E12_The power of the pre-construction process

Hamish: [00:00:00] All Right, everybody. Welcome back to another episode of the Mindful Builder podcast. today I am going to be interviewing Matthew Carland, who is also my, fellow host of the Mindful Builder podcast, Matty, how are you mate? It's

Matt: I'm good, mate. I am very good. We've had a great week, got a sub floor down. We're getting some pretty positive comments back on our podcast at the moment. So I know both of us have had some people reach out who we probably, I know, especially myself, people I never thought would reach out to me about it, have reached out and really impressed by it. it's really, really encouraging.

Hamish: it's just nice to know that, uh, some of the topics that we've been talking about are, um, are being helpful to some people. And look, our motivation for this podcast is to educate, learn from some of our experiences, uh, you know, and hopefully that there is a little bit of information in these episodes that everyone can sort of take something away from, , which Leads me to this episode where I'm going to be talking to you about your pre construction process. I

Matt: Yes. So this is something we've been doing for, [00:02:00] I was trying to work back maybe like seven, eight years. So before it was cool. , and it's something that we've refined over, over time. And I probably thought when I first started it, it was a way to get in with a job, and think outside the square, but it's turned into way more than that.

It's definitely turned into like a really powerful tool that. So that really, if we find we're not involved, and when I say we, I'll actually broaden that to builders, that the project can go pear shaped very fast. So,

Hamish: whether or not the lines on paper actually make budget. , but it's also, I know in our experience a really great way to build a relationship with the client. Now, if I was a client, Matt, and I reach out to you, what happens next?

Matt: I'll generally direct everyone to my website and we get a form. And then what we will do is flip another form back to the client to see, we want to gain as much information on our clients as possible. So, whilst they're choosing to work with us, we also choose to work with them. I refer to ourself as a third wheel in any relationship that we're going to be involved with the client for 10 years because we've got to sign off on it and we want to be part of your family.

So it's like dating. We want to make sure we get along, that we click, that there's a certain level of rapport and we've got this relationship that we, can work together because if we can't work together, it's going to be a very long build. And it's not something that I want to put the stress or anxiety on myself or the clients.

It's not fair. I'm not for every client. like I'm for some people, I'm not for some people, but again, that's just like dating. So we'll grab a coffee. We'll have a chat if they fit our brief of like what they're after and the project sort of.

Sparks our interest. , and it's in the location we will work. We'll grab a coffee. So that's just literally again, back to that first date principle, grab a coffee, have a chat, get to know them a little bit better, and then Halfway through that, I'll decide if I think I'm for them or not.

, sometimes I'll be very honest and say, I don't think I'm for you. , and then other times I'll be like, look, you've ticked all the, the box. So you're a nice person. The project sort of suits what we're after and it's then about more talking business [00:04:00] back end stuff. So. We will start to talk about the budget more so, and I'll give him some very direct advice on whether I think the budget meets the brief.

And then also explain that the budget does not mean that's your build cost. The build cost is what it costs to build, and that is why we start to go through this whole pre construction process. So, I will sort of outline the process of what we follow. , we have two phases, what we refer to in our business as our explore and grow phase.

So the explore is to the build and understand if it's viable. think of it like a feasibility. The grow phase is to, practically see that project grow into a building site. , so in that, that phase of sort of the explore, we we will explain to the clients that yes, we charge for our time.

We charge for our expertise. the first stage is really to understand if the budget meets the brief and understand that site in way more detail. So, , we will sort of have these hard conversations very, very early, , and put it back on the client to say, hey, like, you've, you've said the budget's 800, 000, what you've sort of shown us is 1.

5 mil, like, is there wiggle room or is this the hard budget that you can't move from? So we're, we're totally happy to, , sometimes disappoint because I'd rather give that truth, honest feedback very, very early than later in the piece when it's too late and the clients have spent 60, 70, 000 on design days and engineering and everything else, and they can't afford to build it.

