Show 2 with Rob Baugher

Interviews with Today’s Top Remodeling Entrepreneurs http://www.remodelersontherise.com

Show 2: Rob Baugher talks about how he made a big

change and started running a real business vs letting

the remodeling business run him

Kyle: Welcome to Remodelers on the Rise. I am your host, Kyle Hunt and alongside me is my co-host Ryan Paul Adams. Welcome, Ryan! Ryan: Hi Kyle! How are you doing? Kyle: I am doing well. Ryan: Hey! Kyle just got back from the International Builders Show. How did that go, Kyle? Kyle: The International Builders Show – it’s actually the first time I’ve been to the show and the sheer size of it was pretty impressive. Ryan: I heard it was massive. Kyle: They said 70,000 to 75,000 attendees and it combined with the kitchen and bath show here. So I mean from the conversations I had, just a bit of upbeat – “Man! Things in our industry are just going in the right direction.” One guy made the quip of, “Back in the day when I went to the show, everybody would go to their steak dinners. And they’re spending good money on dinners and all that. Then, in the last several years, they haven’t been quite as spend-happy. But I am seeing a lot of steak dinners being bought again.” In this case, he said, “I’m going to hold off and not say we’re quite back yet.” But what I took away from it was a lot of excitement, and a lot of good direction. I had a little speaking event on Wednesday morning at 8 AM. It went very well but I think there was some remodelers who decided to sleep in. I don’t know if they went out late the night before but that 8 AM session was a little bit different than the middle of the afternoon.


Ryan: That’s great! The feeling I got from most remodelers I’m talking to right now is that they’re positive that about 2014, things are looking good. Energy is good. It’s likely to be a good year. Kyle: Indeed very good. Thanks for asking about that. Let’s get started with today’s guest. Our guest today is Rob Baugher, who is the CEO of Baugher Inc. down in Homewood, Alabama. And Rob has a lot of letters after his title – CGR, CAPS, GMB to name a few. Many awards like the Remodeler of the Year down in Alabama and Remodeling Magazine’s Big 50 Award. And when he’s not running his remodeling business, he is hosting a Saturday morning talk show called “Our House”. Ryan and I both have known him over the years from various ways in the industry. We both know him as a very kind and generous man. We are thankful he’s joining us today. Thank you, Rob! Rob: Kyle and Ryan, nice to talk with you again. Kyle: Welcome! So Rob, the focus of this show is really about you, your business and your experience. I just gave you a quick introduction. And now, I’d like to turn it over to you, if you could briefly tell us more about you personally and your business. Rob: Sure! I’d be glad to guys! We’ve been in the business for 40 years. We started out with remodeling and just stayed with it, which seems to be unusual in this trade. But we are a full service design and remodel company. We have morphed into doing the 3D virtual tours for all of our clients. That’s been the direction that the company has grown.


We started out working for 5 different decorators. They introduced us to their clients, the business grew from there. Really, just on referrals for years. That’s the general picture of what we do as a business. Kyle: Very good. And you, personally. So people can know who you are a little bit as well. Rob: Well, personally, everything that I do really has been absorbed in the business. I have, other than woodworking, I have few hobbies outside of the business. I enjoy that immensely. I have really focused more on that. I don’t really have much interest in a lot of your typical hobbies, so I’m just kind of concentrated on business. Ryan: Rob, would you mind sharing with us a success quote that you live by? And maybe an example of how you might apply that to your life or your remodeling business. Rob: Sure. One that I heard years ago, the fellow’s name was Henry Cloud. And he made the statement, “When the pain of remaining the same is greater than the pain of change, change occurs.” And that just really resonated with me back in the 80’s in particular. Ryan: Yeah, that’s a good one! Kyle: Share a little bit more about that. Can you remember, you said some time in the 80’s, some painful times in the business, some ups and downs. Rob: As we started the business. Actually a few friends of mine, we were in the apprenticeship program. Some relatives of mine said, “Let’s go into business.” So we started that on the side. And then about the time we graduated from the apprenticeship program, we actually had a remodeling business already going. So as the business grew like that and as we got more involved. We started taking our own projects and it got to a point where I was running 8 jobs at a time. Really doing the whole thing by myself: managing the jobs, handling everything about it, estimating, collecting, all of the construction. And it just really got to the point where I needed some kind of change.


