to and nothing to build, we don't have a business. And so, how important is it for you guys, along you know, in the design excellence side of things, to really be what do you guys do to protect the brand? And more importantly, the the reputation management? Is that something you talk about or is it just something that's yeah, because that's if if we don't have a brand as builders, then the secret source is kind of have a brand. Well, now you've got a brand like Zouj. What is it that you find you have to do because now you've established that, now you've got to protect that. What measures do you take? What are some of the challenges in protecting that brand reputation? I would say quality.

SPEAKER_01

Yep. Quality is a big one for sure. I think that we made a conscious decision early on to limit the number of projects that we take on. Um which we've done a medium job at, but we are still doing it.

SPEAKER_00

I was gonna ask you, so how's that going booking into 2028?

SPEAKER_01

I don't need you to call me out quite yet, but um, I think that that's important. Like we're selective with our clientele, um, but we're also we don't appeal to everyone. And I love I love that. Like we aren't trying to get everybody's business, we don't appeal to everyone. Our process is what our process is.

SPEAKER_00

Good.

SPEAKER_01

And we we don't really adjust it because that is kind of our magic sauce. And anyone that has gone through start to finish from design through to getting their keys, the conversations are all very similar about how seamless the process was and how the communication was easy. And those aren't conversations that you hear often from people that are doing projects at our scale. And so we have built, we we kind of have a Jujams website, but we're just we're pretty chill on that. Most of our clientele has come by word of mouth. We've tried to grow in a smart way. Um, but those are all things that I think keep our brand safe. We're active.

SPEAKER_00

And so from a from you know, a lot of what you're talking about is what you facilitated, Nicole, because it's what builders uh second only to marketing, they don't have an established sales process. Uh, they don't have a well-defined client avatar, you know, and they will do anything from industrial to commercial to retail to new homes to rent. It's whatever. And I just think that waters down the brand. And so, you know, it's it's interesting that you would give that opinion because that's going to be an epiphany to some builders out there, because what you're doing is really shining a light on them saying, Well, if you're not doing this, this is why you don't have a brand like Zhuge.

SPEAKER_01

I mean, that's easy to say. Whenever anybody gets slow, you start to take on panic clients, and you're like, should I, should I, should I? And so I think those are the conversations where Scott and I have to check ourselves and and we're like, okay, does this align with where we want to end up being? And then we make those choices according to those kind of standards that we've set for the business together.

SPEAKER_00

So, how much conversation goes into that when you get a new inquiry? Um, how much conversation do you have with Scott before you make that call? Is that a joint qualification process or this is you make the call as to whether they're a suit?

SPEAKER_01

No, it's it's joint, absolutely. Like there's conversations that happen preliminarily through myself to ensure that they're first a due studio client for design. And then after that, if they want to proceed with a design build kind of concept, then Scott and I get involved to understand, you know, if it's gonna work with timelines, if it's a fit for our trades, if it's a fit for Scott. Like there's lots of conversation.

SPEAKER_02

Depends on my mood.

SPEAKER_01

It does how that conversation Tuesday at like two o'clock, I'm allowed to talk.

SPEAKER_02

Yeah, if I'm in the thick of it, it's just no.

SPEAKER_01

No, I know.

SPEAKER_00

It's kind of like it's a Scott, is he happy or is he hostile?

SPEAKER_01

You know, it sort of depends.

SPEAKER_00

I'm a princess.

SPEAKER_01

Yeah, there's a bit of that.

SPEAKER_00

So, Scott, with what Nicole has done with Zhuge and and obviously her focus on um, you know, delivering that value to the client so the brand actually lives up to that which is talked about. What what do you think your magic source is in the construction side? Because we've had lots of conversation around human resource. It's your favorite subject, I'm sure of it. Um, but what do you and you know, I think we've had there's always good and bad. How what do you do to ensure that the network of trades and suppliers that you embrace in the construction process are complementary to that which is being done in the pre-construction? What what what can you can you just speak to that? I mean, you just give us your opinion around because it'll be all it'll be very intuitive. It won't be like, well, I've got a checklist. I doubt it's that. I'm pretty sure I know it's that.

SPEAKER_02

Yeah, yeah, it's definitely not that. We've talked about a checklist. I would say yeah, it's like our just our team, our like our trade base so tight and like everyone's so like everyone's friends, like the plumber will call the electrician who calls the H. Like everyone, like they'll book team meetings like on site with all the trades without and they're like, we're just trying to get this together, and then like our just our uh entire trade base is just so good that it's like we can't really go wrong with them. I can't eventually we'll need more because we're growing, but the crew we have, like everyone that works with us, like our trade partners, are all the secrets.

