HOME SERVICE LEADERS Podcast Episode 007
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Derek Clarkin (00:00):
It’s not only you’re signing a contract with us, but I want to know, and I, I want to feel good that you’re going to execute the work and not create a bunch of headaches for me
Show Intro (00:15):
Growing your home service business can be a pain in the, but we know you want to grow on the home service leaders podcast. We interview leaders in the home services to find out how they’re building their companies. So you can too.
Nathan Young (00:28):
Hey guys, thanks for joining us. This is Nathan from home service leaders podcast. I’m here today with Derek Clark and he’s the president now of prime general contractors. He’s lived in Minnesota for over a decade, but you actually started as a project manager and sort of like Rose up through the ranks at prime general. So like introduce yourself. What did I miss? Tell me a little bit more of that story.
Derek Clarkin (00:52):
So, yeah, I, uh, started with, uh, prime back in 2008. Um, my partners, Greg and Larry were starting the business back in 2005 and I joined them three years later then with them now for 12 years. And, uh, about three years ago, they elected me as president of the company. And prior to that as VP, um, but what was going on is Greg and Larry were looking for somebody to take over the business.
Derek Clarkin (01:18):
That became my role. And, uh, so we’re in that transition period right now with, uh, myself buying. Both of them out, Greg still works. Larry is retired, but he’s also helping with business development at this point. So, but prior to all the prime stuff, I worked for a small specialty contractor for about four or five years. And, um, that was, uh, out of college. And in between college, I worked, uh, concrete, masonry, uh, did pole barn, framing, cabinetry finishing, and that sort of thing. So just to give you some background, that’s an impressively varied background also just like ridiculously cool that you were able to like over the course of this dozen years, all the way through like you’re and now you’re buying out your partners. Like that’s crazy to me, stress levels high, for sure. You know? Cause it seems like the only way that makes it easier is if you grow the company and not only grow up, but do it responsibly, try to make some smart decisions and manage it the best he can.
Nathan Young (02:14):
When you started with prime, were you thinking like, I want to be here as long as I can. And like, did you, within your first year or two, were you thinking I want to be in this business?
Derek Clarkin (02:24):
Yeah, for sure. Um, before I even started with these guys, I was buddies with them cause I was bidding their work as subcontractors over that four years before I even started with them, I got to know them pretty well. And uh, they had a project manager working for him prior to that. He ended up moving on. So, and I had heard they had an opening. I knew there were just a wealth of knowledge and I just wanted to absorb all of that information and understand the old school mentality for being a general contractor hats off to them. They’re awesome. They’re great people. And uh, showed me a lot, you know, with the ropes so well, you’ve, you’ve
Nathan Young (03:00):
Touched on it already. It’s a little bit of the elephant in the room. We’re all affected by it. We’re all thinking about it. None of us can get away from it. And of course, you know what I’m talking about, I’m talking about the fact that you are a general contractor. So I worked in the BC local four. I was around Indianapolis, but I travel all the way down to Louisville and did jobs there. My brother started instill, runs the terrazzo and tile restoration company. I was a finisher. I became a project manager. I helped him grow his business. I was kind of second in command for a little while and not nearly at the level that you’re talking about. So similar story, micro level. I remember how like at, we were a subcontractor and we worked with GCs and as a subcontractor, like GCs were either your best friends or biggest enemies. Tell me a little bit about what is your relationship with your subs?
Derek Clarkin (03:55):
I’d say really strong. A lot of our subcontractors we’ve been working with for several years and even some of them date back to when Greg and Larry were at a former company before they started prime. And a lot of those guys are, you know, getting to their age where they’re going to retire here. Pretty soon. We just have a very cohesive relationship with our subcontractors. You know, we’re always looking for new subcontractors, but there’s always that trust factor there too, right? It’s not only you’re signing a contract with us, but I want to know. And I, I want to feel good that you’re going to execute the work and not create a bunch of headaches for me. And we’re just going to all work together to get this project done. So in regards to our subcontractors, we do our best with vetting them out. If they are new, you know, obviously insurance requirements, all that stuff, but also reputation proceeds everybody.
Derek Clarkin (04:52):
I know the twin cities is a big area, but everybody knows everybody in the construction industry. It’s kind of funny, but the same token, the area’s also saturated with general contractors too. So I have friends at other general contracting company and companies I should say, and I can always reach out to them and try to ask some questions. If you know, these people are legit. If I’m, you know, get a higher up and also
owners, uh, when we’re going to bid on projects, sometimes they already have some subcontractors. They prefer to utilize whether or not they’re low on the bidding process. Sometimes it’s arbitrary, but also, uh, you know, we have to do our due diligence on our end to make sure that we’re giving the owner the best estimate and actually thinking out the process and making sure that it all comes together.
Nathan Young (05:38):
Excellent insight. It’s a couple of things that you said, I think are really gems. There are, and it was that way at Indianapolis too. Like everybody knew everybody, even if you didn’t know each other, but you still knew. And so there was no such thing really as getting sort of lost in the, and a nymity went out the window. Um, it didn’t matter that there were 20 or 30 or 50 con like GCs. Like it’s, it’s almost like you can put in a new bid without somebody else already knowing your name. That just kind of takes me back a little bit. We have to, I said the elephant in the room that was like a little bit of a joke because the real elephant in the room of course is like, we’re dealing with COVID and 2020 is to say it’s different, right? Like, uh, take a shot if I say the word unprecedented, like, so tell me a little bit just to like set the world. What was life like 2019 when you were doing planning and thinking last year at the end of the year, what was life like then paint me a picture a little bit.
