Constructing Top & Bottom Line Growth with Chad Prinkey, Founder& CEO of Well Built Consulting
In this episode of Exploring Growth, host Lee Murray sits down with Chad Prinkey, founder and CEO of Well Built Consulting, to discuss the challenges confronting general contractors (GCs) and specialty contractors in the construction industry. They emphasize the significance of operational excellence and delivering exceptional customer experiences. Together, they explore the pitfalls of the low-bid procurement model and the critical need for companies to provide real value beyond merely being the lowest bidder.
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Chad Prinkey
00:00:00
Because you actually have to be freaking better.
Lee Murray
00:00:02
Yeah.
Chad Prinkey
00:00:03
if you're not better, then nobody will pay more for you. And. Yeah, that's true.
Lee Murray
00:00:08
There has to be some substance.
Chad Prinkey
00:00:10
There has to be something there. So that's my starting point with all of our clients. All our our step one is let's make sure that you are operationally excellent. Let's make sure that you know how to deliver an awesome product for your customer and that you're and you're able to create. Wow, you know, through every aspect from, from estimating the project management through field management, billing and all that kind of stuff. Communication. it should be a wow experience with your company, and that should be efficient as heck so that your company can do it and not, you know, struggle, to do it. And then if we do that and then we have courageous conversations with our customers and we say, can we be straight with each other? I'm better. You know it and I know it, and I'm worth more.
Lee Murray
00:00:59
Welcome back to Exploring Growth. Today we're going to go deep in the world of contracting. And if you're a GC or you own and run your own contracting company, this episode is for you. Today I'm speaking with Chad Pink. He's the founder CEO of Welbilt. Author of the book Welbilt how the top 2% of Contractors Create Superior Value, Profits and Excellence. And the host of the Morning Huddle Construction Show. So, Chad, welcome to the show.
Chad Prinkey
00:01:29
Thanks so much, Lea. It's great to be here.
Lee Murray
00:01:32
So real quickly, kind of give us the background. I know you were telling me when we got to introduce your your story is sort of you went from construction worker to consultant. Tell us about that.
Chad Prinkey
00:01:42
Yeah. Man. So I, so my brother is a home remodeling and home building contractor when I was. He's seven years older than me. And so when I was like 15, he he was, an entrepreneur. He started his own business. He had been working as a bricklayer in New York for, five years himself.
Chad Prinkey
00:02:06
Something along those lines. And, went to tech school and was actually like an award winning national competitor in, in masonry competitions and all that stuff, which was awesome. And, anyway, he started his business and I, I went to work for him. I was his first employee. I worked, you know, summers and nights and weekends and all that stuff, just, you know, trying to make a couple extra bucks and went, you know, stayed stayed with it all through high school and college and, even a little after college, you know, in between stuff and on weekends and whatever else. And so I, I, I found out that I'm, I'm just generally not good at it. Okay. I, I think, you know, I was I was a serviceable laborer and, and a poor, carpenter. And it couldn't I was not even viable. Mason. You know, there's a.
Lee Murray
00:03:07
Lot to be said for having that level of self-awareness.
Chad Prinkey
00:03:10
You know. Trust me, he helped, to make me aware.
Chad Prinkey
00:03:13
I mean, there I was not confused about about where I know, I mean, but my brother and I are best friends, for sure. And he's, he continues to run that business he's had. It's 20 some years on 25, 26 years on, he's doing awesome. And, anyway, when I so so I went, I went to college and, and I, I was, it was actually an entertainer. I was a singer in a rock band. We were touring up and down the coast, and, I got, I, I was trying not to land in a in a career for as long as I could. Yeah, while I chased the dream. Right. And, anyway, I ended up, in sales and then very quickly in sales training, in a business to business sales training environment. And I had to go get my own business. I made $0 in salary and had to go figure out, you know, how to how to feed myself with, with sales training business and the only industry that I really understood with any measure, you know, of confidence was construction.
Chad Prinkey
00:04:10
So I went after a couple of construction companies and, and, turned out I was really, really helpful when it comes to helping them to, to grow and sell. And then and then a whole bunch of other problems started, as they were growing. And I had to get myself educated and put my, put myself through a true, in-depth personal MBA. Personal doctorate. Really? Yeah. Like, yeah, a lot of probably multiple doctorates. It's I've read, so many books, gone to so many seminars, you know, been through, so many, you know, individual situations and learned, through bumps, bruises the hard way and. Yeah, and, and right alongside of my clients. And so I've been doing this for 16 years. Started well built, about four, three and a half years ago, after working for somebody and just realizing, you know, I that that was the sales training company, and I was running this really custom, consulting business aimed deeply on the specifically the commercial construction industry.
Chad Prinkey
00:05:13
Okay. And it just, I was I was like, this doesn't make a lot of sense. I'm running a a very niche practice inside a generalist business that, you know, focuses on something I don't even really do anymore. So, started well built and it's been three and a half years. We've got ten folks and and that's the story.
Lee Murray
00:05:32
I love it. It sounds a lot like my story, actually. you know, just having a lot of grit, having to figure things out over, you know, a long period of time. And a lot of, you know, a lot of the education comes through helping clients. And what's so awesome is in, you know, through that journey is having your ideas change the trajectory of people's businesses. that's what I find so much so gratifying about being in the consulting world, is that I can come in and give some observations that are hard for them to see, because they're in it and, you know, it comes with training. It comes with, you know, frameworks and thinking, that would be sort of outside of their purview, but, you know, delivering that those ideas and then showing them how to execute it and it changes the trajectory of their business completely.