SPEAKER_01

And super proud. Like it's really cute how proud they all are at the end, and like you'll see them around town wearing juge gear. Yeah, they all want it. Yeah, and then you know, when it's when our projects are complete, we always get these like really mushy emails and stuff from trades just saying thank you for letting us be involved. And so the whole process feels really like a family, it's nice.

SPEAKER_02

And a lot of the trades like they like you undersold the brand because it's like the design of it is amazing. So it's like all these trades want to work with us because it's like these amazing designs, these amazing houses that everyone's like proud, like at the end, every single person's proud of what they did. It's not like let's get this fucking house done and like move on. It's like everyone is proud of what they did.

SPEAKER_00

So one, yeah, go ahead, Nicole.

SPEAKER_01

No, I was just saying it's cute. It always makes me smile at the end when everybody feels so proud. I'm like, well, I'm gonna do that.

SPEAKER_02

I know all the text you get.

SPEAKER_00

So what do you what do you do in the way of mostly well it could relate to supplies as well, but trades, you know, because I've personally had situations whereby I've had a trade and I'm like, I'm not if if he's the last tradesperson of that vocation, I'm not hiring him ever again. And then there's some guys that I I think, yep, they drop the ball, but they're not a bad human. I wonder if giving him a second chance is worth the investment. Give us your view on that, Scott. Like, you know, I know you're pretty, you know, categoric in your approach to building a team, but just speak to that. Do you give guys a second chance, or it's just off with the head, move on, bury the body, and go, go get someone else?

SPEAKER_02

Option two, for sure. It depends, yeah. Like I think suppliers are a little different. Like our trade team that we have now isn't like our first crack in it. We've gone through a lot to get where we are now. So it's like the team we've built has been over many, many years.

SPEAKER_00

So and that's key. That's an interesting point because a lot of guys, me included, you know, we've only been at this now as a general for for two years, and you know, we are building and rebuilding the Coldstream Dream Team. It's it's a con it's a moving target all the time, but it's only two years. So, you know, but I you know, I think you've got to be that hire quickly, fire quickly if they don't really live up to it. And I think to your point, Nicole, about core values, I I think there's got to be um the culture of the company in line with the core values, which really is a byproduct. So they you just know if they're a cultural fit or if they're not, and that's probably the determining factor. No, that individual is never going to be a cultural fit because they don't share the same values, and yet these guys over here that maybe drop the ball. They might get a second chance because they're more of a cultural fit. So, yeah, interesting, you know. So, Scotty, I think you need to just take it easy on some of these guys because maybe they're worth another shot.

SPEAKER_02

I did give one person a second chance.

SPEAKER_00

How'd that work out?

SPEAKER_01

You did.

SPEAKER_02

And they came through it.

SPEAKER_01

They did.

SPEAKER_02

Yeah, so.

SPEAKER_00

Less than let's talk about what builders, because obviously the majority of our audience is going to be builders, right? So, what's one thing that builders consistently underestimate, Nicole, about customer service? Now I'm sure you've got about a book's worth of information to come out of your mouth about now. But what are one or two things with it, builders, based on your purview, what you see in design and that phase, and now what you are very familiar with on the construction side, what are one or two things that builders just don't, they lack the awareness. They don't even know what they don't know.

SPEAKER_01

I think from coming from a design build perspective, I think, especially with again, like the level of client that we're working with and the level of detail and and stuff, like I said, these projects can take a year or two years to get through to the design phase. And at every point, we have had multiple meetings and conversations with clients. And so when there is something, because it's inevitable that something is going to happen on site that doesn't align or there needs to be a discussion or a change, that is a big deal when you know, when we have already gone through this a thousand times with the client. And so I think having a willingness to like really look at it and find a solution that aligns best for the client and not necessarily the easiest way out. Um, we were privy to a lot of that happening, and that was where we got very frustrated working outside of Scott without Scott is like, you know, we would show up on site sometimes and we were like, Are you kidding? Like that why did this happen? And it was like the simplest path to completion. And so that's a that's a huge one that I think is a big deal. Um, I think just ensuring that the final product is what the clients are expecting, but more what what we would be proud to hand over, and there's no corners cut. I that's important.