Derek Clarkin (06:52):
Yeah, it was good. You know, looking forward. Um, you know, it’s always great. If you can start forecasting four quarters ahead. That’s awesome. You know, cause then you can start planning out your crews where your superintendents are gonna go and you just feel a little less tension right. Coming into 2020. It looked great. I mean, we had a lot of, uh, promising leads we had, um, you know, we, we usually classify leads to, you know, like, uh, uh, solidly to, uh, you know, basically this one’s basically in the door, we just don’t have a signed contract. And then, you know, obviously we have our, what we would anticipate for revenue earned for each quarter. And I think we have roughly about 60 to 70% actually. No, we had a little bit more than that. I think we had about 70% already signed contract on the books ready to go.
Derek Clarkin (07:43):
So we actually had a decent backlog coming into 2020, but as soon as COVID hit and you know, it just started sinking into everybody around that, you know, March, April time, it really started setting a tone and obviously people are, uh, reactive, uh, when that came through because nobody was anticipating that. I mean, what a, what a shock. I mean, just how unfortunate that’s been to the, you know, not only the entire construction industry, just to the United States and throughout the globe, it’s just terrible. You know, it was, it started off with reactive. And then, you know, we started reviewing the CDC guidelines and uh, Minnesota department of health guidelines on the requirements of what we needed to do and, you know, so we had all of our plans, uh, put in place. We had guidelines. We had, you know, you got to refer to the website just because we can’t all absorb all that information that’s in there.
Derek Clarkin (08:37):
But obviously we all want to take the proper precautions. So is basically reactive up until I would say June, July, and then people started kind of getting used to it, like, okay, you know, get it, we gotta check your temperature. Do we have a cough? Do we have a fever? Have we been exposed to anybody with it? I want to say just the tension kind of went down a little bit during the summer, uh, with, I think there’s been a lot of anticipation for it ramping up in the fall in the winter, and now we’re in the midst of it again, but it seems like people are a little bit more comfortable, uh, handling it. Um, and I think people are a lot more optimistic now understanding that there’s going to be a vaccine out here, hopefully in the next three to six months for everybody.
Nathan Young (09:22):
How have you seen this affect the subs that you work with? Cause you, you and I, and anyone who would listen to this know that like you don’t, you don’t necessarily just get to, if they’re not, you know, these aren’t employees, it’s not like you get to internally have this conversation and say, okay, here’s our new here. Our new guidelines for behavior, blah, blah, blah. And then just like, know that those people are going to do that. Like you have to have a relationship with them. It’s more than just like I’m telling you to do this thing and then show up, show up the way I said or get fired. You technically you can have that, but it’s deeper than that. It’s more complicated than that. How have you seen this affect the subs that you’re working with and have you had to get creative with those companies as they either shifted or not
Derek Clarkin (10:08):
High level from a contractual standpoint? A lot of subcontractors, I shouldn’t say a lot. There’s been a few that have pushed a COVID clause in their contract, which is understandable. We’re now curing that in our contract. Uh, there’s a force majeure clause, uh, those standards in a lot of AIA contracts, but now
with COVID, that’s required just kind of, I don’t know, it’s just got a little weird because of, you know, manufacturers, you know, light fixtures are a pain in the butt to get it, you know, tile, is it local? You know, there’s just all of these things that need to be thought about that. Just kind of added an extra
layer of planning out these projects, not to mention, you know, with pre-screening projects. Technically we cannot record any information besides for listing a person’s, um, you know, name and what date and time they checked in, checked out of the job site.
Derek Clarkin (11:00):
You know, you can’t record, you know, temperatures or anything like that because of HIPAA. So what I’m understanding now, and what’s kind of come to light that it wasn’t a huge deal this summer, but it seems like subcontractors are looking for the general contractor to kind of direct what they want to see in regards to the, uh, COVID guidelines. You know, some contractors they’ll shut a job site down as soon as somebody gets positive, there’s different types of ways of cleaning the project. There’s, it’s just, it’s just added an additional layer. I think it’s put a lot of stress on the subcontractors not to mention, I think a lot of subcontractors are looking for work first quarter, been hearing a lot of feedback that, you know, with general contractors, we’re doing good. We got some decent carry over into next year, but I think some of the larger contractors and tone, I don’t know if they’re seeing a gap or, um, you know, with this hiccup with COVID that it turned a lot of people off with doing projects. And it seems like people started ramping back up with work in starting to see drawings from architects here, this fall, nothing of substantial size that I’ve heard of, but that’s been a big challenge. And that’s where I’m hearing, um, through a lot of our subcontractor partners, that work is kind of few and far between for first quarter, but it seems like things are gonna start picking up hopefully next year. So
Nathan Young (12:22):
I have had no lack of incoming ideas that I write. So I see them all over the internet and I listened to a lot of people. I try to, to get a diverse set sort of opinions and perspectives on where they think the industry is shifting and how it’s shifting. And then of course, I get to talk to guys like you. One of the things that I would love to get your opinion on is so I’m working from home that wasn’t true prior. It was really easy for us to do that. Office was basically like a cultural statement, more than a requirement already. And that’s been true for the last six, seven years of my professional career. So we’re a hundred percent distributed now. Um, you know, like I, I manage almost 30 people and everybody works from home and we have tools to do that.