So then what will happen is we'll sign the contract up a bit of an early contract involvement, sort of contract, something basic. It's nothing too, too crazy. It's just a sort of. Have a bit of skin in the game for the clients to sort of recognize that they understand that we are professionals and We are experts at what we do and we will then go out and do a site investigation So we want to know everything about that site The first thing we look for typically where we work a lot of the time We've got some very tight streets.

So we're understanding access. We want to understand if does your power need to go overhead or underground? Is there a combined SOAR on your property? [00:06:00] Where's that going? What needs to happen? So you want to gain as much information on the property as possible because like you Haym, you probably hate dealing with variations and that stress and anxiety of bringing those unknown things up.

So, the whole idea is to limit that. , they're going to have to happen regardless, , whether we saw them early or not, but at least when you count, we can account for them in the budget. So. Once we start to hit that next phase, which is we start to price the project up and we give them a bit of a brief overview of the project.

we will sort of run that with our estimator. She'll run all the numbers. We feed her some data. If there's some things that we're a bit concerned about or wanting to know more on the project, we might get a bit of a rough idea of a price. So for example, typically windows or some types of cladding.

And then we just base it off historical data, some basic rates that we know might work. And what we do is we're creating a sort of visual. diagram for the, client's understanding of what their, build is going to cost for what they've currently drawn. All right. Now, hard part of that is a lot of that time, and I'd say 90 percent of that time, , that number is over their budget.

Okay, that's fine. That's totally totally fine. It's normal. It's nothing to freak out about because we all spend more than we want to spend. Look, I'm about to go through it with my own house and spend more than I really would like to spend. But just allows us to have this rather than throwing darts at a dart board and we're really poor dart players trying to hit a number.

We can actually start to understand the project in more detail on what this, what this will cost. So. The reason for this, it gives the clients two options. It gives them confidence to, to go forward and go, hey, yeah, we can afford this if we make these changes or we feel comfortable with that number, or they can pull the pin there.

That way they're just not going forward too much. Uh, they're not going forward and, wasting a lot of money. It might mean they need to go back to the drawing board and make some changes and, and think through the situation. But it just creates this whole, uh, level of, um, understanding and clear clarity or cloud of clarity around the project itself at that point.

Hamish: it's [00:08:00] funny how close our, pre construction process runs to yours.

Matt: there are a lot of bits and pieces also added in there that I've skipped over. Like, I'm not going to go into the full nitty nitty

and go to crazy depths. But yeah.

Hamish: I want to just circle back to something that you said, towards the beginning, where you're sitting there having a coffee with someone and you might decide at that point You don't think the project is fit for your business now, you probably have no doubt some metrics around How you go about making those decisions quite quickly and they might be Budget it might be location.

It might be I don't know how they're where they're had or something like that Could you maybe talk through more about how you would come to that decision?

Matt: Personality is a big one. If we're not clicking and if it's awkward or I feel you're not giving me all the information, you're trying to hide something or you're like, oh, I've built multiple times before. And my question is like, well, why aren't you using the builders that you've worked with before?

there's certain things and certain triggers and things that I know to look out for. , and understand what they're trying to get out of it. And I, it is, it's a bit of a gut feel and your gut feel is generally right, I find with clients, like I'm very, very picky it's almost like once, once I get that gut feel, I pull the pin instantly because it's like, I have to be involved with these guys for so long and I need to give this project my a hundred percent attention and if I feel something's not there, it's just best to call it early.

Like it's better for them. It's better for me.

Hamish: hundred percent. and I'm sure you had that same narrative with people that you're meeting with for the first time as well. Like it's two way, right? It's if I'm really vibing on a project and they're not vibing with me, or if you're really vibing on a project and they're not vibing with you, it's just as important for the client sitting in front of you to be able to make that decisive decision as well, because at the end of the day, The pre construction part of it's one thing.