Lee Murray
00:06:22
It's it's such an amazing and very gratifying type of work.
Chad Prinkey
00:06:26
It absolutely is. And it is an extremely humbling profession. Yes. You know, I find myself, you know, they'll be like. So you're sure we should hire somebody into this? Yes. I'm like, I'm pretty darn. I'm about.
Lee Murray
00:06:46
89.7% sure.
Chad Prinkey
00:06:48
Exactly. If this doesn't work and I'll be like, it'll still be your decision. I don't yes, yes. You know, but, and and, you know, you do not everything works out perfectly, but but what I, what I have done has worked with I think now 240 or 250, construction companies in very, very hands on way and, and, you know, all I guess I could tell you is I've my confidence in my recommendations has gone up. Yes, dramatically. And I also know very much how to temper, my, my, you know, I, I can tell you when I'm at a 70% on something or at a 90% on something or at a 30% on something like I, I know well when you do it and lots of experiences.
Lee Murray
00:07:32
Yeah. When you make those calls, enough. And then you've had enough wins and a few losses, you know what that success rate looks like, then your confidence goes up. And I think the clients are more, accepting of, I mean, even if you're not even perfectly sure if it's going to be the transferring that confidence is means everything in the moment. you know, for them to say, okay, yeah, well, we've got to make a decision. So let's move forward with this.
Chad Prinkey
00:08:01
Yep. Okay. Well, and that's and that's a fair point to write that if it's not working as it is today, if we've got something that's not, you know, something to be desired right now. Yeah. Then we've got to do something. Yeah. And, here's a high you know, the highest probability likelihood thing is coming from somebody who's done this dozens of times in this particular scenario.
Lee Murray
00:08:25
Correct.
Chad Prinkey
00:08:25
Yeah. and, and can say like, well, we, I know we don't want to do that.
Chad Prinkey
00:08:28
And this is why, you know, and and so that leaves us with these two options or whatever.
Lee Murray
00:08:33
Yes, exactly.
Chad Prinkey
00:08:34
But it is humbling in the, in the sense that, you know, you're you do you're, you're making you're shaping people's futures and this and that's a big job man. Like that is very that's a scary responsibility and something that, nobody on our team takes lightly, right?
Lee Murray
00:08:53
so who do you work with primarily? Like, give me an explanation. Is it commercial contractors and what do they look like?
Chad Prinkey
00:09:02
Probably the easiest way to describe that is, you know, that's not to say that we don't work with any residential contractors, but if we work with a residential contractor, it's probably because they have some commercial arm. And that was how we ended up in their business to business sales is definitely our forte as opposed to business to consumer. When you're just talking about the go to market piece of what we do, that we're into operations and finance and we're into, you know, really the whole the whole gamut.
Chad Prinkey
00:09:34
but that would probably be the if you look at the difference between, you know, commercial construction or residential construction, the primary difference is B2C versus B2B.
Lee Murray
00:09:43
Got it. Yeah.
Chad Prinkey
00:09:44
And, the easiest way to describe our customer base is our. Our average client is a 150 employee, trade contractor or a 75 employee general contractor or CCM firm. Got it.
Lee Murray
00:10:07
Yep.
Chad Prinkey
00:10:08
And we work with companies that are much, much larger than that, but not a ton of them. And we work with companies that are, smaller than that, but not a ton of them.
Lee Murray
00:10:18
Yep. That makes perfect sense. Yep. Okay, so let's jump into this conversation then. and I'm excited to talk about this because I love diving off into rabbit holes. you know, I've talked with so many people on here about stuff that I have no clue about. You know, we've talked I've talked to a, someone who owns a pharmacy, family pharmacy, you know, various nonprofits. a Central Florida zoo was on here.
Lee Murray
00:10:42
I have no nothing. I don't know anything about that, but super complicated, by the way. so this is one of those. Those rabbit holes for me. Like, I, I get it, I understand how this works. I understand their business and all of that, but, I'm not close to this. This, you know, this, this part of the the world. So glad to have you on. what do you see? Just out of the gate is kind of the biggest struggle, for specialty contractors or GCS.
Chad Prinkey
00:11:10
Okay, so the biggest, I would say the biggest struggle and, and, and I outlined this really clearly in the book that you mentioned, is that there is a there everyone is operating in a very dysfunctional environment in, in the commercial construction industry, procurement norms are really dumb.
Lee Murray
00:11:41
Okay.
Chad Prinkey
00:11:41
Everybody is still clinging. Not everyone, but the the large majority are still of owners, and that an owner in this world means the person funding the construction project. So they're the one that buys from the architect and the general contractor.
Chad Prinkey
00:11:59
The general contractor is the one that buys all the specialty.
Lee Murray
00:12:02
So it could be a company, it could be an investment group. It could be. Right. Okay. Correct.