Nathan Young (13:16):
And we can take care of that. We have no plans of readjusting back to office life. Like those are gone now. We’re like, Oh, we have a a hundred percent distributed team. Some of our team members have moved. Some of our team members have taken up the van life. They’re traveling around and still getting their work done. Clearly you guys can’t do that. I mean, like by the nature of the industry that you take care of, but then my follow-up question, the actual, like the deep dive is with people like me ditching our space. What impact do you foresee that having on new builds, renovations, demolition even, have you seen more requests for demos? How is that shifting or is it yet,
Derek Clarkin (14:09):
You know, in the twin cities we have, you know, we’re dealing with, COVID like everybody else. And then also, you know, the, the unfortunate passing of a George Floyd that happened here. So there’s still that tension there. It just seemed like, like downtown is just like a ghost town right now, or it has been, I
haven’t been down there, uh, recently, but there’s always, that thought is, you know, are people going to move away from downtown or to the suburbs who knows, you know, are people gonna feel safe? You know, are our employers gonna, uh, feel safe with their employees being downtown too? I don’t know. In regards to office space, I think everybody’s still trying to figure out, Hey, what can we, I don’t see office space going away. I just, some companies can deal with it. You know, with construction, there’s so much communication between us and you know, my employees that we need to be around each other.
Derek Clarkin (15:05):
We kind of feed off each other, to be honest with you. No, you need that camaraderie. But in regards to office space, I don’t see that going away. I just, I see it being a slow process of people going back, but then now employers are going to be thinking, and I, and I’ve been hearing a lot from architect, friends of mine, that people are more looking at master planning in the future. You know, how do we want to lay out our office spaces? How can we keep people from being safe now that we’ve experienced a pandemic? What is the outlook for us moving forward? You know, so I think it’s triggered some, some companies, some businesses, some leaders to start thinking about the future and how they can, you know, not only have their company laid out, but how would they can do it safely and make people feel safe?
Derek Clarkin (15:52):
Because before, you know, we do a lot of TBI, build-outs interior build outs and there’s always collaboration spaces, right? Are they going to go away? I don’t know. They have different products now for HPAC. And I shouldn’t say different it’s stuff. That’s been out for awhile, but like bipolar ionization, which are basically charged particles in the air. And they say that it can kill, you know, not only COVID, but several other viruses too. So there’s options out there. People are, you know, we’re all creative. I mean, it’s, what’s driving the capitalism in our country, but you know, that’s something that I think we’ll all get through. I think the biggest question people have is the timing. You know, when, when is it going to happen? When are people going to get back to a normal life? You know, I mean, it’s so odd. Look at the Dow Jones right now, over 30,000 points. It’s crazy. So there’s, there’s still positivity happening. It’s just happening in a different way right now. So, and I, I think it will be slow, but I’m really hoping by end of second quarter, third quarter, next year, we’ll start seeing some normalcy again.
Nathan Young (16:56):
How are you? And you’ve touched on this and your answer. There is so much uncertainty just to make this statement. Almost that what I just said was, Hey, here’s this context around something that I’m seeing, people are talking about, office spaces, changing, not going back to office. What, you know, what are you seeing? And your response is so we can coin that and we can post that. And it’s just like, here’s this reality, it’s uncertain. People are taking different measures. Some people have this solution. Some people don’t have that solution, like in like what you said, which I think is it’s so important to remember, like people are creative, right? Like we’re just getting into these moments of people. Having had enough time to go. I might have to figure this out for the future, not just get through it, but like we need to change. And we’re just starting to see the brainpower going on those things. So in this space of uncertainty, like how are you managing
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Derek Clarkin (18:00):
Every day? It’s like, it’s something new every day, to be honest with you. I mean, every time I read the CDC or Minnesota department of health website, and it’s not that it’s something new that they have on
there. It’s just something maybe I didn’t recognize before, but honestly just being reactive, I think we can all do our best to try to preplan, you know, like with our job sites, we try to set them up and, you know, make sure we have enough, uh, HEPA filters running on the site and, you know, try to properly distance people away from each other and, and follow those guidelines. But it’s just, it’s tough. We got
job sites where guys unfortunately, have to work on top of each other. You know, there’s really not a choice. And, and my heart goes out to the field burgers because you know, they’re in the middle of this stuff every day. And you know, we try to manage it the best we can, but you know, we can’t be on the field a hundred percent. We can’t watch all this stuff all the time, but I guess just a quick response is just being reactive. I mean, there’s no other way. I mean, you can play it all you want, but who’s planning for a pandemic.
Nathan Young (19:05):
You’re saying you can’t no matter what you do, you can’t set it and forget it. You have to be aware that it’s changing all the time and you have to be willing to adjust to that.
Derek Clarkin (19:14):
Correct. Yeah. And you gotta be patient and just, you know, understand the rules, you know, some things there, you have to do this. And then there’s some things where they’re like, well, we recommend you do this. And it’s just as a leader of a company, you’re just going to go with your gut instinct sometimes and make sure you don’t make the right decision because just want everybody to be safe and, and trying to stay healthy. So
Nathan Young (19:40):
I have seen one of the draws of the trades is the steadiness and knowing like, Hey, if you build houses or if you do HVAC ducting or like, you know, like I personally have restored courthouse floors that are a hundred years old and I’m like, this is Bay installed this terrazzo floor then. And somebody has been maintaining it for a hundred years and like, yeah, sure. Have we seen advances and side-by-sides and like diamond grits and like, do we have different polishing systems now? And do you know, like vitrification and blah, blah, blah. But like, so we’ve seen sort of like advances, but I’m like, I’m still a dude here cutting stone, you know? And like, there’s this consistency and solidity to that in a lot of these jobs. And that can breed a culture of like, this is what I do. I’m good at this. There’s no change. So just the idea of you saying one of the most incredibly important things is being reactive right now. Would you say that that can fly in the face of the culture that you TA that can tend to be built inside of these types of companies?