It just got to a point where I realized I can’t work any harder. I was working round the clock. Some nights, I wouldn’t even go to bed. I just worked all night, then turn up at 7 o’clock the next morning. I just knew there was some huge problem, wrong with this business. And a relative of mine, who was 4 years older than me, who was also building houses died from a heart attack at 40. And I just talked to my wife about it, “You know, I’m on the same track. Something’s wrong.” And finally, it was realizing that we had to make a major change in the business. I had completely lost all quality time with my family. And so, we just sort of reeled it back in. Froze down the things we had going. Slowed everything down. And really took time to think what we want the business would look like in the future. Kyle: I kind of had you expand on that, and I think it parlayed into our next question, which is sharing of a time in your journey where you encountered failure. Is that where you would take that conversation or is there another part of your journey which you’d highlight as part of the failure? Tell us the story and also, some of the lessons you learned, as you were getting into there. Rob: A lot of folks who are in the remodeling, construction, carpentry business really do care about what they do. And they care about their customers, and I think that can spill over into people overworking. And in my case, into what I call “burn out” at that time where you really have nothing else to give. Kyle: I’m sure nobody listening to this can possibly relate to that. Everybody is probably like, “What is the guy thinking about? I mean, I’m working like 35 hours a week and making 6 figures.” Carry on. Rob: That’s what it was like. I sat down with my wife and said, “I am going to learn how to work smarter instead of harder. I am going to put in 8 hours a day. I am going to start at 8 o’clock and finish at 5 o’clock. I won’t do any appointments at night.


And if we can’t make this business go within those parameters, then we will do something else. I need some normalcy. I need time with you and I need time with the kids. I’m losing this quality of life that I really want.” From that event, actually, we began to develop a system, a form for the business and processes that would give us comfort and control. This led into all kinds of other innovations that otherwise, if we had not stopped and said there has to be something better, then we would have never gone to the next step. Ryan: Sounds like you made the decision to run the business versus letting the business run you. And I think that it’s a tough to do. A lot of people are still struggling with that. Rob: And you know Ryan, back then, we didn’t even have that terminology. It was still another 10 years before those terms came to be. Ryan: Yeah! You are absolutely right. Rob: But that was it. Ryan: That’s great. Sounds like you had that AHA! moment in that period of time. Is there something else you’d like to expand there or any breakthrough that you have that really led to a big change in your business? Rob: From that, we began to make other changes. I had discovered this Project Manager model. We started focusing on having someone on the job, who had the job under control all the time. Ryan: Which allowed you to do something else – maybe a lot more important in the business? Rob: Absolutely! I was able to administrate everything about the business by doing that. Ryan: That’s huge! Rob: At that point, I didn’t have to be on every job at the same time. Aside from that, we began to draft our jobs out, plan every job every half day. By accident, we actually realized that we’ve gotten 25% faster in producing the job.


Then, we concentrated on that and it grew to 40% faster. So, we were actually doing a 10-week job in 6 weeks. And we began to charge for estimates and bids. We were making money off that – things that people would tell us we can’t do. We have to do this in order to succeed. And we found out that it worked. Kyle: When was that? Was that back in the 90’s? Rob: We began charging for estimates, I believe, it was in the early 90’s. And some years, like now charging for estimates, we make around like $100,000 just for estimates, whether we get the job or not. Kyle: So to recap what I just heard there. I think, it’s important to recap it--- Pain, brokenness, working too hard, business running myself instead of me running the business, AHA! moment of seeing this isn’t going to work. And then putting the pieces together. And the pieces, the first one, sounded like I need a Project Manager. So you got a Project Manager in place. Do you call him Project Manager or do you call it a different title there? Rob: We use the term Project Manager. Kyle: Ok! Rob: Actually, my Project Manager is only on one project at a time, whereas most Project Managers do 4 to 5 jobs. Kyle: Are they swinging the hammer along with managing the project? Kind of doing that dual role? Rob: No! We had tried the Lead Carpenter System back in the late 80’s and that didn’t work for us. And I really wanted this individual to be monitoring 3 or 4 different trade contractors instead of swinging the hammer himself. He actually slowed down we he puts his tools on. We require our guys not to wear tools, not to do the work. Instead, they need to learn how to manage. Kyle: Got you!