Chad Prinkey
00:12:07
It could be a county. It could be a municipality. It could be a, you know, a school system, whatever. Right. The the buyers are clinging to a very antiquated low bid procurement model and that low bid procurement model, among probably I mean, definitely some other systemic issues. His is causing a waterfall of events to take place in, in the industry where, In short, people are incentivized to be cheap. Not good. Not great places to work. not not good. customer service providers. or any of those types of things. And so as a result we have a race to how do we get cheap and not a race to any of these other items. Right. And, and, and it's amazing that as long as you eventually get the project done and you don't go out of business, that there's really no negative ramifications for running your business, on a race to the bottom.
Chad Prinkey
00:13:29
And so imagine working as an employee in that environment and what it might feel like to work at a place where nobody is, where literally every, every, every motivation is to cut costs. and it's like, you know, it's a constant every day is the minimum viable product. You know what I mean. It's not, it's not just, it's not just.
Lee Murray
00:13:53
And minimum valuable product.
Chad Prinkey
00:13:56
It's that's exactly that's exactly right. It's it's and so value is, is a word that is rarely used with any real meaning. They mean it to be cheap, right? It's like, you know, I'm that's the value by right. Like that's, that's not the value.
Lee Murray
00:14:13
Versus actually getting some kind of, you know, value to what you're buying.
Chad Prinkey
00:14:17
And so operating in that space is really hard man. And and so what does it create. Nobody wants to come and work in the construction industry because they're all crappy places to work. Right? Yeah. I'm generalizing. I'm obviously being mean on purpose, but you know, nobody wants to work there.
Chad Prinkey
00:14:32
It's a crappy place to work, right? Everybody's angry all the time and mean to each other. There's no loyalty. Companies don't take care of their people. you know, companies go, you know, come and go there. They go out of business all the time and then just open up with a new shingle around the corner. you know, if people are dying by the thousands every year in the construction industry, you know, there's a massive undocumented, undocumented immigrant, you know, working population in the space that is, is necessary, but, undertrained and and underqualified and, I mean, I can, you know, I can keep going, but it's a so, so operating inside that environment and being a great place to work. Yeah. That people enjoy. That makes great money, that creates generational wealth for owners and that, you know, all these types of things it's hard to do. So.
Lee Murray
00:15:26
So yeah.
Chad Prinkey
00:15:27
So it's you know, a lot of people who are in the construction industry, they'll, they'll like my first conversations with them will be like, this sucks.
Chad Prinkey
00:15:37
You know, this. What am I doing? Yeah. And and meanwhile, these are awesome people. Yeah. The owners and managers and workers in this industry are really they're the salt of the earth people. They truly, understand the the value of a hard day's work. They just want to build something and get paid to build it. Right. And, and it does not need to be this hard. So I think it's overcoming. Back to your very simple question that I turned into a 37 minute answer. Well, you're.
Lee Murray
00:16:07
A podcast host part time, so that's kind of your job, right?
Chad Prinkey
00:16:11
Kind of. Yeah. It's, the answer would be overcoming what is a very dysfunctional industry norm. And and still somehow being a great place to work that creates a bunch of happy customers and makes good money.
Lee Murray
00:16:26
Yeah. Okay, then. That's well said. I think the cards are stacked against them in that way. so let's talk about the procurement process then it since it's antiquated, how do Maybe your clients and you know, how would you advise people to walk through that and try to provide value, even though it is looking for lowest bidder, or step around it and find new, better quality, you know, customers.
Lee Murray
00:16:56
Which which path? The. I mean, do you take both paths or how does it work?
Chad Prinkey
00:16:59
Yeah it is that's a it's a great I mean very intuitively like that's exactly right. You have to do both things. So on one hand it is possible to change the way your customers are buying. Yes. Which it requires courageous conversation and it requires you to actually and this is the thing I, you know, might it might be the quote that goes on my tombstone is you actually have to be freaking better. Yeah. if you're not better, then nobody will pay more for you. And yeah, that's true.
Lee Murray
00:17:31
There has to be some substance.
Chad Prinkey
00:17:33
There has to be something there. So that's my starting point with all of our clients. all our step one is let's make sure that you are operationally excellent. Let's make sure that you know how to deliver an awesome product for your customer, and that you're and you're able to create. Wow, you know, through every aspect from, from estimating the project management through field management, billing and all that kind of stuff, communication.
Chad Prinkey
00:17:58
it should be a wow experience with your company, and that should be efficient as heck so that your company can do it and not, you know, struggle, to do it. And then if we do that and then we have courageous conversations with our customers and we say, can we be straight with each other? I'm better. You know it and I know it, and I'm worth more. And I just did this job and barely eked out a profit. And. And on the next job, you owe me a profit. Yeah. Right. And, and, you know, whether you say it like that or not, depending on your relationship. Sure. you know, but there are ways to say that and get paid what you're actually worth. That's one thing that you've got to do. And then you have to be prepared for a certain percentage of them to laugh in your face.
Lee Murray
00:18:44
Oh, yeah.
Chad Prinkey
00:18:45
And therefore, that means another thing you have to be doing is scouting for better relationships.
Chad Prinkey
00:18:51
And there are certain markets, certain geographies, certain types of construction where they're more or less prone to, to, low bid procurement. Yes. And so if you're in one of those spaces that is highly prone to low bid procurement, you're going to get a lot of people laughing in your face. and it may require a real. And we've done this many times where we've helped our clients to pause, take a look at what they know how to build, take a look at people that they could build that for, who might care about their, about their value proposition and start to market to and do business development in those arenas. And that's a long game, but it really pays off. The payoff there can be amazing. I've, you know, we've helped we've helped people to make that transition and pick up four or 5 or 6 points of profit over the course of a five year period.