Derek Clarkin (20:56):
That’s kind of a loaded question, be honest, is it acceptable? Not all the time, you know, with the reactive decision, you all, I try to take my time with making my decision, but sometime, you know, sometimes you just got to make it and just move on. I guess I can’t really answer that question, Nathan. I just can’t, you know, I mean, yeah, some people, they know their swim lane, this is what I’m going to do. And you throw a wrench in their engine and they’re going to get, you know, and all you can do is just try to support them the best he can and, you know, come up with ideas and how you work around it. I mean, that’s, that’s all it is. I mean, everybody’s got their own personality. I can’t control that. All. I can try to control the steering, the ship in the right direction
Nathan Young (21:43):
To get a little bit gritty, right? Like, because no matter how much we talk about how things are different and reacting or whatever, like you still got to do the basic blocking and tackling of business. So prior to 2020, you’re finding subs, working with subs, building those relationships, you’re also recruiting for your own company. Cause like you can’t just utilize only contracted labor. Like you have employees in your own business, what are you doing to find and retain the people that you’re working with and in loving working with, and it has that changed at all.
Derek Clarkin (22:19):
Well, are you referring to the field or to the office? Yes. To both. Okay. Well to the, you know, for the field, we haven’t really recruited too much. We’ve just been maintaining because we’re more managerial will, self-perform some things, but in regards to the office, you know, we’ve had a little bit of, I wouldn’t say turnover, we’ve had some hirings and some people that have left and, you know, in regards to getting the right next employees, that’s been a real challenge. I prefer word of mouth. I really like to hear it from other people who they recommend in the industry. And, um, you know, see if that person might have any interest in joining our team. Now I’ve been approached to see if a head Hunter, uh, will help my issue with a head Hunter is a super expensive B. They don’t, you know, they don’t guarantee that that person’s going to fit not only in your company, but your culture, you know, and then, you know, three is, I just kind of sense that they don’t do enough research, understanding, you know, these, uh, uh, people that we’re about to hire, you know, their personalities and you know, what they can really bring to the table.
Derek Clarkin (23:30):
Keep in mind, I’ve only worked with one head Hunter and it’s not a knock against them. It’s just, you know, they’re, they’re limited in what they can do.
Nathan Young (23:38):
I personally have, I’ve been on both sides, uh, have done recruiting in house and used a headhunter. I have effectively. The last thing that I just set up for us personally, is that I found the most reputable HR company that I could through referrals and found one person who was basically in charge of systems like recruiting systems and said, can I pay you to write me an internal process that I can have someone internally at my company, I can run a process similar to yours, I’ll pay you to own that process document. And they thought that was a weird district, but I was like, basically I was just hiring an HR consultant. But what I really want is an internal process so that I can hire somebody. Who’s a generalist in my office who can run the process because I also want to manage most of this myself because I don’t, frankly I don’t have the cash.
Nathan Young (24:45):
Even if I were willing to pay a head Hunter, like I don’t have the cash reserve that it takes to manage the fee structure. I don’t have that sitting around pay in that lump sum. So it’s cashflow issue as much as it is an expense issue. So we have done that. I, we haven’t finished yet. So like we’re installing that in the company. So I can’t tell you how it’s going, but that’s where I’m, that’s where I’m tracking. Uh, maybe I’ll ping you again in four months. I didn’t know if we sucked at it. Um, if I don’t, then I’ll be like, here you go.
Derek Clarkin (25:20):
But think about it though. I mean, 20 to 30% of somebody’s salary is out the door immediately. And yeah, I mean, you can put a contingent on hiring that person or, you know, maybe if the person doesn’t make it six months, that sort of thing, but it’s not that it’s a bad industry and I’m sure it works really well for certain industries, but just with construction or at least what I’d be looking for on a general contractor and is just somebody who not only knows what they’re doing. I mean, cause there’s so many moving parts and pieces to general contracting, uh, you know, that person’s going to be expected to work on anything down for marketing, doing their own estimates, project, managing project closeout, you know, and all the while communicating back to me and everybody else within the company, what, what they’re doing, it’s just, there’s a lot to it and they need to fit the culture, not going to hire some who is, you know, you have to come in here and be a prick to everybody. And then he’s a rockstar then off half of my staff and they all leave.
Nathan Young (26:23):
I was talking to Justin Cox, uh, recently he’s an EOS implementer who works in the twin cities. I had no idea of all the words slash names that I just said mean anything to you. Yeah. Traction. Yeah. Okay. So I’m actually an integrator. So we utilize the EOS system. I’m a firm believer and I I’m, I’m really like my, my skill is to be that second in command guy. And I love it. I love that job. So I work with a visionary who
runs a company actually out of, uh, Northern Minnesota, his name’s Chris Swanson. He, uh, lives in two harbors. He’s actually the mayor of two harbors. So he and I have a few products we’re working on, but I’m the integrator for him just in Cox’s his implementer. And so, uh, traction is something I push in like almost every podcast and all the time, like I talk about it all the time, but he was just saying yesterday morning when we were having like a virtual coffee, he was talking about the person you just described. And he was calling them terrorists. And he was like, it’s almost like they hold your company hostage. Right. Like, Oh, they’re, they’re this amazing performer. And everyone hates them, but I was like, I just can’t get rid of them. And he was like, it’s like, they’re terrorists. Like they, they have everyone’s strung out and strung up. And like, you can’t do anything he’s like you, and he was talking about how leaders can’t put those people on their teams. I mean, you’re, you’re saying exactly the same thing, right?