SPEAKER_00

So, you know, I think it's this combination, this blend between, you know, high level of communication. Because I think everything is a byproduct of communication, good and bad, but then at the same time, you've got to have a high level of craftsmanship. And I think what's in the room today is a good example where you've got your ability because it's you know, we've just we've got a job at the moment where the client came in and saw the shiplap painted around the fireplace, and it was like not it was in real life now, and she'd seen it on the design concepts, but in real life, it actually they were both taken aback, and so at that moment in time, there was a the craftsmanship was okay, but the communication now had to be on point because I need to see how destable the client was and whether they're committed. So immediately I'm like, we can do whatever you want if you want to change the colour. So I talked to the designer, I said, This is what's happening, give me some give me some greys and blues because this is not going down too well. So the craftsmanship was good, but without good communication, that can create that tense point where the client, and I guess how often have you seen clients, and you might see this all the time, where they just go, We want to do a renew, but we have no idea. How often do you get that?

SPEAKER_01

All the time. I think that is also one of the things that is great, is like with with our sort of concept, the clients only ever speak to us. So from the first day, like if something happens on site, Scott doesn't have to call the client, he doesn't have to get involved in all of that. He calls us, and we know the 30,000 conversations that have happened prior to it getting to Scott's plate, and so we know how to navigate the client in the proper way to keep the peace or fix it or or whatever. And so there's so much value in having all of those conversations with the clients before. And so to throw Scott in there to let him do communication would be wild. And so the clients get to like have one point of communication from contract sign to keys, which is wicked.

SPEAKER_00

Yeah. And I think you know, going back to your point about where builders want to just take the shortest route from A to Z, you know, it intuitively in me was like, I've got a time out on construction because I've got to help the client get through this little bit of confusion or the bottleneck. And I could have said to the client, Well, you sign, you sign the specifications, you made the sorry, like, and all of a sudden you've got this rift now between, and because the the client's emotionally disturbed, right? Because they're a little bit unsettled. And I think you know, what I see or hear from you, Nicole, what I see with Scott is that we're almost prepared to do whatever it takes to keep the client satisfied, maybe not happy all the time.

SPEAKER_01

Yeah, that is true. I think the other important thing is that over the time that we've gone through the design, we've spent all that time building a very high level of trust with the client.

SPEAKER_03

Sure.

SPEAKER_01

So by the time we get to construction, they're coming at us from a place where they already trust us to do a good job. We haven't handed a design over to someone new, and then they have to build trust all over again. So if there is something that happens on site, which which is kind of inevitable with some of the projects that we do, it's not such a blow because we've established trust already with the client.

SPEAKER_00

So talk to me about your pre-construction process because uh seeing what I see in the coaching world, talking to a bunch of builders and being in and around it, like everyone's got their take on how they would handle a client from the first phone call right through to contract. So I guess I could talk about, I could ask you to clarify the way you qualify, but that's very specific. So I'm not sure that's gonna help anyone. I just know this you've got to come up with what do you like to build the most, what sort of clients do you like to work with, what's your price point, all that sort of stuff. But how do you not just in one conversation, Nicole, but throughout the process, set the client expect expectations as you get closer into commencement of construction? Like, is there things that are on the peripheral alongside your design avenue that you are educating, that you're informing, that you're conditioning almost? Is can you speak to that?

SPEAKER_01

Yeah, there I mean there's a lot of that that happens. I think the biggest thing that we've established with within our company is that every single selection is required to be made prior to frame complete. And so that I think we have we have established phases that they're required to make selections in, and the phases follow a build schedule, and so we and we they can't decide on what chandelier they want if they haven't decided on what plumbing fixtures and rough ins we need. So people get bogged down in the details, and so we we make them make these decisions in phases, and so the things that Scott needs on site are decided first, and we go through this phasing, and so it's it helps the client from becoming overwhelmed with all of the millions of selections that they need to make, but also it keeps our construction schedule moving, and nothing gets held up with you know, something that they just can't decide on. Like we don't let them move on to the next set of decisions until they have signed off on the first ones, and so we're we're really good at keeping them on a path. The communication is very clear and expectations are set, and so they know it's not just that they get to expect things from us, we have expectations of the clients throughout the process as well. And we speak to that a lot in our communication, even in how we do our weekly updates and and things like that. So it's there's tons of it's communication, is it's constant, it's wild.