Lee Murray
00:19:42
Yeah, I can see that. The things that come are the groups that come to mind are like an investment group or a company that is has more ownership over that project.
Lee Murray
00:19:52
because the building that you're building or have a part in, they're actually going to inhabit and run their stuff out of it. Right. And they care about if that sewer lines run right, or if the electrical is run right and up to code versus, a municipality where it's someone is looking for a job currently while they're putting the bids out and they're getting paid what they want you to get paid, and they're looking at the lowest cost because they don't really care. It's their boss that's telling them what to do. So the environment, the culture I mean, you said that well earlier like the I look at his culture or the culture of the buyer is going to dictate the value they see in the contractor.
Chad Prinkey
00:20:34
By and large owner occupied space. To your point is, a good spot for, actual value based rather than price based procurement. That's that's a it's a great example, but it's not it's that's not the only space either. There are there are a whole bunch more in different time, different episode, different day.
Chad Prinkey
00:20:54
Yeah. You know, but there, there are markets that, you know, that care. There are markets that could care. And, and then there are markets that just simply, you know, don't. And but you know, what's funny is even inside those markets, unless there are some rigid, bureaucratic procurement requirement to go with a low bid, even inside those markets, you'll still find humans who care. Yeah.
Lee Murray
00:21:20
It would be a low percent, but they're there. That's right.
Chad Prinkey
00:21:23
They're there. And and, you know,
Lee Murray
00:21:25
And so I guess what I can see that you take some of the things that you would do naturally on the people, with the people who care and apply them inside the process of procurement. so that you can put your best foot forward to maybe find that small percentage of people who who care.
Chad Prinkey
00:21:42
That's exactly right. Yeah. And I like that at the end of the day, for the there are human beings on the other side who make these purchases. It's not entities, by and large, it's human beings who make these purchases.
Chad Prinkey
00:21:56
And so another thing that matters at the end is our relationships. Yeah. And and having, you know, taking the time to build relationships, to go to lunch, to, to, you know, sit down and have a, an exploration about what matters to them and what matters to you and determine whether there's a fit. These are all investments that, you know, contractors have been trained to essentially not undertake because in their in their brains, like, it's it's pointless. You know, they're like, we don't we just bid man. Like if we bid if we if we're low, we win. If we're if we're not low, we don't win. We just keep bidding, you know, kind of thing. And and if you have that mindset, you know, you could see very quickly how you don't invest in relationships. Yeah.
Lee Murray
00:22:39
So the the specialty contractors like electricians, plumbers, etc., the people who are hired by your general contractors or is their buyer in this thinking, the value type of pathway is their buyer.
Lee Murray
00:22:53
Really they're building relationship with GCS versus end, users or how would you how would you say to go about that?
Chad Prinkey
00:23:02
another really and I mean this seriously, Lee, like very intuitive question. That's awesome. Great stuff. I'm. Thanks. I'm gonna I'm gonna see if I can hire you in a minute, but, but there is a, so for specialty contractors, pursuit of the end user is very much a useful concept. Okay. It is very complicated to execute. Yeah. And it varies dramatically depending on your trade and depending on who that end user is. Is it is it a property owner? Is it a, an owner occupied space? Is it, government, a governmental, space? Is it there? There are a lot of major questions to to consider when you go owner direct, but that is kind of the holy grail. is if as a specialty contractor, you can essentially be specked in, by the owner in the pursuit and like imagine, imagine you were building a house for yourself and your, brother was an electrician and you just trusted the heck out of your brother, and you knew he was going to do you, right? Right.
Chad Prinkey
00:24:20
When you hired your general contractor, you would say to your to your to your builder. In that case, you would say to your builder, hey, on electrical, you're using my brother, right? That happens in in non-residential, non single family residential all the darn time. Yeah. but the it is rare error for the specialty contractor to get that space. It is much easier for the specialty contractors who have service and maintenance businesses where they can develop relationships with those owners independent of a project. So if if I'm a plumbing contractor, everybody's got pipes in their buildings. If I'm a electrical contractor, everybody needs somebody who can come out and fix, you know, outlets that are breaking or, you know, heavy up a system that isn't is no longer holding the load that you need for your building or whatever else. Yeah. If you're a landscape contractor, you're going to be mowing lawns, right? Or, you know, you're going to be maintaining so there's easier access. Whereas if you're a drywall contractor, you know, not many people are like, I need my drywall spruced back up.
Lee Murray
00:25:23
Yeah, come in here and help me out. Unless they're really angry people and they make lots of holes. Yeah, that's exactly right.
Chad Prinkey
00:25:29
Yeah. So you can see that that it is it varies very, very dramatically. But yeah, that is that, that that is a whole, you know, one angle that we, that we definitely work with our specialty contractor clients to, to develop and they, they are at the they're, they're at the mercy of the general contractors clients on the other side. Right. So so many specialty contractors are pissed off at their, at their, GCS. They're like, oh, they're all those are low bid guys. That's not necessarily the GC. I mean, it could be, but but just bear in mind they're operating in whatever environment that they're forced to to operate in. And so the behavior that you see from a general contractor is the behavior that that they're, you know, often, you know, forced to have from from their owner and, as, as a, a good friend of mine, Kenny, likes to say even a good general contractor grows horns if they have a bad owner.