So that Project Manager role, plan every half day of the job. I haven’t heard that philosophy very much. Planning makes sense. But planning every half day. That was pretty clear to me and interesting. Through doing that, through better systems, through better processes, through better planning, we are getting 25% faster and by optimizing that further, by 40%. We are doing things that our competition couldn’t nearly come close to. Our clients are happier because of it, right? Rob: Absolutely! We had run basically experiments. We had a project which we had to do a complete bathroom in one week and then we had someone who wanted to surprise his wife and do a kitchen in one week. So we planned every detail, everything about it and we are able to do their kitchen and we also did their den within a week. It can be done but it takes planning. But once you learn how to do that, you can apply that to every other job you have. Kyle: I think the other thing I am hearing here is that, all this stuff didn’t happen overnight. What I am hearing and correct me if I’m wrong Rob, is incremental improvements over time. Rob: Absolutely! And actually, some of the carpenters who I wanted to become Project Managers had no management skills, so that didn’t work. The company itself had to morph into a different company. And as people came into the door, we had to explain to them who we were and how we did this. So that they would buy in the very beginning. So that we got the people we needed for the roles. Ryan: That sounds like you had to give up some control. Not necessarily abdicating everything but delegating more effectively so that you can be done by 5 o’clock and you can get jobs done faster and make more money. So it all works out if you can just get to your plan and you can start implementing some of these changes.


But it’s not easy. Rob: No. But it’s implementing one at a time and work on it, develop that, work on the next one in order to streamline the whole operation. Ryan: Absolutely! Kyle: One more thing to recap what you hit on before we move on to the next question Ryan. The charging for estimates, it seems like it’s a bit difficult. I mean some people get it, other people come from the standpoint, “You can’t do that! It’s impossible to do that.” Speak to us for a little bit about why more people in our industry need to be charging for estimates. Rob: I realized with that, I could do a better job in the estimates. My friends were spending 3 days bidding projects to go in and turn it in and then be locked in the pile with other people and have no assurance whether they get the job or not. And what we also found out by charging for estimates is that it eliminated the competition. We even string that even further by including our design with our pricing. And we charge for both of those. And by doing that, we are eliminating the competition because the client is sitting with us the entire time. We plan this meeting. We have a series of meetings with them – anywhere from 4 to 8 different meetings. So they get to know us, we get to know them. And we can decide whether we want to work for them or not. They decide the same about us. So we’re eliminating competition because the competition never got the job, they never went out to bid. Ryan: By the end of that process, you are locked in. You are going to be the person they’re going to hire. Rob: Yeah! Pretty much. And by the time we got through with it, the entire process is in a position where we can literally plug into our computer model. And the job is ready to go, as far as we are concern.


So we are actually gaining time on the job even during the process. Anyone else coming in, they could see the data and bid on it. But they weren’t ready to go and start the job like we were. Kyle: Beautiful! Thank you for that! Rob: It works out great. Like if you make the rules, you are going to eliminate the competition. Ryan: It’s a great model. Rob, is there anything in your business right now that’s exciting you? Rob: Probably the biggest thing right now is what technology has done to the business. More and more, my employees are coming to me saying, “You know, I’ve seen what you do.” And in conjunction with my remodeling company, I own several companies. I am working on a new business model right now. In doing that, I encourage them to do whatever makes them happy. And they come to me and said, “I really would like to go home, raise my kids, work around the house. So is there a way I can do my job from home?” And so, what we’ve done is to develop outsourcing or ways of handling things where someone could handle the phone, the appointments, the book keeping, the accounting, all those sort of things from their location. Or, they can actually go to a separate business and I hire them to do that for me. Ryan: Oh, nice! Rob: And I am pushing that throughout the entire company right now. And by doing that, it is shrinking the overhead costs for the company. My Office Manager actually left the company and started their own business. I hired them to run my office from their home. And my costs went down probably 60% compared to what it cost before. So really, the outsourcing possibilities with technology are really changing. Computers, iPhones and cameras are really changing how we do what we do. Ryan: It is. And it’s also easy to get lost in technology because there are so many options. Do you have any recommendations as far as implementing?