SPEAKER_00

Yeah, I think what's powerful about what you just shared is that you recognize from the get-go that one, most people don't have really any design concept. And then because of that, the way you cater to that is you set a deadline, but then you layer it in accordance, like you triage, you prioritize. And so, you know, I think that, you know, as much as us builders, me and Scotty, have this way that, right, this is how we do. If we're going to do a new home, we start with excavation, then we do footings, and like we've got a very segmented approach where we don't put the carp before the horse. I think that builders naively don't understand that the that same sort of segmented approach must be applied to the design phase, the pre-construction phase. And I find that intriguing because to me that's that is like it's a it's another trade. It's a nut, it's a it's literally art form because most builders would be like, I don't know, just just tell me what colours and I'll go build it, you know. And so they just brush, ha ha ha, look at that. So they just brush over and they don't take seriously how good it is if they do a lot of work in the beginning in the design phase, how the positive impact is made on the construction side, both for the builder and for the client, you know. So uh yeah, it's interesting that now. Do you can you speak to what Zouge does? Now remember, let me ask you this, just to set the foundation, and I kind of know the answer to this, but is is there a minimum project size from a revenue standpoint that you just go, that's our cutoff, we don't go below that? And I say that because I'm I know the other side of it. So, like when a client rings you and says, Hey, I want to do a $200,000 basement remodel, not a previous client, but a brand new inquiry, um, is that something that you entertain?

SPEAKER_01

No, we don't. I think the way that we manage that too is because we tend to be mostly design build, is that the design studio portion of Zouj has a minimum.

SPEAKER_00

Yes.

SPEAKER_01

And so it doesn't matter what we're designing, it's gonna be this is our minimum design fee. And so oftentimes what that does is it doesn't align with a smaller scale of construction, and so that helps to kind of weed out the clients that maybe aren't a fit for us.

SPEAKER_00

We like to say disqualify, weed out's a bit harsh. So can you give me, based on because Scott sent me a message yesterday going, oh we've got to push back this this uh podcast recording because of this? So over the last say 12 months or two years, can you give me, and this will give our viewers and our audience a really good understanding of where Zhuzh is at. What do you think your average contract value is? Like just take two minutes, two seconds.

SPEAKER_01

We're not really doing much of under a million these days.

SPEAKER_02

Yeah, it's our average across is probably like 1.2, 1.3 kind of thing.

SPEAKER_00

So that's conservative. An average of a million, like to me, that would be undercooking it, I think, based on what I've seen and heard.

SPEAKER_01

Yeah, that's like I don't think I'm trying to be respectful.

SPEAKER_02

Yeah, minus uh we're getting that basement. But it's that's like usually like it's more than that.

SPEAKER_00

Yeah, like we've we're doing, we just started a job today for a client that we've done four jobs previous, you know, garage editions and all kinds of stuff. And they're grandfathered in, like, you know, as long as I don't fail the attitude test, yeah, we'll come back and we'll go with the rates that we had two years ago. Um, but new stuff coming through. So let me ask you this. So let's go to what's that?

SPEAKER_01

Average is probably two million.

SPEAKER_00

Right, there you go.

SPEAKER_01

I was only a million off.

SPEAKER_00

Uh we call it a humble brag, Nicole. It's okay. I mean, it's it's we're in a world of mostly male-dominated, you know, businesses. So uh we want to show them up, make them feel a bit bad. Uh tell me a little bit about the the financial obligations or the financial requirements throughout that segmented design phase. Can you can you allude to, because this is going to blow a lot of builders away, what you guys do. As far as the kind of financial commitment, interestingly enough, something that Scotty and I talked about recently was if you want your spot next year in 2027. So I would love it if you could just, you know, neatly, uh humbly just speak to, okay, you're a you're a client that's got a 1.5 million, I'm a client, 1.5 million. What is the what what is the cost roughly in the design phase and how do you roll those out? Can you just give us a bit of an overview of that, of your process financially?

SPEAKER_01

I mean it didn't do it.

SPEAKER_00

Well, is there you're talking design or design? Well, you know, from from the first inquiry, and they've you know right through to the contract. So I'm not talking about stage claims during during the build, because you know, what we find is a lot of the audience that we're speaking to today will go and do quotes for free. Being there, we've all done that, right? But as part of your qualification process with that very specific avatar, it's not kind of like you're trying to win any fans. It's like you said before, this is our process. So share with the audience if you can, if you can't, just tell me what what is how do you is it a percentage of the overall forecast build that you think that job is, and you just break that down into percentages during the design side? How do you break the design phase down?