Chad Prinkey
00:26:33
Yeah. Yeah.
Lee Murray
00:26:36
Yeah, I would believe that. So most of our conversations so far has been really on the front end. You know, new, new business, creating sales, that kind of thing. Let's go sort of down, you know, the PNL a little bit and, and look at the operations and say, you know, I was talking with a buddy of mine, a couple of weeks ago, and they're a contractor, and he was telling me all of the woes that they're going through with workers comp. you know, it's just killing them all, you know, the premiums. But also, whenever they have to use it, they don't use it. They they try not to use it. It's just, you know, it's such a wild West world of a necessary evil. on top of that, the the problem that they all have is finding and keeping good workers. because of a lot of the problems you mentioned the front end, with the environment that they're kind of stacked against them.
Lee Murray
00:27:32
you know, you know, when you find these contractors in their current state, how how can you address the problems of operations for growth? Because that's the way I like to think about growth is growth is a lot of the times on the front end is the top line marketing and sales, but there's a lot of growth that can happen through the company, to make you more profitable.
Chad Prinkey
00:27:55
Yeah. so okay, so the first one work. I like the way you're talking about it, working through the PNL. if we if on one end, let's say we just we check the box a little bit on talking about revenue growth. we also, believe it or not, checked some of the box when it comes to gross profit growth, because with you, a part of how you grow gross profit is to do work with better customers who value you and be better at selling your value to those customers, right. And being better so that you can ask for more. Yeah. And so we're already starting to touch operations.
Chad Prinkey
00:28:38
Yeah. But I'll go deeper into operations. Well and I'll.
Lee Murray
00:28:41
Say to before you do that, that having the right customers that do value you work generally there's a lot less headaches because they're not micromanaging your work. I found that to be true as well.
Chad Prinkey
00:28:52
Totally, totally true. But owners can make general contractors very unprofitable if they, you know, drag the project out and blame the GC for it. Yeah. you burn through your general conditions and your toast, right? The, the, the same thing is true about specialty contractors with, with generals, you know, causing you to have, you know, we need you out here. We need you out here. We need you out here. You get out there and it's not ready, you know? And now you gotta re mobilize and you're wasting time. And and it's exactly inefficient. That stuff happens all the time, so agreed. The right customer also helps us solve that problem. The stuff that's 100% on you. Do you have your SOPs in place for all of the critical functions in your business? That's what I look at is I, you know, running an operationally excellent business and, and having so, so documented SOPs training for all of those SOPs, having making sure that people, when they come in, they're brought up to speed quickly.
Chad Prinkey
00:29:52
They're not just thrown to the wolves. And that's in every position, whether it's estimating or project management, field management or actual field production. All of those people need a set of SOPs to refer to, and they need training against those SOPs, and they need supervisors who are going to coach and support and supervise to make sure that the SOPs are being followed. As such, the you know, we seek efficiency with all that. People are always like, you know, how how deep should I go in SOPs? And I'm I'm like, deeper than you think. Yeah. You know, I trust me. Yeah. Everybody's. Yeah. Everybody wants the easy answer and be like, okay, just document 20% of your most important processes. Yeah, well that's cool. And but if you want all the profit you need to document 80% of your processes, you know, at the end of the day, and you really do need to train on all of that stuff. And when possible, build those processes right into your tools, into your systems.
Chad Prinkey
00:30:45
So people aren't even having to think. It's just, you know, I'm following the steps that are laid out in this software. and this is what I'm creating for you to do so.
Lee Murray
00:30:54
Many efficiencies through the delivery of what you.
Chad Prinkey
00:30:58
Do. That's exactly right. And here's and here's the world that I, that I try to create for, for our clients and that we've been very successful in creating over the years is, imagine a world where you, you have your, your competitors are pricing a job at $1 million to win it. And it's, at their. For them, it's a 20% gross profit job for you. You can win the job because you're better, and they like you more, and you have better relationships at 1.1 million. And and furthermore, if you needed the work you could do it at 1 million. But instead of at 20% GP for you that would be at like 28% GDP or 30% GDP because you're that much operationally superior to your competition. You're better at running your work.
Chad Prinkey
00:31:53
You're better at buying your work. You're better at planning your work, right? You're you're more efficient, your people are better. And you get you get on and you get off jobs quickly. Yeah. And so I can price it at a million and make 30%. So what that means is if I got a really if I'm desperate for work, if I got a really skinny up and a tight economy, I can go in at 20%, which is what my competitor is good to happy to with on a, on a on a normal day I can go in at 20% and win the damn job for, you know, a 840,000 and kill all my competitors, right? And I'm at 20%. I'm fine.
Lee Murray
00:32:26
Yeah, it gives you margin literally in a slow or down economy to cut because your efficiency there to help you still make some money in an economy. You're making it on both ends 100%.
Chad Prinkey
00:32:40
And if you're smart, you're taking that money and you're doing two things with it. Well, three okay, you gotta pay owners.
Chad Prinkey
00:32:46
That's cool. Enjoy yourself. Yeah. I'm not I am not anti-union. They're the.
Lee Murray
00:32:50
Ones taking the.