Derek Clarkin (27:59):
Yeah. Yeah. I mean, and I, I couldn’t imagine for an EOS implementer having to deal with that and tell an owner, you got to get rid of him because he’s making your culture toxic.
Nathan Young (28:10):
Right. So just such an interesting to hear you say that and then have to have just had that conversation yesterday. You’ve mentioned this already, like operationally of course, everything has been affected, what things are actually staying. Just like we talked about earlier, what things are staying completely the same. So like yes, of course you have to put in all these new safety precautions, you have to communicate that you have to be flexible. What’s been dependable.
Derek Clarkin (28:36):
I honestly, I I’d say the entire prime team has been very dependable, you know, create employees, uh, everybody’s here and they’re not here for, you know, they’re, here’s the team, you know, nobody’s in it for themselves. So I mean, we’re, we all care about one another and you know, uh, family is definitely one of our big values, you know, and not, not only our personal families, but, you know, as a company that one’s been really solid, everybody’s been very supportive. Uh, I know working from home is a pain in the. I have three kids and I love them dearly. They’re awesome, but I can’t work from home. And I see
that, uh, some of our employees have kids and it’s definitely a challenge, but I would say, uh, for consistency everybody’s been, you know, it just, it adds another layer. So everybody’s working, it seems like more, or, you know, with, uh, technology, you know, we’re all using zoom and, and you know, we’re working on our spreadsheets, uh, you know, remotely, what have you, it’s difficult in all when you’re at home with just a laptop and you don’t have your three screens, you can work off of it.
Derek Clarkin (29:47):
You know? So I would say that’s been really consistent. And then also, uh, my partners have all been very, very supportive of what’s going on and, uh, you know, Oh, calm and cry the blues every now and then, but you know, it’s been, it’s been really good because I mean, this affects everybody. And sometimes it sucks being a leader and having to make decisions and you just gotta live by them and, and move on. But, uh, you know, that, that’s what I would say is both the office and the partnership has been very solid.
Nathan Young (30:21):
So I mean, every in every question that you’ve answered, the dependability of your team has been so obvious through everything that you’ve said. And like, obviously you’re using you, if you are familiar with the EOS system, I can’t imagine that you don’t utilize core values, uh, in a really kind of a heavy way to like, make sure that you’re managing who is on the team and not, and it sounds like that has behooved you really well through everything.
Derek Clarkin (30:50):
Yeah, for sure. They’ve all been just solid, you know, and, and some, like a lot of people can just throw up their arms and, you know, leave. It just seems like we’re all just kind of like locked. It’s like, you know, right. But it just seems like we’re turning a corner too with this vaccine, so
Nathan Young (31:10):
Right. I keep, keep crossing my fingers. It says the word real, super tactical, like have you had to review process docs, rewrite process docs, like, have you like actual installation of, you know, day-to-day labor work? Have you had to look at that and say, Hey, you know, like, Oh, we can’t get X, Y, and Z materials anymore. Like they’re not making that work. We were going to install things this way. And we were doing these quality specs, and now that’s not something that will work. Have you had to look at some of that really, uh, sort of like day-to-day tangible and start taking a look over all of it or have some of those things been like, no, this is pretty steady state tried and true. We can still do the work like we used to.
Derek Clarkin (31:57):
Yeah. That’s a good point. Um, it’s all it’s, it’s been taken on. So we haven’t reviewed processes. We haven’t redone processes. Processes had remained the same, um, you know, with us having to work remotely at times, sometimes it’s a challenge, but, you know, we manage our field, uh, basically by committee and, you know, I’m managing it, but, you know, I want feedback from each one of project managers on, you know, which superintendent is going, where, and who needs help here and there, the other thing too, with projects when it comes to, you know, if there’s materials that aren’t showing up on time, it just seems like COVID has, I don’t want to call it an excuse. Uh, but with manufacturers are completely out of our control. Um, you know, all we can do is in, and we’ll look at it, you know, per case basis.
Derek Clarkin (32:47):
But you know, like for example, we’re doing a project in downtown Minneapolis right now, and light fixtures are becoming an issue. So before we even reply to the owner, Hey, let’s do a research. Let’s figure it out. Can we get something that can be retrofitted later with the same type of a light fixture
bulb? And then, you know, what’s that cost, what’s the cost. If we end up waiting a little bit, you know, is the owner pushing, uh, the end date a little bit? Do they have to be done by substantial completion? So, um, it’s not, it’s not worth rewriting processes. It’s just more worth of what’s going on as business as usual. And I hate to say the word react, but these certain items come up and it’s, it’s construction. It’s, it’s very standard for, you know, especially now with a pandemic for things not to show up on time.