Double that time and then into infinity is when you're pretty much tied to that project [00:10:00] because it's not just getting the design done and then building it. It's all the maintenance and all the other stuff that comes along with being a builder and being tied to that project long term. So it's so important, in my opinion, to have a really great, solid relationship with your clients.

Matt: isn't that just any relationship, whether that's your husband, wife, your children, your friends, like you, you want to be open and honest. I think probably the one of the big ones for me is, and the biggest deterrent for me on, and this happened not so much anymore, but in the past is when Clients don't treat us like professionals.

they're treating us as just tradies that don't know what they're doing. And they can just get rid of us and treat us and throw us around where I love it when clients actually come to us knowing that they're getting good advice they respect the stuff, the advice we're giving them.

So that's a really, really big one for me , and that was something that I, it's probably. Definitely died off a lot. I think that, one that's maybe around marketing that, that people understand that we are professionals. So the clients I'm now attracting are just treating us that way anyway.

But one of my biggest ones for a number of years was the, the biggest deterrent was like, Oh, I've built multiple times. that's the one where don't tell me how to do my job. I know what I don't know, but I don't go in there telling you how to do your job.

So, that's always one that deters me pretty quickly.

Hamish: I think a lot of that actually comes down to, you know, probably touchy on why it's so important for earlier contract involvement, and that's actually been able to educate clients, you know, at the end of the day, we do this every day. We're at the coalface of costing. We're at the coalface of building.

I mean, if you went and saw a surgeon about a shoulder injury and they turned around to you and said, you know, You have a tear in your shoulder. You would be like, you know what? You are the professional. I trust what you're saying. The scans are telling me that you're verifying that. And your recommendation is to get shoulder surgery.

I mean, in my opinion, the same should be given to builders when they're giving cost information back to the client, and it probably [00:12:00] leads into Question for you, Maddy. And that is how early should you as a builder be involved in a project? Is it, is it right at the end when the documents are completely prepared and you can just give them a price?

Matt: No, the earlier the better. And maybe I'm biased in this, but this is just going off. Not even only my data, like anyone that I know, jobs that, where builders are involved in early they're on budget, they're on time, the relations, is still there at the end, , it's a great atmosphere, everyone has championed that project, and it was a success.

you get in early, that is just the chance of that happening is that such a high percentage compared to coming in late. Because if you're coming in late, it's an uphill battle. People already set in their ways. You haven't been, the people haven't been challenged the whole way through the build.

Well, if we're involved in early with an architect or building designer, we can bring in say landscapers, uh, we can bring in engineers, energy consultants, interior designers, anyone, and they all have their own unique expertise that can challenge a situation and. And really get the best out of the project.

So getting a builder involved in so early, definitely the projects that from my end that that's happened, they've just been a smooth sailing the whole way. And there's projects where I've come in quite late and we've built them. Yeah. There was a lot more hiccups along the way, where the relationship with the clients was awesome, but there was more things we had to fight, against to, to get the build done to a standard that we would be happy with.

Funnily enough, I was chatting with someone late last year. I actually think there's a huge trend. And I've seen this in my own data where clients are coming to builders before they go into architects and building designers to find, they find the builder they want to work with and then go, well, who do you want to work with?

And I've seen this be a huge trend. I don't know how

Hamish: Yeah. Yeah. Yeah. No, no. We're, we're, I would say that probably 60 percent of the projects that we're getting inquiries for, uh, don't have a designer yet. And they're usually leaning in on us for our recommendations for, um, who we should [00:14:00] work with. And I guess that's a bit of an honor because at the end of the day, they're then valuing what we're bringing to the table.

And then, uh, I guess, see the projects that we're executing, and then they're leaning on our, expertise to say, look, we think this project's for this designer or this interior designer or this architect. You said something before about building relationships.

You also touched on, variations. Do you think, in that pre construction phase, , there's a really great opportunity for you to understand that project intimately, which would then reduce the amount of variations as the project goes?