SPEAKER_01

So I guess I guess it when when a client approaches us to be a part and want to be a part of Zuge Homes, um, we are booking quite a ways out for construction. And so prior to design even starting, they have to enter into a construction agreement with us before we've even designed anything. So they give us a non-refundable deposit to get into the queue for construction. Um, and it's usually into the queue for design as well. We schedule that and then um we get started on design. Design fees for us vary greatly because we base it on scope of work, um, not necessarily square footage. A lot of our clients, you know, we may do a 2,000 square foot house that is worth more than a 5,000 square foot house because of the level of detail and things that the clients require. So our design fees are based on scope of work. Um, but once that's provided, then we design the entire project, and then the entire project is signed off on by the client, and then it's priced. Um then we present the price to them and then we go. But they're already in a construction contract with that, which only guarantees a spot in construction, and that we will price the job.

SPEAKER_00

And just for our audience at home, that non-refundable deposit will hold your position is five figures. So, you know, it's you know, it's I think you've the reason that you're in the room talking like this is one, you've got a very well-defined system, you know what you're worth, your brand. And so beyond that, it's now a case of well, we've got to make sure that the the time that we invest in any client is reciprocated and respected.

SPEAKER_01

And so yeah, and most of our clientele that's come into us at this point, they respond to that.

SPEAKER_00

Yeah, right. There you go.

SPEAKER_01

You know, like they no one is like even hiring a designer at this point, this is a luxury service from the go. Like growing up, my parents never hired a designer. That wasn't like a lifestyle that we had, you know. It is it's it's a luxury opportunity. And so I think from the beginning, like we always used to talk about the idea of like when you go in and buy like a I don't want to say anything, but like a lower level vehicle versus you go in and buy like a Bentley or a Range Rover or something, you know, there's not negotiation that happens when you go into to Range Rover. You pay what sticker prices often and you leave feeling more comfortable with that, with whereas some of the lower budget things, it's all you never feel like you got the best deal because you don't, there's so much negotiation and all of that. And so we live in the other world where it's like, here's your cost, this is we've this is the fixed cost of it, we've priced everything out. Here it is. It's very clear, it's very straightforward, and and our clients appreciate that, and it feels like a luxury brand from start to finish.

SPEAKER_00

Interesting because you're right. If I went to my Porsche dealer in Kelowna and started started to try and do him down on a you know 9-11 GDR, you'd be like, What are you doing here?

SPEAKER_01

Yeah, like someone will walk in tomorrow and pay sticker. So get it.

SPEAKER_00

There's a bow tie dealership down the road. You should go and try that out on them. Yeah, and look, and I think that comes back to your level of uh security in what you know represents value to the right client. Because, like you said before, sometimes there's a misalignment and it just will never work. It doesn't matter how hard you push, it will never work. So I think that's got a lot to do with what you do on social media around what you do in the design phase and um you know, I don't know, client testimonials. Do you does do you you get those or you just get emails?

SPEAKER_01

We just get emails. We've had a couple people that have have done it, but I mean, I don't know that the I I don't feel like there's a ton of value in putting that stuff up online. I think the the bigger value is when the testimonial goes from client to new client.

SPEAKER_00

Yeah, true. All right, Scotty, let's talk about because this is really what you and I have been like deep in for a long time is going from um being a uh a builder to versus being a business owner of a building company, and it is the struggle that I have as an advisor, is that you know, moving the mindset from I'm really good as a technician to now I've got to start thinking people ask me what I do is I say I work in sales, procurement, and business administration. Yeah, but what do you do? Oh I I run a building company, you know, and so Scott, for all of the the builders out there that maybe just getting started or have been in it 20 years and just can't crack it, can you just share with the audience the evolution that you've gone through right from good old markup and margin and the the the you know the the epiphanies along the way where you start and we talk a lot about and we're gonna move into some leadership here if we've got time. I don't know if we'll have time, but um, you know, for you as a business owner, we've talked a lot lately about leadership, like controlling more and doing less. So I've got to have systems and people, but I can't keep going down there and and obviously, Nicole, how many have you got in your office there, Nicole?

SPEAKER_01

One, four, there's four.

SPEAKER_00

So, you know, with Scott, we've got obviously a network of subtrades, but we we kind of don't have anyone that's sort of helping out Scotty. So this is what we're working on. So, Scott, talk to me about real prick, real quick, quick, about your journey as a from a carpenter to a business owner. You know, what is it that you know now that you had no clue even existed, and how it's been important to you to start to develop? Because I mean none of us arrived yet. Nicole's arrived, she's gangster, but as far as you and me and Scott, we've still got work, we're work in progress.