Chad Prinkey
00:32:50
Risk. Absolutely. They should make they should make a lot of money. But within reason because you need to be able to to to one, set aside a bunch of cash inside the business so that the biz and this again, so many contractors are like, you don't want money in the business. That just makes you suitable. Okay, man. Like if you suck enough that you're worried about being sued, I agree, get your money out of the business, but also maybe close your doors. so I mean.
Lee Murray
00:33:16
But it sounds like you've had that conversation before.
Chad Prinkey
00:33:19
All verbatim. I had that conversation. Yeah. And so, you gotta you gotta keep a bunch of cash in the business so that you have all kinds of stability to work with, you know, flexibility on and in bonding capacity and all those things that'll give you the ability to grow. And then and then the second thing you need to be doing is reinvesting to further your advantage.
Chad Prinkey
00:33:41
Yes. Right. Maybe that's geographical expansion. Maybe that is expanding service lines, maybe that. Right. But but whatever it is that you're doing, you know, tools, equipment.
Lee Murray
00:33:53
People.
Chad Prinkey
00:33:53
Prefabrication, better people, you know, being able to again when so, so now when the economy tightens, when things get rough out there for everybody, you've got a bunch of cash, you've got a well-oiled machine. And when your competitors start laying off their people, you're waiting for the good ones. Yes.
Lee Murray
00:34:16
I think that's a phenomenal plan. And I would add to that that you also have a business that's much more valued if you were to exit down the road. I mean, there's the valuation of that company is much higher because of the things you just mentioned.
Chad Prinkey
00:34:33
You know, it's really interesting. Yeah. Exiting is such a oh, it's a fascinating topic. And there's a lot of it going on right now in the construction industry. A lot of people, you know, because of what I described earlier in the conditions, there are a lot of people that just are kind of done like, man, I don't know if I want to keep doing this anymore.
Chad Prinkey
00:34:51
And there are a lot of, you know, second and third generation kids who are coming up who don't want to be in the industry. They're there, you know, so, so all of a sudden, you know, what was I took over for my dad, my son doesn't want to be in this company. Right. And and so that's happening too. And, and, you know, even if your son was coming to take over your construction business, you'd still want that business to be operationally excellent and able to run without you. But if you need to sell it, it's a requisite. Because if you if you're trying to sell a business that doesn't have what we just described, you're essentially selling at a fire sale price. And I've lost.
Lee Murray
00:35:28
Yeah, it's not sellable.
Chad Prinkey
00:35:30
I mean, you could you can sell maybe technically. Yeah.
Lee Murray
00:35:34
There's assets and different.
Chad Prinkey
00:35:36
Maybe one times. One times, you know, profit or two times profit. You know, I've seen those transactions happen and it's it's, you know, pretty devastating for people who've dedicated their entire lives.
Chad Prinkey
00:35:46
And, and they were awesome at their job, but they didn't build a great business. Right.
Lee Murray
00:35:51
Well, you mentioned, the economy going up and down. I wanted to spend the last bit of our time talking about what you think the market's going to be doing. and, you know, however we want to parse this, we got an election coming up, and, whether whoever's elected on the other side of that into 25, what does that market look like for contractors?
Chad Prinkey
00:36:16
So I'll talk about the economy for a minute and then I'll talk about some policy stuff. So, so economically, there people have been talking about a recession, you know, since, well, since there was kind of like a blip of a recession during Covid, right? And then everything got went bonkers. but depending on where you've been in the country and depending on what market sectors you serve, you're like, is there gonna be a recession? Dude, we're in one. Yeah. And, and then in some markets, in particularly, you know, like, you know, we were talking about your state of Florida.
Chad Prinkey
00:36:58
Texas has been in a similar, you know, kind of bubble. Dallas-Fort worth has been on fire like crazy busy. You know, you're like, when is the bubble going to burst? And you're, you know, sitting where I am in the world, which is like DC, you're like it has, you know. Yeah. Well, I mean.
Lee Murray
00:37:16
We just had a big migration of sorts where people are moving from different states and Florida. You know, we are we've been booming for some time now. So I think.
Chad Prinkey
00:37:25
Recipient of of a lot. Yeah.
Lee Murray
00:37:28
And I think if I were in a contracting business, I'd be wondering if that bubble is going to burst at some point.
Chad Prinkey
00:37:34
All you have to do is look at the population numbers. Right. And so demand is directly tied to that migration. Exactly what you just said. you know, people in the if you're if you're looking for the, the most powerful driver of predictive, you know, predictive driver of construction industry, success.
Chad Prinkey
00:37:58
You need to be looking at migration data and population growth or contraction. And if population is growing or projected to grow in a certain region, that region is going to have a reasonably strong construction economy. What we're not. And this is like everybody thinks back to that. Like the only time that wasn't really true was during the Great Recession, which is, by the way, when I started doing this work, was was in the midst of the Great Recession.
Lee Murray
00:38:25
It was a great time to get in that business. Totally.
Chad Prinkey
00:38:28
It's like I was like, hey, let's start working with contractors in a B2B commission only sales environment. That's amazing. That's smart hon. Yeah. anyway, but but I, I in that environment, it really didn't matter. Kind of like where you were or what you built. unless you were I mean, there were there were a few niche markets, governmental, you know, government driven construction was, was protected, which meant also public schools and things like that. They were pretty they were pretty viable, but pretty much all privately funded construction dried up all across the country.