Matt: Yeah, I'll look at a project I have at the moment that we're about to get our final set of, like, documents ready to final, final price. I have built this house in my head a hundred times over. I know at the moment every nook and cranny in that house. I have 3D models on structural drawings.

I have 3D models of the house as it's finished. I Can feel what it looks like. can see the problems before they arise. Now, we're not going to get every problem ironed out before we get to site. That's just unrealistic and shit happens and that's okay. especially when we're in the soil and the ground, when we don't have x ray vision, we can do soil tests and we can understand the soil profile.

But we don't have that x ray vision to know everything, but all we're doing is reducing the risk and the quicker we can reduce the less conversations we have to have those awkward conversations with clients. We like, Oh, that wasn't allowed for when we probably should have known that. sometimes yeah, shit just shit happens.

And that goes back to my project at the moment in, in Yarraville where. When we were digging in the ground, we didn't know it was an old tip. None of the, we had two different soil tests and there was no indication that it was along those lines, but that's a perfect example. Shit happened and if I went back again, there's nothing I can do differently.

But sometimes you do pick up things, go, maybe I can pick that up. And that just gets added to the list that you add. Next time you're on site and that pre site investigation, like I better check this. again, it goes back to mistakes. You, everything that gets added to that list is purely [00:16:00] based off the mistake you made in the past.

Yeah,

Hamish: during pre construction? allows you to have these difficult conversations during construction because you have a solid foundation already. Imagine if you were in a tender process. and you're the one of three builders that got selected, or you are the one builder out of three that got selected, you haven't had an opportunity to, build a relationship with that client, then all of a sudden you hit a pile of asbestos, or you hit a pile, in your case, of old EPS foam. Turning around to them with no previous relationship and saying it's an extra 40, 000 in variation, that's a lot harder to get across the line, or it's a lot harder to convince them that it's the truth than if you had a really amazing relationship over 12 months prior to that,

Matt: so this is a really good question because I almost would flip it because when you have the relationship you care about that client and you do not want to have a variation because you don't want them to spend money they don't want to. If they're coming to me and going, Oh, Matt, we want to change all our walls to marble walls.

You know what? You made that fucking decision. That's not on me. that sort of old school tender process, it is, it's a race to the bottom. you are not valued for your time because most likely they're not charging. So your expert opinion is sort of void and they're just like, well, we just need someone.

You can build it. So when you're on site, then you don't care about the client. You won the job. You did as cheap as you could to win the job. And you left everything out because who cares? That's not my problem. So in that case, I'd probably find it easier to have that conversation because it's like, well, it wasn't on the documentation that I was provided.

But when you're involved earlier on the flip side and you have that relationship, Yes, it's easy to go to them and you can have a real honest conversation and the variations most likely will get ticked off but it sucks so you don't want to have it because it's like, well, you get really disappointed for that client.

Hamish: you know what, totally. But you know what, this is building and shit [00:18:00] happens. you've got an existing strong relationship there that you can have these courageous conversations with your client, even though they're shit, right? You know that they're shit.

You don't want to have the conversations, but you know that the relationship is strong enough to be able to get through a 30, 000 or 40, 000 variation, an unforeseen variation. whereas I reckon if you didn't have that opportunity beforehand. You hitting 'em with a 30 K variation, they're all of a sudden gonna be on the back foot for the rest of the project.

Matt: Oh, totally. So, I'm gonna put this back on you. When you get a job from the moment they, you get a job from the moment they hire you. speak to you before they get on site. How long before you get on site, would you say on average?

Hamish: Minimum 12 months.

Matt: All right, cool. how long is your average build time?

Hamish: Uh, I'd say 12 to 14 months.

Matt: So most likely, if it's a minimum 12 months, you have known the clients more before the building stage than when you're actually building the house itself.

So you actually have that relationship is already strong at that point when you're starting the build. It's just like you already know their coffee order.