SPEAKER_02

Yeah, I would say it's like the amount of things we've talked about, like systems, processes, this, this, this, it's like until you need it. It's like you could talk to me about a million things, but it's like talking about the org chart and hiring people, and then now it's like, oh shit, now it makes sense what we talked about two years ago. So it's just like until it's like you learn as you go. Like I feel like every month I look back and I'm like, how was I operating that way? Like it's like you're just always evolving, like moving so quick.

SPEAKER_00

So it's like And one thing I would say, Scott, is you know, and I've said this to you before, is that you're a very good student of the business. I mean, he's a prolific note taker, which I send him two pages of notes after the uh every session.

SPEAKER_02

I'm like, I got four, buddy, don't worry.

SPEAKER_00

So, you know, I think there's there's a lot of things, there's a lot of you know, really important points in this in this podcast for builders to take note of because it's like when you're trying to solve a Rubik's Cube, you don't just go and say, right, I'm gonna get the green side and then the yellow and then the red and then the blue. You're kind of working on all of these irons in the fire, let's say, at once. And so you've got to be looking, you've got your peripheral vision has got to be good. You you've got to be working on this today, but keeping an eye on things left and right and keep bringing them up as well, because if they fall behind, the business suffers. So, at what point did you realize that leadership becomes more important, Scott, than your technical capability? Was that something recently, do you think?

SPEAKER_02

When I have a little hessifit, and then after I'm like, fuck. I probably shouldn't have done that.

SPEAKER_00

Yeah, I guess what you're alluding to is that there's a lot of or to my audience, let's just talk, me and the audience for a second, there's only a couple of us. It's like you know, there's Nicole seems to be a very calming influence, um, and has probably has slightly, slightly better people skills, perhaps. But, you know, I think you know, Scotty is he's he's full of horsepower when it comes to getting the job done, and his work ethic is is uh is substantial, it's admirable. Right, so um boy, oh boy, that hour went pretty quick, didn't it? Um so what am I gonna talk about now? What about strategic growth? Is there a point? And I talk about the I talk to Scotty. Because in the business process, you're either in an expansion mode or you're in a consolidation mode. And consolidation just means what, Scott? To make strong that which you have. Where what I've seen over the last 12 or 15 months with Juge has just been expansion, expansion, expansion, expansion. At what point do you think you guys are gonna maybe hit the pause button? Um, and of course it's interesting. Are you booking it to 2028? Is that what you said?

SPEAKER_03

Just about 2027.

SPEAKER_00

Interesting. So you've got slots, you know what your capacity is per year. So you're like, well, if you don't get in now, there's only one spot left, you're going to 2028. Right. And so is there like we Scott and I kick around revenue targets and we talk about because it's really happening fairly organically to you guys. And so that is good, but at the same time, as a business coach, I'm pumping the brakes going, mate, do you realize what happens when you're a $10 million business? Do you have any idea? You know, I mean, Scott's not green, but as far as this size of business, it's a little bit over his head. Would you agree, Scott, or is that a bit harsh?

SPEAKER_02

I was no, like going from 800,000 a year to five million a year was uh like in one year, is that right? See?

SPEAKER_00

So that's why I get nervous as much as I love what's happening. What I'm doing is if I don't pump the brakes and and try to get some reason there, you can destroy the human because we're not robots. Maybe Nicole is, but you know, us us little humble builders. And so, you know, what I find, and you guys might be able to speak to this, how important is it for you, Nicole and you, Scott, to keep an eye on your own level of fatigue professionally?

SPEAKER_01

We don't.

SPEAKER_02

I was gonna say I was like, I made I feel like I've been at that, like what is the fatigue right now?

SPEAKER_01

I think like we we started the business and we were, I think at the beginning we thought, oh my god, I wonder if we can get five whole projects. And then that took about a second and a half, and so we I feel like we have grown quickly, but we also have established where you know where we need to cut it off, and so we've started trying to stagger as much as we can as far as new starts and and things like that. But I I think that there's processes in place, but because the every house that we do, because we do such large-scale renovations sometimes, and then we do new builds, it's just it's evolving and everything needs something different. I in my previous life, it was only new builds, which was so easy. You had a process, you did the same thing over and over again. It's not rocket science, you can do it. These like really extensive large-scale renovations are like a whole other beast. And so we're we're navigating.