Chad Prinkey
00:39:04
That's not the kind of recession that we are, Are either having or going to have. In my view, I don't we don't have those kinds of the same kinds of systemic, fears, to, to, you know, stacking up this time. It's just population driven man and, and and and rate driven. So market, the, you know, the Fed's rate has done, very painful things to, privately funded work that relies on construction loans and I'd say, like up until about this is so complicated because it varies by region, but but depending on where you are, construction may right now as we're, as we're recording this basically in September of 24. Right. right now you may be in the midst of, a complete and total slowdown. I was talking with a developer just yesterday who said, you know, dude, we we are not doing a thing until the fed meets in September. And I was like, I think I can guess why. Yeah. And he was like, I mean, look, I got my deals.
Chad Prinkey
00:40:18
He goes, here's what's cool. My deals already work. But when the fed cuts a quarter point or their hope and a half point when the fed cuts a half point, the market reverberations. And what that's going to do to the cost of money for me, it's literally going to save me $850,000 on on, you know, this project that's worth two weeks. Yeah, yeah, yeah.
Lee Murray
00:40:38
That, that, that, that short term type of thinking makes sense.
Chad Prinkey
00:40:41
And I think more so than the election. Lee. That's what that's what really is going to impact the construction economy in the coming month. I predict that Q4 will be completely on fire in terms of new starts in the private sector because of rate cuts that people have been waiting for, and a lot of projects that have just been kind of on hold on, hold on, hold on, hold. And then they're going to go, all right, cut them loose. Our money, you know the money's cheaper. It makes a lot of sense on the policy front.
Chad Prinkey
00:41:11
I'll talk about that just for a moment. Sure. the biggest difference. You know, first off, I have no confidence that either president would actually solve immigration. I want to go on record as saying, okay, I think I don't, I they just haven't, you know. No, no, every president's been like immigration. And then as soon as they get in there they're like, this is hard.
Lee Murray
00:41:36
They're like.
Chad Prinkey
00:41:37
Well, well there are here's the thing. The status quo is working for some people. And that's that's what you have to keep in mind. There are 2 million whatever, you know, undocumented immigrants coming over the border, right? The numbers are staggering and they've been rising. And during under Biden, those numbers, you know, were were, you know, freaking incredible in terms of the amount of undocumented, undocumented people who came over the border. Well, a part of what makes this really complicated is there are some very, very strong interests on both sides of the political aisle that benefit greatly from having that flood of undocumented immigrants coming in on one side of the aisle.
Chad Prinkey
00:42:17
You have business and the business, and I'm not just big business, but big business. you know, big business that benefits greatly from having a very, very cheap under the table workforce. it is a, an exploitative practice that America has been engaging in since the beginning of America. immigrants built America. They built America on their blood, sweat and tears. And they did it, you know, by and large, for chump change. And they're doing it today for chump change. The the undocumented immigrants that are coming from Central America today are building America, and they're not making a whole hell of a lot of money doing it, because we don't have to pay them. Right. and so, you know, there there are a lot of business interests that enjoy that reality. I'm not saying that they're all, you know, starving, but I but I am saying they're not getting paid. What? Yeah. I don't know. Somebody who works in a union might, you know, or. Yeah, something along those lines.
Chad Prinkey
00:43:14
They're just not. Yeah. So, if Trump is elected and he actually carries out, which he won't, but he actually carries out, the plan for mass, you know, deportations and locking down the border. The entire construction industry will completely freeze. There will be nothing being built. If there's mass deportations. They truly do get rid of the undocumented immigrant population, which I you know, I could see the merits of. That sounds kind of interesting to start fresh. Why not? This could be cool. You know, we'll start fresh. We'll start with saying one by one.
Lee Murray
00:43:52
It's a big it's a big task to undertake to actually do it.
Chad Prinkey
00:43:57
And that's why I say he's not gonna, in my opinion, like, if I were gambling, you know, seriously, if there was, if there were Vegas odds, what do you think they would be? Right. Yeah. Well, no.
Lee Murray
00:44:05
Well, it's it's an interesting, you know, discussion because Trump is, he's very big on building things himself.
Lee Murray
00:44:13
He's big into real estate. Sure. so it would not necessarily serve his interest.
Chad Prinkey
00:44:18
He knows. He knows. You think he doesn't know? He doesn't. And all the hotels would shut down because ain't nobody cleaning them or getting your food ready. And all the restaurants would shut down and we wouldn't have any freaking, you know, fruit and vegetables in our stores. And because all these people, that's what they're doing, man. It's agriculture, hospitality and construction. That's where these people are, and they're working their asses off. Yeah. And and they're by and large, they're really good people, man. And. Yeah, but they came here the wrong way. Maybe because the right way is too much of a pain in the ass. I don't know, but but, you know, we have problems that would be massive if, but eventually, you know. But again, I really do like the idea of, like, a cleansing. It certainly sounds nice to sort of wipe the slate clean.
Chad Prinkey
00:45:04
Say everybody out, we're going to let you back in one by one based on your merits. And you know that, like, I'm I'm on board with that philosophically. It sounds neat. I just think, boy, I don't think we're ever going to do that. It's not.
Lee Murray
00:45:15
Practical.