Hamish: absolutely. And you know this is where I think, building becomes enjoyable because you've had an opportunity to get excited about their dream. You're invested in their dream. Shit happens. We get that. We can't avoid that. Now, as a builder, we are one of many consultants that are involved in building.

The pre construction process, but we've also got our team of trades and contractors that we have, in our team. When is a good time for them to get involved in the pre construction phase? And I

Matt: think that's something that I manage and that's when I will call upon them when I feel like I'm out of my depth. if I've got, for example, a really funky roof detail with some box gutters, I'll call my roofer and be like, what, what are our limitations here? Can you cast your eye over the project?

What issues do you foresee on this? a common one for me is when we [00:20:00] potentially are looking on a site and the plumber, I'll be like, hey, the plans are showing the old plans on what the 1800s is the old combined drain next door. And It's all in feet and you can hardly read it. And anyone that knows the plan I'm talking about knows exactly what I'm saying.

we can get them out, get a camera and located down the drain, understand everything that's happening. So before we get on site, we've already got that data and information. So data is king data tells us everything. So I will bring them in as they needed. I know that most of the projects now electricians, we're getting probably involved early up less, unless it's on a project where we have to either upgrade transmission line, or we got to.

They're off grid. That's when we bring them in. But if I'm a general house, we know most of the time the power has to go underground. I know how to apply for the pit and all those sort of things. We know that we're sort of stuck down one road down there, but I pick and bring in clients.

I pick and bring in trades as much as I need and lean on them for advice. I'd say most likely once we get to that, that full price around, that's when we start to lean on them. And I'll be like, Hey, can you pick this apart further? Give us some recommendations on substitutions if you see anything fit that isn't going to change anything, but just it's a better or cheaper option.

Yeah,

Hamish: being involved as the builder in that pre construction phase with the knowledge that you're actually working to get the project to site rather than tendering for it. Is it, you have a little bit more leverage with your trades to say, Hey, you know what?

This is actually a job, help us get it to site in the best possible way. So we can be profitable and you can be profitable and that we're not going to be missing anything and have to give the client a variation. Like I think that's , a really powerful position to be in not shifting the power back to the builder, but it's a powerful position for everybody because there's a greater understanding and intimacy in knowledge of that project.

Matt: so data driven with my brain. I'm an analytical thinker. So data is king. The more information I have, the better. It [00:22:00] just makes life so much easier.

Hamish: 8 months of pre construction, right? You've got a great relationship with the client, you've tested their budget, they're getting excited, your trades are getting excited, you're working towards a start date. At what point can you say to the client, you know what, we are ready to give you a final price for this contract and we are ready to start.

What are the key metrics that you identify within your business that tells you that you're ready to go?

Matt: it's a really hard question because sometimes you really want to push that client quicker to get them on site because there's some, you got another job that's ready to rock and roll that's pretty much locked in at a certain date, but you want to get in before it and you might rush some things through.

I'm about to change everything and go the moment I will finally price everything is when you have every bit of documentation finalized, ready to rock and roll. Because I'm sick and tired of, I will just change this on the fly. And you know, everyone's doing it out of the club, out of the project's best interest, but that's where she gets the fan and things get missed and clients don't know what's included.

So I'd rather piss everyone off for five minutes. And so the project down for a week or two, wait for it. It just, it gains that clarity going forward. So I will now practically, once I would call it like the old school tender phase with all the documentation gets sent out, that's when I'll price it. I still won't give him a start date because we might have to do some more value management at post that point.

We roughly know when the project might start, but there's also keep things like banks who fucking awesome to play with. They are a pain in the ass at the moment where they might take four to eight weeks. , if the clients are working with them, and then you've got the building permit that might be still finalized all those things that need to go ahead with that plus contract.

So. That what you'd anticipate, maybe 12 weeks can quickly go to 16 to 20 weeks. So we roughly have them as a tentative date and we're hoping to start the project. So, for example, I've got one that we were looking in May for a few unforeseen reasons. The project's been slightly delayed, so we've had to flip some things around.