Focus on one thing at a time or what do you recommend looking at right off the bat? Rob: My design staff are actually highly skilled in technical details. And so they became my go-to guys. Had they not possess those skills, I would have to have someone who could answer those questions for me of how to use the computer programs, etc. You should have some resource there or have someone who understands, who’s already touched these things where you’re headed. Kyle: Got it. Before we go into the lightning round, I was clicking around your website. For those of you who are listening to this, it’s www.remodelit.info. I saw highlighted a lot of those little things that you do differently than other remodelers. You talk about clean neighbor, environment, design services, scheduling, timelines, and warranty. Can you speak about those things for a minute? The importance of those little things. I am guessing. I am assuming that this is the case. That these little things are what really give client a more remarkable remodeling experience, instead of just, “Well, Rob’s company did a good job.” They are saying, “No! They did a fantastic job!” Speak to us about some of those little things, if you will, for a second. Rob: The main part of our sales process is to differentiate ourselves between how we operate and how other companies operate. And so we are spending most of our time explaining how the business works. Actually, we tell people we are offering you a remodeling system. We are not here to sell you a job. But we do about 13 things that are different than anyone else does. Here are the 13 things that we do.

We have a full time Project Manager on your site

We have a list of our insurances

We are going to give you our licenses

We give you all data upfront

We are going to show you that we plan the job thoroughly

We have the jobs on a schedule

We are going to tell you when we are going to do the job and when we expect to be through

http://www.remodelit.info/


We are going to explain to you upfront that we are going to complete the job faster than the other guys – 40% faster than they’d complete it

So you are going to use that time to really cite that here are the niches and the way we handle things that are completely different from everybody else. You’ve got to separate yourself from the crowd. That’s how you make the rules of engagement in order to get ahead. Ryan: You got it! Rob: So any other choice they make is a lesser choice. Ryan: And yeah, there is really no competition at that point because you indentified all of these things that make you better and unique. And it’s not just about workmanship or quality. Everybody does a nice job. Well, most remodelers do a pretty good job. But it’s about identifying those cool little things that you do better and different. That when you put it in your marketing, when put it in your sales process, you sound like somebody from another planet. You know what I mean? The other guy who just showed up to look at the same project didn’t talk about any of those things. Makes it a lot easier. Kyle: Excellent, thank you! All right. So now, we are going into the lightning round questions. Rob, this is where we going to fire through a series of questions and you’re going to continue to share your smarts with us. Sounds good? Rob: Yeah, I’d be glad to. Kyle: Excellent! Ryan, why don’t you start us off with the first one? Ryan: Ok! Here we go. What is the best business advice you’ve ever received? Rob: I think that would be to attend the business educational classes at the national seminars that are available. For the price you pay and the access to all of the data


and information, there’s a huge amount of learnings out of attending the local and national conferences. Ryan: Excellent! Kyle: Awesome! Can you share Rob one of your personal habits that you believe attributes to your success? Rob: Probably a couple of things there. But one of them as far as personal habits go, I really feel that because my day is condensed from 8 o’clock to 5 o’clock, that I have to hit the ground running and really, an hour before work, I always have a quite time where I’ll spend that time getting my mid basically ready for what’s about to happen. I’ll spend time in prayer, bible reading and then I’ll spend about 30 minutes on reading other literature – usually something that’s not remodeling related in any way. But I actually set that up as an appointment. And every one knows not to bother me during that time. In that way, I’ve dealt with any kind of mental pressures or anything like that before the day ever starts. Kyle: Excellent! Rob: Doing that helps. One other habit is I read. Probably, 3 books a week. Ryan: Wow! Rob: On different topics. My goal was to read one a week but I got carried away. Kyle: How can you watch endless hours of TV if you are sitting there reading books? Rob: Someone has said recently that watching TV takes about 13 years off your life. Ryan: Yeah, that’s incredible. Rob: There has to be more value than that. Ryan: Yeah, absolutely. Kyle: Rob, what book and this must be challenging for somebody who’s a book reader like you, what book or maybe I’ll give you 2 since you are an avid reader, would you recommend to Remodelers on the Rise listeners?