Chad Prinkey
00:45:16
It's not practical. And I think there are some humane issues that would present themselves and things like that. I think if Harris is elected, we will continue to see precisely no action on the border. Yeah. which is its own form of tragedy. Sure. that I, you know, but but at least we know what that normal looks like. Yes. and it sucks, but it's, you know, and but it's it won't cause a meltdown for a minute.
Lee Murray
00:45:49
I think that's a that's a really good way to, to to explain what the future looks like. And I think from a very practical and economical, you know, perspective. So, you yeah. Well done. I think that, all all of those ideas which, you know, maybe not be perfect because who knows what's going to happen.
Lee Murray
00:46:09
I think that you're hitting all the right, buttons that make that industry go. So. Yeah, I think that's I think I think you're on on something there.
Chad Prinkey
00:46:19
And in the meantime, you know, just know that the short term of the construction industry will be directly tied to interest rates. And, yes, we we can expect to see rate cuts correspond directly to, new starts, which I'm telling you, they're sitting there, they're ready to go there. There are a lot of people who have, you know, their projects. They've been bid and rebid and rebid and rebid, and they're just waiting for the moment. Construction costs have come down a little. And, you know, when we press play, it's going to be awesome until inflation gets completely out of control and we do it again.
Lee Murray
00:47:00
Yes, yes. Which is hopefully that doesn't happen. But it's inevitable in my opinion.
Chad Prinkey
00:47:05
I don't know how you stop it. I really I know how you.
Lee Murray
00:47:07
It's a train that's been on the track for some time now.
Chad Prinkey
00:47:10
It is in demand is extremely high. You know, in the construction industry again, you know, there's a reason people are sitting there with plans ready to build. housing is in very short supply. And most places around the country, you know, there are there are a lot of projects that, you know, have, a blinking yellow light ready for green and have had for, for months, if not a year or more.
Lee Murray
00:47:36
Hey, this has been amazing. Thanks for coming on and talking through all this. I it's it's been fun, and I've learned a lot about the world that you live in, and, so thanks.
Chad Prinkey
00:47:46
Thank you. Man, you're a great interviewer. And like I say, I, I've, a lot of the questions that you asked were so intuitive. I was like, does this dude know my script? This is pretty awesome. It was, and I know, you know, somebody.
Lee Murray
00:47:59
On your team sent me.
Chad Prinkey
00:47:59
Your playbook, you know?
Lee Murray
00:48:01
Yeah.
Lee Murray
00:48:02
Well, so. Okay. You wrote a book. Do you have a copy? Yeah. Tell us about the book.
Chad Prinkey
00:48:06
I always forget to talk about the darn book. Yeah. So? So I will talk about the book briefly. So Welbilt is the name of the book. It's how the top 2% of construction contractors create superior value, profits and excellence. And it really is about how even in this environment, you can thrive and rise above. I mean, we've we've helped companies to get to a place where they're they're doing 2 or 3 times what industry norm profits are. They have, you know, loyal and long lasting employee relationships. They have incredible, you know, reputations among their clients. And it is I think it's about 1 in 50 contractors are playing a different game than everybody else. And, and we do help companies to play that game. And this book lays that out.
Lee Murray
00:48:47
That's awesome. And you have a podcast, right. The Morning Huddle. tell.
Chad Prinkey
00:48:51
Us about that construction show.
Chad Prinkey
00:48:53
Yeah. So Stacy Holsinger and I, who's just she's just a long time friend who's a marketing specialist in the construction industry, and she, she and I have created what I like to just think of as, like, a platform for people who are trying to create positive change in the building industry. So we're bringing people in all kinds of topics varying from, you know, political conversations to workforce development conversations, safety and, and, psychological health and all all those different types of things. And we just started inside that, what we're calling the well built series of the Morning huddle. And that is, me and, one of our top, consultants on our staff. Matt. So just having a long form discussion similar to this, where the two of us just have a really good time talking together about stuff we care about in the construction industry. And so that's cool.
Lee Murray
00:49:44
I like you.
Chad Prinkey
00:49:45
Check out the Morning Huddle. It's it's, it's something that every, every time I, I stumble across an episode, because my, my podcast thing lights up, I'm like, I'll give it a listen for a few minutes.
Chad Prinkey
00:49:55
And I do find myself laughing and having a good time. I'm like, man, this is it doesn't suck. You're always amazed when the stuff I'm making doesn't suck.
Lee Murray
00:50:02
Yes, that's always a beautiful thing. if I if people want to come to get in touch with you, should they can they email you? Go to your website. Where should they go?
Chad Prinkey
00:50:11
I mean, the best spot to connect with me is on LinkedIn if you want to connect with me personally. So just jump on jump on LinkedIn. My name is Chad Prin KY. our website is well built consulting. Com if you'd like to learn more about our company, about the book, about the podcast, all that stuff is featured really nicely on the website. But you know, so people have different reactions, right? Like one reaction is, I just like to spend more time with this person stuff. Go to the website. Yep. If you actually want to communicate with me directly, jump on LinkedIn and shoot me a, you know, a DM and, and, and get a conversation going.
Chad Prinkey
00:50:45
I've, I've enjoyed a lot of those.
Lee Murray
00:50:47
Perfect. Hey. Thanks again. We'll have to have you back.
Chad Prinkey
00:50:50
I dude, I would love to. Thank you. You're doing a great job. Keep it up.
Lee Murray
00:50:54
All right. See you.