Derek Clarkin (33:36):
So we almost have to plan at that point. And right now what we’re doing too with subcontractors, you know, typically we’ve always found out, Hey, what’s the lead time on material? You know, before I release you with a contract, you know, usually the subcontractors are honest and they’ll say, well, you know, it’s four weeks, but you know, right now we got the holidays coming around. Typically manufacturing plants will shut down, you know, the week of Christmas, the week of new years, you know? Um, so we’re always trying to be transparent and honest with, you know, our owners and then also with our subcontractors, trying to understand, you know, what might delay us and what is our options. So we always try to, you know, take a step back and understand the project as a whole and try to realize, and, you know, like I said, be transparent with our owner, Hey, here could be some issues. Um, but we don’t know until we started with construction place in order and start tracking that shipping number. So
Nathan Young (34:30):
As a subcontractor, these hallmarks transparency and honesty is not something that, again, like as a subcontractor, it’s not something we can just assume. It’s something that some GCs understand and some customers understand and frankly, some subs understand and like, it, it’s more of a people thing than it is an industry thing, right? Like you just have people who don’t work that way. And so you might work with a sub and say, you know, like when, you know, give me, give me the TNN estimate or, you know, what’s the lead time on the material stuff on your side. And they’re like, Oh, well, you know, normally it’s like three to four weeks and then that’s all they say, you work with that guy three or four times. Then you’re like three to four weeks is always six or seven weeks for, uh, how, how lovely that.
Nathan Young (35:22):
Right. And so then you bring in questions, like, are you doing this on purpose? Do you just always overestimate? Like, so now is my billing actually, you know, like how far up are we on starts to make you second guess everything as you’re dealing with and seeing it so incredibly important within what you’re doing to set up the project itself. How are customers responding? Are they concerned about working with you at all? And then after you’ve waylaid that, or maybe they’re not, then are they going, how much grace, our customer customers actually giving you right now? And is it more or less, how have those two things changed? Sorry, let me recap. One, our customer is more concerned working with contractors right now, too. Are they giving or taking work race?
Derek Clarkin (36:15):
I’d say working with contractors, I don’t know if they really know how the pandemic is affecting construction. So it’s our job to relay that information to them. Um, hence why we have the code or
pandemic clause, I should say, in our contracts now with them, which is just completely unfortunate and just overall, you know, and then with subcontractors, I don’t know if the owner really has a choice with the greatest part, because if a contract, if a subcontractor’s letting me know that, Hey, half of my crew has COVID, this is when I’m going to be there. Unfortunately just have to deal with it. You know, if there’s a way we can hire another person to try to help something along that, to complete their scope, but just to help it, you know, we would look at that, you know, you can’t just cut out a subcontractor that you’ve contracted for the project, just out of convenience.
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Derek Clarkin (37:10):
I mean, it’s just not, not fair. You know, same with materials too. I mean, the light fixtures, like I said earlier, they’ve been difficult depending on where they’re coming from, you know, some, uh, required components from overseas and it’s just made it difficult to get light fixtures where they were, you know, six weeks and other 12 weeks, we try to do our best to keep the project going. Uh, we had a challenge on a project here or really over the summer. Uh, I want to see the fixtures were released in April. I don’t think we got them till August. And we unfortunately, yeah, they were in sheet rock ceiling. So, and we can put anything in that, you know, we can retrofit later on. So we just had to be patient wait, unfortunately we were out of sequence. So we had to cover the floor, do extra cleaning and all that stuff. But either way, the general contractor needs to be a little bit creative on, you know, how they can help out their owner too, because we’re all a team we want to get through this stuff.
Nathan Young (38:09):
It sounds like what you’re saying is being transparent, honest, and frankly, uh, we use that word again, reactive doing those two things and constantly communicating that back to that customer has gotten you a lot further then sort of like trying to run the quote business as usual
Derek Clarkin (38:32):
High level needs. And a lot of our owners that we with I’d say about 70% is returned work with the same clients. So we have a report built with them, so they understand how we work and you know, what we do in regards to them having more respect for us or liking us more. I don’t know. You know, we do a lot of nursing, homework and assisted living facilities and stuff, and they have their own challenges. And to be honest with you, sometimes it’s even tough to communicate with them at times, cause they’re dealing with all the stuff that’s going up. So, okay.
Nathan Young (39:07):
I mean, I would always make the recommendation that you should be honest and transparent as much as possible with your customer. Kind of trying to catch you in a box a little bit to go do that.
Derek Clarkin (39:19):
I mean, there’s nothing wrong with over-communicating, that’s what we all try to do here, but in order to, you know, point out some unforeseen issue is, I mean, that’s construction. I mean, especially when you’re dealing with, you know, interior remodels or something. I mean, if you’re doing work in a building you’ve never worked in, who knows what you’re going to find.
Nathan Young (39:40):
I work in web design a lot. Obviously I regularly utilize the analogy of my time in construction to like building websites and how it will take on a project. And people will be like, website is just a website,
right? Like it’s and I’ll be like, no, no, no, no. It’s just like a building. Like we might get in there and we’re going to find some stuff and uh, we may have to clean things up or we might have to edit now, is it as complicated as what you’d like? No, Mo most of the time, most of the time, uh, there are exceptions, but I regularly try to utilize those analogies. And it’s like, I wish I wish that the type of grace that it sounds like you’re getting from your customers were kind of more common.
Derek Clarkin (40:30):
No, I mean, they’re all pretty much understandable, but you know, to your point, you know, unforeseens will always come up with a solution, but just how much is that solution going to cost?