Rob: I’d say that the most valuable book would be Michael Gerber’s e-Myth Revisited. He has probably 6 other books out but the best one he’s written is the first one he wrote – the e-Myth Revisited. There’s some value in e-Myth for Contractors and for those who are interested in increasing the speed of what they are doing, they could read Eliyahu Goldratt, The Theory of Constraints. It’s really good. It’s an easy read. But it’s a limited topic so it might not do you any good at all. Unless, you are really interested in speeding up how you do your work. Ryan: Those are very good recommendations. Really good reads! Do you have a resource or something of that kind that you can share with our listeners? And as a reminder to our audience, each resource will be available on the website, with the detailed show notes from today’s show at remodelersontherise.com/show2. Rob: I don’t have a product per se or something like that. What I would like to offer and I do this is, I help about 4 to 5 people across the country. I would offer free counsel, personal conversations by emailing me at [email protected] and ask questions. During the day, I have a lot of fun answering people’s questions – whether it is about designs, pricing or production. I really enjoy talking to people who are trying to get their business straightened out. But I don’t have any package or anything to share. Kyle: Sure! That’s a great offer now. We just started this podcast but you could have tens of thousands of emails flowing through your inbox. I don’t want you complaining to us if you do. Rob: I can always forward and send them back to Ryan and Kyle. Ryan: All right! Kyle: Give to Ryan! Don’t give it to me, I have 4 kids. He has only 2, going on 3. So here’s the final question. It’s a bit of a deucey. Imagine Rob, you woke up tomorrow morning and you are in the same exact business but you knew no one, had no sales and had only $500 of start up money.

mailto:[email protected]


And your life depended on you selling something in the next 7 days. You still have all the experience and knowledge you currently have. Your food and shelter is taken cared of. But all you have is a laptop and $500. What would you do in the next 7 days to survive and generate new business? Remember, your life depends on it. Rob: You know, in not knowing anyone – that’s a real handicap. Kyle: I am glad you caught that because the last couple of people have skipped that one and went straight into their network. You listen attentively. Rob: Well, again, sometimes, the answer is in the question. So if you listen to what people are saying, sometimes you get the point. Actually, what I’d do is I would start a radio show. And I can get a co-host from a local college for free. I can get this radio show for free. I’d make thousands of connections. I can be on the air replacing some ridiculous infomercial. Probably within a week, leads would come in and I’ll have a million dollars a year from that. Then I have to decide to use the $500 and hire you two. The funny thing about that is I’ve already done that. I had actually proposed that to a radio station and they went for it. Basically, I get the airtime for free. I help them. I introduce them to different trade contractors and suppliers so they can sell advertising. The radio show doesn’t cost me anything. Ryan: I think that’s a great idea! That’s an excellent answer. Rob: You really need to lean on the knowledge you already have. Ryan: That’s a great answer. I love it! Finally Rob, where can people get a hold of you? I think Kyle mentioned your website. Is there anything else you wanted to share today?


Rob: Well, let me mention, in order to get in touch with me, it’s [email protected] – that’s my email address. Probably, the main thing that one of my mentors said years ago was, “Rob, don’t reinvent the wheel.” Everything that you need to know, somebody already knows the answer to it. You may develop some innovation along the way but the main thing that you need to know is if you seek, if you’ll go after, if you’ll knock on doors, if you ask people, you’ll find out that you can get that kind of information that you need, that specific information if you just ask for it. And most of all, like independent cowboys that we are, we don’t ask for help and really, there’s so much available. But the first step is for you to reach out to somebody, whom I sure would like to help you. Ryan: It’s a great response. Kyle: Well, thank you Rob for coming on the show today. We really appreciate you sharing your story and just a friendly reminder to all our listeners if you could check us out at www.remodelersontherise.com, if you could take 2 minutes to review and rate our show on iTunes. The more reviews and ratings we get on there, the better chance other people like yourself can find the show. So thank you again Rob for joining us today. Ryan: Thank you Rob! Rob: Glad to do it guys! Kyle: Excellent! We’ll talk to you all soon.

mailto:[email protected]

http://www.remodelersontherise.com/

Education

Show 2 with Rob Baugher