Living on the edge, Part 2

Canadian Contractor sat down with Dwayne and Anne Butler, co-owners of Master Edge Homes, Markham, Ontario, to talk about, among other things, how they started the business, the day-to-day issues of operating it efficiently, and the balancing act between passion and profits. Here’s Part 2 of our interview.

Read Part 1 here.

CC: Anne said that at some points you’ve said you didn’t want to do this anymore. What were some of the reasons why you might have said that?

DB: Well, we weren’t closing deals. So my sales process wasn’t refined. I wasn’t confident in my sales process. Our competition was undercutting us so knowing I’ve got to meet these margins, I still had to drop my margins to make cash flow happen. And yet, I’m still losing jobs because of the different business models that they were creating or whatever it be. I haven’t said it very often, but it was just more of a frustration point that, “I just don’t know if I can handle this anymore.” And every time we’d turn around and we’d get a good six months, and things are going well, all of the sudden, something happens that turns it around and makes it go the opposite direction. And so (it’s the) frustrating points that really (cause) it.

CC: What stage are you at in the life of the company and in that experience? Are you beginning to develop a little bit more of a pragmatic approach to the ups and downs? Have you built strategies for being able to survive the ups and downs of running a business?

DB: Yeah. So I think the sales and confidence… which I’m the only one that does the sales for the company, I think it’s very much refined and it’s in a good position (thanks to) reading books and learning a little bit more things that I can do with that. But that’s a good thing and sales are going very well. On the back end and the inside, there are many, many spreadsheets that we work with to try to manage the cash flow and different situations that come up through the projects and the timelines. It is efficiencies that we are working on as more of finer details. Making sure that the teams all work efficiently. And making sure that we manage our sales to match our needs. And working with the clients. We’ve got a lot of work going on for the fall, which carries right into March. And the phone’s been ringing and we’re getting leads. The leads are coming in and more work is coming up. So if we could take on this work now, would we want to? And can we? And are we going to try to push them off? And that’s part of the thing that we’re trying to manage. We’re not taking on a project just because the client wants to do it now (which I am all about… because it pleases the client). But Anne’s trying to push me through to say, “Let’s not do it now. Let’s push it into a section of our year where we can fit it in much better.” And so it’s managing things like that.

CC: What are your strategies of managing the ups and downs of running a business?

AB: I think… having a business is kind of like having a home. You start renovating it and… it’s never done. By the time you’ve finished one project, you’re onto something else. In the business, we’re constantly evolving. We figure out what we need to fix today, and in six months we’re changing something else. So just for instance, today, we were expecting a certain amount of expenses for the month of September. And they didn’t have it. So I sat down with our project manager to ask, “Why didn’t we get these invoices? Like, what happened on the jobs where these invoices that we were expecting haven’t come in yet?” And they’ve been pushed off to our next quarter, so just kind of figuring out how to better manage that cash flow, right? So I know that when I do my payment schedules in the future, I will push off those expenses and expect them later on in the project rather than at the beginning, so just always kind of learning to see what’s working, what’s not working, and to plan for the unexpected. Anything that I can put in a spreadsheet, because I can see what happens. I can see where the jobs are going to be spread out over time. So if we’re looking at signing up for a job today, I’ll look at the spreadsheet and say, “Well, that means we’re going to be at this many projects. And can our team work that many projects at the same time?” Sure, that would be great for cash flow. But in essence, something along the line is going to fail. So let’s try to look after our team first and make sure that they’re able to do their roles and responsibilities properly and efficiently to better suit our clients and our partners at the same time. So nobody’s getting rushed. Everyone’s doing the work that they’re expected to do. And the jobs continue on time and on budget.

CC: So you extracted yourself from the production. You started on the tools. You were the only guy. And then one day you find yourself off the tools. How was that experience and how did you manage that internally as well as externally?

DB: Well, there are several different jumping points through business ownership. Starting out on my own to become an employer and having staff, to lead and mentor them on the job to work on their own, while I left the site for various meetings, was the first jump-off. The next jump point I think would be letting the project managers and project coordinators do their job. That’s the point where I removed myself from the tools, but yet I was still going to the jobsites. Now I’m at the point where I’m not on the tools at all and I don’t even go to the jobsites. It’s purely trust in your employees to be able to do that. And I think it has a lot to do with having mentored and worked alongside of my team, having job descriptions that define their scope of work and what they’re responsible for. The struggle I have in our office is that my office is close to the production and design team so I always have an ear to the ground listening to what’s going on. I’m very quick to jump in with a very quick, easy solution. The team is also quick to come to me for a solution. My request to them is don’t come to me with a problem without a solution or two.

CC: How has giving your employees more responsibility affected you?

DB: I think that helped us grow, too, as owners, (because) before we took everything personally. If a client didn’t sign with us, we took it personally. If there was a problem on-site and there was some conflict, whether it would be with a trade or a client, we took it personally. Now we can be a little more objective as we’re not involved in the day to day. It’s interesting because we’re always learning. Every time that we turn around there’s always something new to learn, whether it’s a technique on the site or a different thing that we’ve encountered because we’ve not taken business courses. So it’s just something that we’ve learned along the way, and it may be something simple that someone has said to us where finally that light bulb has come on, and now I know what my true responsibility is.

CC: How would you describe it?

DB: Managing the business and sales are my responsibility. And, of course, to continue to lead our team so they continue to grow.