Nathan Young (40:42):
Well, I think to me, the takeaway that you’re communicating the fact that it doesn’t seem like it’s something that has sort of like is a fire constantly, is that you’ve built such a rapport from being so consistently honest and transparent with your customers. Like, I’m asking you the question, you’re responding to it. Like it’s given rather than like, there is no adjustment. I’m asking you like, as if there’s some adjustment maybe that you would think of and you’re just responding to it. Like, no, this is just how you do business. And to me, the conclusion, right, the connection there is if you behave this way, you’re going to end up with these easier relationships where you have these opportunities to manage these unforeseens and be reactive rather than taking on this idea of being honest and transparent brand new, or, um, if you just live it as part of your culture, you’re going to end up looking at me weird when I ask the question instead of going, Oh yeah. Now our shift to being really honest and transparent, you know?
Derek Clarkin (41:53):
No, but that’s how you gain loyalty and trust. So, you know, I mean, just trying to coach, uh, people, you know, especially when you deal with owners that don’t completely understand construction or understand, you know, a certain specific items that you’re challenged with, you know, means and methods, you know, that’s, that can always be a challenge too. Right?
Nathan Young (42:14):
One last question in the marketing space, which is as it, as it, of course, as a GC, your marketing is in my experience. And tell me if I’m wrong, your marketing is primarily based on reputation. And then there’s, there’s generally a lot of RFP and bidding going on. Are you still utilizing exactly the same means? Would
you say, I know that you said 70% of your business is repeat, but that leaves the 30%. Um, and then of course there’s growth too, right? So, um, if you’re looking for growth at all, it doesn’t necessarily come from that, uh, 70 events recurring, what tactics are you utilizing to get growth and get out of the 30% right now?
Derek Clarkin (42:57):
So, uh, we’ve mainly been very, uh, old school, uh, utilizing a lot of, uh, Greg and Larry’s, uh, contacts going forward. You know, uh, we’re very handshake oriented, which obviously is a big no-no right now. Uh, and thank God for golf courses this summer, because I mean, nobody wanted to meet up for a beer or a cup of coffee. And right now, now that we’re going into the winter season, it’s tough. What we’ve been doing is we’ve been working with the marketing consultants who designed our website and, uh, is helping us with, uh, email, uh, web blast, trying to keep people in the know each month with, uh, you know, project showcases, basically an employee, not of the month, but just an employee spotlight and
just, you know, identifying, uh, some stuff that’s new in the industry. Um, so that’s what we’ve been trying to do is just reach out with mass email and, uh, just phone calls, just trying to stay in front of people. You know, I know people have been doing zoom happy hours. I’m trying my first one tomorrow. So we’ll see how that goes. I don’t know if I like to sit and look at myself while I have a sip of alcohol. I will see how that goes. I just find it really weird
Nathan Young (44:11):
Having a beer.
Derek Clarkin (44:13):
I miss the personal interaction, you know, and I think a lot of people knew, but I didn’t realize how much I enjoy talking with people until this pandemic started. You know, it’s a, it’s a, it gets old coming to the office and going home and every now and then going to the grocery store, you know? So in any time I get an opportunity to get outside and go see somebody, even if it’s at a distance, man, I cherish that right now.
Nathan Young (44:41):
Absolutely. I’ve been trying to schedule as many, like we have a mile and a half loop. That’s pretty near my house. That was of course, very, very popular to walk. And now it’s much less popular. So, uh, have been trying to schedule as many of those, even if it’s just my wife and kids, I have two young daughters,
a five-year-old and a two-year-old and just like to get us out there and to get walked around or to schedule something with a friend and the sidewalk is really wide, but just even that has been a sanity piece. You said something, you touched on something that I want to just double check on real quick. And then I have one last section, which I call fire questions. Do you mention just like that you are investing in your email infrastructure and that you’re trying to utilize your email list. Have you seen that be, I know like the sort of the old school method, uh, the handshakes, the zoom calls, the w you know, the one-to-one interaction, but have you seen any usefulness yet? Are you far enough into it to go, Oh, Hey, communicating with these people on our email list really has generated some conversations for us or kept other people in the loop in a way that we, we might not have before.
Derek Clarkin (45:55):
I think it’s been really positive, actually. It’s, uh, uh, we’ve gotten a couple of, uh, reviews on Google for it. Uh, we did, uh, part of the email thing too, is our marketing consultant is helping us with our LinkedIn account. And, uh, uh, we had a nice post on there and our project we recently completed. And on that, uh, that post, we did a 3d tour of the building, uh, which was really cool. Total three 60 imaging. You can go throughout the building and, and check it out, just a beautiful showcase, uh, piece that we did and really proud to be a part of it with that. We’ve gotten quite a few views. I want to say last time I checked, it was over 1700 and just several comments, um, from people that we know. And I think stuff like that is opening up people’s eyes to what we do. I mean, you know, I won’t say we’ve flown beneath the radar. You know, there’s a lot of companies out there that probably haven’t heard of us, but in regards to the marketing aspect, we haven’t really stepped up the online presence until recently. We’re seeing some positive feedback on that. Also some constructive feedback too, which I think has been really good,
Nathan Young (47:02):
Got to have a little bit right. To take it to that next level. I’m encouraged by that. I, I mentioned this at the, before we started recording, but just how much this combination of the trades and technology and sort of, and combining those two things together, I think can take things to the next level. But also, as we’ve mentioned, even in this conversation, like how you can sort of get locked into those old school quote, unquote mentalities and it’s awesome and relationship building, but then we really can use some of these new tools to sort of take things to the next level or get, or get conversations with people we wouldn’t have otherwise like you and I met on LinkedIn, which I really appreciate, by the way I have a section here, I call it quick-fire questions. I’m going to ask you a couple of them. They’re supposed to be off the top of your head responses. So lots of them are intentionally phrases. Yes. Or no questions. If you feel like though, which I’ve had before, if you feel like you need to break out and give a little context around that, like you’re totally fine. Um, but I’m just gonna throw them at you and we’ll see how it goes texts. In this case, in your case, subcontractors, schedule themselves, or have to use the project manager. If he’s a branch manager, job scheduling software, project management tool, do you write,
Derek Clarkin (48:20):
To be honest with you, we’ve gone old school with the spreadsheets. We do use pro core, and we also use a Microsoft project
Nathan Young (48:29):
To allow customers to leave you voicemails.