But [00:24:00] that sort of maybe June, but we now know that it's most likely going to be in July. That project starts and we've had honest conversations and it's just about communicating, keeping client up to date with, we think it's starting here, Hey, I'm pushing this back another month because I think that's being realistic.

The worst thing you can do is not communicate. And then all of a sudden they get the documentation, you get the price, you sign the contract, and I think we can start the more you can communicate, just over communicate. If you're a young builder out there or any builder, really just be honest with the client.

Just be like, Hey, I'm pushing this back because. Things have been delayed for a few reasons, so I'm delaying you so we can start it when it suits the project. Another key one is like, for example, when you have, depending on foundations and footings and Christmas and things, like, I'm not starting a project the last week of December.

That makes no fucking sense. are certain times that you can push and pull a project. I'm not going to also start one most likely in the first week of January. But we, we just use what you know and experience to pick and choose. And just again, going back to being open with the client.

Hamish: They start in October and February, they don't start anywhere in between. So looking into your crystal ball place, , how do you see the role of contractors in the pre construction phase of evolving in response to industry trends and changes?

Matt: It's a really good question. And it's one that I think that is based off again, mistakes and people like you and I and our other builder friends sharing information that we learn off each other's mistakes. I think it's one of those things where if someone else creates something really cool as part of their pre construction process that we'll add it in and understand more about how they've done it.

I think the key thing is you have so many builders now doing this. But I don't feel all of them know what they're doing. They just do it to be like, Oh, we're involved. And it's super, important to have a clear process in this whole thing and know exactly the next steps. I can pass this off to anyone on my team and they can know the next step.

I think, I think the future is where we have a lot more of 3D models. And. BIM [00:26:00] files and all those other things. They're really important and they're so helpful on the project. I think that's where we can further reduce the risk even further on projects around engineering. And, and this is going through my experience building iHouse with my wife, that I can get a set of plans, I can close my eyes, I can build it.

I can't expect my wife to do that. I've been doing this for 10 plus years. I should, that's my job. I should be able to do it, but I can't expect normal clients or every client, everyday clients who have never seen a 2D plan. Before and some 3d elevations to be able to build this thing. They don't know how high the room height is or the way that the sort of orientation of the house might work or the way the sun comes in, but we can, we can pitch that in our heads because that's our job.

I think that is a huge thing. That's going to come in. I think the big one is clients and now, and people in general are respecting builders and they're treating them like professionals like they should, but that's only because builders are treating themselves as professionals.

The moment that you treat yourself as professional, people will come to you for advice. As long as it's solid and you can back it up with information and data and historical evidence. Yep, sweet. think it's a learning thing. I think it's something that, will, continue to evolve. I think it's something that will stay in the industry.

It's definitely in the commercial side of things and it's only just worked its way and it's in its infancy in the residential sector. But I think it's something that you'll see a lot more happening residentially.

Hamish: my opinion is that, tendering will be a thing of the past and that everyone will be some kind of, uh, ECI or early contractor involvement or, or something along those lines.

Matt: I think if you want to have your builder feel respected, pay them for their time. Because I tell you what, if you're a client and you don't go to work and work for free, so expecting a client, a builder to quote for free, or in some cases pay five, 6, 000 extended off to go get it estimated. And they have it out of their own money.

You know what? Pay their time. Respect them. They're going to give you more information. You're going to get more out of them because they feel like they're involved and respected and they're being treated like professionals.

Hamish: whatever fee you end up paying your builder, [00:28:00] if they can't save that money for you, They're not doing their, not doing their

Matt: Oh, so

Hamish: I'm gonna pick the kids up. So, um, so, see we're real people everybody.

We're real people with real responsibilities like picking kids up. Thanks. Thanks for listening again. I'm, uh, I'm off to pick the kids up and take them to karate.

Matt: enjoy swimming, swim between the flags. Yeah,