SPEAKER_00

Yeah, I think builders naturally think, well, if I was doing five million a year, I would have made it and I would be so much happier. But the higher you rise, the sharper the knives, you know, like it's there's always something where you'll break a ceiling and then you'll have something else that you've got to then, you know, really um navigate through, which is brand new. You haven't had to do that before. So I think the the romance around a big revenue number, I think it can be misunderstood. You know, I really don't think I think organic growth, and I think this is where you guys, with the growth trajectory that you're on, it really comes down to just pumping the brakes. Like you say, we've got one slot left. Now you want to spot, it's gonna be this much money, this is what we do, and I think that will slow down the revenue trajectory, but what it'll do is it'll give you back control, and so if you don't have um control, what you've got is disorder, and therefore you're gonna have chaos, and nothing's worse than having chaos in your building company.

SPEAKER_01

Yes, chaos is better.

SPEAKER_00

No, we talked about this, Scott. We understand that you in you enjoy intensity, I get it. But not chaos, okay? I know you love deadlines and you love a challenge, I get that, but nobody enjoys chaos, not for a long time anyway. Let me ask you this. This is going to be a little bit of a chat, quick chat around the business coaching side of things, and obviously, if you weren't somewhat satisfied with you know what we were doing, you wouldn't we we wouldn't be in this room. Um, what made you to decide decide, and I think it was pre-jused to go into invest in business coaching.

SPEAKER_02

Yeah, I think it was like I was growing my business at the time in Bristol, and it was just that thing going from a carpenter to a business owner, you're like, I really don't know what I'm doing. So it's like just having some type of mentor to kind of like bounce ideas off of or have the hands. Like if like there's been times I've called you where I'm like, listen, this is what's going on. And we're like, you just need the advice every now and then.

SPEAKER_00

Sometimes what I hear too is that you know the answer, you just gotta get it out of your system. And it is that soundboard, you know, it's just and then of course we chat about it and we strategize, and yeah, I think it's working through those issues.

SPEAKER_02

I don't think I know the image forever. It's like I probably have ten different answers. I just gotta figure out which one's right.

SPEAKER_00

So what are you and what are you working on at the moment, Scott? Where do you think your your your biggest focus is, you know, as a business leader in conjunction with Nicole, what do you think you're focusing on the most? Well, we did just talk about fatigue.

SPEAKER_02

Uh right now, just building a team, really. Okay, I think that's kind of where we're like we're booked to 2020 end of whatever it is. One slot. But it's like if we can hire a team and like get the right people and we can take on more.

SPEAKER_03

If we want to.

SPEAKER_02

Yeah.

SPEAKER_00

Um, Scotty, if another builder was on the fence about business coaching, what would you say to him?

SPEAKER_02

Just do it. Nike. Yeah, I think everyone needs like a mentor or like someone that's like knows more than you do. You can't really you're not gonna figure everything out on your own. Like ChatGBT can only do so much. Like you need someone with real world experience that can be like even there's sometimes that I feel like what we do is like therapy. Like it's like, oh, this is what I'm dealing with the client. You're like, oh well, calm down, buddy. Yeah, that's yeah.

SPEAKER_00

I'm gonna have to get an elite business advisory couch or a virtual couch. Okay, let's finish off with some rapid fire. Um, yeah, and some of these I might already know. Nicole, coffee or beer or wine?

SPEAKER_01

Coffee.

SPEAKER_00

Wow. Scotty, almost none of the above since I know you pretty well. Yeah.

SPEAKER_03

Diet Coke.

SPEAKER_00

Diet AW Ruby. You drink you drink some energy drinks when you're sitting in sessions with us.

SPEAKER_02

Yeah, I've I'm not a big coffee, not a big beer person. I wine not so much with age.

unknown

Yeah.

SPEAKER_02

Gives me headaches.

SPEAKER_00

Renovations, renovations or new builds? Renovations, new builds are that's the builder talk, and he's like, just give me new homes, will you, Nicole?

SPEAKER_02

I think it depends on the design. Because it's like there's certain outers I'm like so stoked about that are like the a nightmare to do.

SPEAKER_00

Yeah, that's true. Well, favorite power tool. That's that's a good question for Scotty. But you're not on the tools anymore, mate. So you probably don't have one. Probably the radio.

SPEAKER_01

You're not on the tools anymore. I didn't get that memo.

SPEAKER_00

Yeah, but you didn't he he was as of last week. I thought maybe in the last seven days it changed, but um, someone was on the tools last week. Favorite tool, I don't know. Anything Nikita?