Derek Clarkin (48:31):
Nathan Young (48:31):
What is the guaranteed to customer call back time?
Derek Clarkin (48:36):
If a customer leaves a voicemail, I tried to call him back right away. Do you ever get leads calling your phone?
Derek Clarkin (48:43):
My office phone sometimes, but that’s about it.
Nathan Young (48:45):
Have you ever booked a job if a lead has left a voicemail?
Derek Clarkin (48:50):
Yes. I just can’t remember specifically what it was.
Nathan Young (48:53):
Do you allow customers or subcontractors to send you contact forms through your website? And what response time do you hold for the contact forms?
Derek Clarkin (49:05):
One to two days.
Nathan Young (49:05):
Do you allow texting with your customers or sub?
Derek Clarkin (49:10):
Nathan Young (49:10):
Do you? I think this is obvious, but do you collect customer emails?
Derek Clarkin (49:14):
Nathan Young (49:15):
And then do you use the emails you collect?
Derek Clarkin (49:18):
Nathan Young (49:21):
You’d be shocked. How many people go? Yes. No.
Derek Clarkin (49:24):
Nathan Young (49:26):
What do you think is the best platform to spend a dollar on marketing right now?
Derek Clarkin (49:30):
Say between Google and LinkedIn,
Nathan Young (49:32):
Do you ask every customer for an honest review?
Derek Clarkin (49:35):
No. And I should.
Nathan Young (49:37):
Okay. That was going to be my next question is, should you, what’s the number one thing you wish subcontractors could remember when working for the first time for a new general contractor
Derek Clarkin (49:47):
That we hold the contract, all information goes through us, top
Nathan Young (49:51):
Three things. You wish every customer,
Derek Clarkin (49:54):
New design changes, change orders and unforeseen conditions.
Nathan Young (49:58):
And if you could recommend three books for other business leaders in the trades, in home services, what would those three books be? Well done?
Derek Clarkin (50:08):
Probably traction. I did like the Gino Wickman book. I thought that was good. Good to great. Which I think is pretty standard and leading change.
Nathan Young (50:17):
Leading change. Who is that by tool. Okay. I haven’t heard of that one before, so I’m always interested. I’m personally a voracious reader. Oh, okay. So, um, I’m asking for a tray, I’m asking for anyone who would be listening, but I’m also asking for me, well, I find it funny cause I got all my books on my shelf there. Right. I don’t know if you can see under my camera that a bunch of them out there. I don’t know. Audio book guys. So most of mine are digital. Who do you think we need to hear from who should I try to get on this podcast next? Somebody who might give some good insight. Uh, John Jensvold awesome. Anybody else? You want to shout out my wife because I love her so much and she’s patient with me, no, to, uh, my partners and, uh, the whole team at prime, just, uh, great cohesiveness and really appreciate all that they do, uh, whether supporting or working just great people.
Nathan Young (51:12):
So, and then also to have, or owners that we work with really appreciate working with everybody and the work they’ve given us and we strive to do right. So in our entire conversation, I’ve just been so impressed by how much you, and it sounds like your team and your culture take some of these really high level values, transparency, honesty, cohesiveness, uh, you know, just like GSD being reactive, doing what’s best for the customer. It seems like they’re ingrained into who you are and who your team is. And not just how you work with customers, how you work with each other and how you work with subcontractors. It feels like you would be a GC that we would like going to work for. And so it’s been so much fun to talk to you and to hear that and to hear how much those things are, just sort of like losing out of the answers that you have.
Nathan Young (52:04):
If people want to know more about you or what you do, where can they find you that’d be www prime, gc.com. Awesome. And then also you can find Derek clerking on LinkedIn. Uh, just like I did. And is it, uh, last call? Is there anything else you want to throw out there, uh, before we shut it down? No. No, just appreciate you reaching out. I appreciate the opportunity to talk to you and Nathan, so thank you very much. It was absolutely fantastic. I took so much good advice from everything you had to say. You’re a fantastic guest, uh, so much wisdom. And like I said, I’m just, uh, I’m a little jealous of how embedded so
many of these, uh, these respectable things are just so obviously embedded in your culture. Hope that if I work in subcontracting again, at some point that I get a chance to work with the GC, uh, who is just representing a strong team as you had. So really appreciated having you on the podcast. Thanks so much, Jared. I’m going to shut it down. Okay. Thank you.
Show Outro (53:11):
This has been another episode of the home service leaders podcast, and I hope that this inspires you to take the next step in growing your business. If taking an honest look at your marketing and getting a no strings attached plan, sounds like the next step for you. Email firstname.lastname@example.org or just text (219) 315-6476 and say, HSL thanks for listening. Go kick some.
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