SPEAKER_02

I was just gonna say Nikita. No, I can't get like favorite tool.

SPEAKER_00

Most satisfying project. Willow Park.

SPEAKER_01

Oh, yeah, you loved that one. That was a good one.

SPEAKER_00

What was special about that one?

SPEAKER_02

I was just like mid-century, and like everything in it was super cool, like the planner box, like and you guys did full furniture design, and it was like everything was my style. So I love that one.

SPEAKER_01

That's very cool. I would say they're all really good, but I think that we just handed over our first new build, and those clients hired us and trusted us to do that project before we had even become Juge Holmes. Like we had to go and register our company in order to get a bank, get a bank account, and they were so trusting of us right from the start. And so that one I think will forever be special to me. That level of trust is pretty unparalleled.

SPEAKER_00

So yeah, you've obviously done something right because people don't just do that, you know.

SPEAKER_02

And I like how she says trust us, and I'm like, I don't even know. I just get handed out like here's the silver platter design, like go for it and get us.

SPEAKER_01

We're an ask, Scott. Get on.

SPEAKER_00

Okay, so let's let's round it up. What's what's next for Zouge Homes? Like, what do you think is like is the next move for Zhuge to just consolidate, pump break, slow down, get some, you know, restore the business owners so they're not fatigued? Like, what do you think? What is it?

SPEAKER_02

I don't think we have an option to slow down.

SPEAKER_01

I don't think slowing down's on it, but I think you know, just continuing to like refine our processes and and sort through all of kind of the internal stuff, communication, and then like Spot said, just kind of making sure our team is is perfect internally as well.

SPEAKER_00

If you had your time over again, Nicole, what would you tell the younger Nicole as it relates to design and construction?

SPEAKER_01

Partner with Scott earlier.

SPEAKER_00

There you go.

SPEAKER_02

Scotty, if we were talking to yourself, the wife to reach out to Nicole early younger me out.

SPEAKER_01

Don't do it, don't say that.

SPEAKER_02

No, that'd be nasty. Instead of carpentry, take a business class or an accounting class or something.

SPEAKER_00

Wow. Yeah, get a pet. I don't know. Yeah, but I think that's a good way to wrap up because I think we've just ended up at really where we started, you know, the power of partnership and you guys joining forces essentially, and and really now looking back going, I should have done it sooner. And that's powerful because you know, really it distills everything around what a good partnership is. You know, partnerships are not all good. Um, so you've both sort of fallen on your feet, you've got a great brand, you bring great skills to the table, you know, your care for how the client, you know, feels throughout the process, both sales and construction, is super important to you both. And I think that is what's going to stand you in good stead. And there's really nothing, as long as you've got the communication between yourselves and of course, you know, everyone in your team, um, you know, sky is the limit. Just understand this every time you break that ceiling, there's gonna be more challenges. I think I've said before, based on what Alex Hormosy says, when you're expanding a business, it's stressful. When the business stagnates, it's stressful. When the business is going back, it's stressful. So if you're in business, you should be stressed. And so that's the challenge, is just to Well, we're nailing it. Try to make it better and more bearable, but more systemized, you know, good people, good systems, you know. So um, anything else you want to close out with? Is there any any advice you've got? Anything you want to say to the audience, or do I just round it up with a good old-fashioned business for builders? Close out.

SPEAKER_02

Find a Nicole.

SPEAKER_03

Find a Nicole.

SPEAKER_00

Hashtag Nicole. Let's go. Um, yeah, I'd encourage, you know, look, guys, thanks for being on the show. I am going to do a quick closeout. Um, you know, I really appreciate the time that you've spent with us, and uh, you know, I think a lot of that, you know, insight that you've shared is gonna help a lot of builders all around the world. So um I appreciate you sharing, and uh, it was it was certainly a pleasure and a privilege to have you on the show. And Scotty, I'll see you in the morning, big fella. Sir.

SPEAKER_01

Thanks for having us.

SPEAKER_02

Yeah, good to have us.

SPEAKER_00

Great. All right, everyone, and that is a wrap. Um, if you've got any questions, hit me up, max at elitebusinessadvisory.com. Uh, get across to uh elitebusinessadvisory.com, hit the book a consultation button, come and come and have a chat with me. We'll talk about things that you're doing well, things that you're doing not so well, um, and we're gonna try and turn you into a juge homes wherever you are so that you can go and build a kick ass business. Have a good one. See you in the next episode.