Show 5 with TJ Elbert

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

Show 5: TJ Elbert with Elbert Construction shares his past mistakes and key things he is doing now to build a great exterior remodeling company

Kyle: Welcome to Remodelers on the Rise. I am your host, Kyle Hunt and alongside me is my co-host Ryan Paul Adams. What’s going on, Ryan! Ryan: Hey Kyle! What’s happening? Kyle: Not much, not much! So let’s get right to it. Let’s get started by introducing today’s guest, who is TJ Elbert. He is the owner and CEO of Elbert Construction. They are one of the fastest growing exterior remodeling companies in the Indianapolis area. So he’s the first exterior specialist we had on the podcast. And TJ’s been in the remodeling industry for over 16 years. And is a 2013 Bright Future Award Winner at Owens Corning. You got that hanging on a wall there, TJ? TJ: Actually the award is not hanging on the wall. It is kind of made of glass so it just sits on a table right now. Ryan: Like a Grammy or an Emmy over there. TJ: I don’t know if it’s that special. But it is a pretty cool thing to get. It’s nice to have it displayed. Ryan: That’s great! It is a testament that you are doing the right things, for sure. Kyle: Well, thanks for joining us today, TJ. The focus of the show is really about you, your business and your experience. I just gave you a quick introduction and I’d like to turn it over to you in a minute now. Briefly tell us about you more personally, so they know who they are listening to and also your business. TJ: Sure. I got into the remodeling business when I was 18. That’s when I really started. I’ve done a little bit of everything.


I grew up around contractors. A couple of my uncles are custom home builders. My dad was in a supply business and he worked first in lumber yards and Lowes for 13 years as a manager there. So, I was familiar with building products. Kyle: It’s in your blood. TJ: It does. It is kind of in the blood. Exactly. When I got to the roofing side of it, everything just came so easy it seems. I thought it was lot of fun. Ryan: So the remodeling business is easy. All right, we’ve got to get to the story then. TJ: I should have said, it came easier to me than some other guys who didn’t have any experience that I was working with. Ryan: Sure! It’s probably a testament to some of the things that you are doing, which we will get into here as well. Kyle: On the Remodelers on the Rise, we ask a series of questions that will help our listeners learn from you, someone we consider as a successful remodeling entrepreneur. Ryan, why don’t you go ahead and start it with the first question? Ryan: All right. TJ, can you share a success quote that you live by and an example of how you may apply it to your remodeling business or your life. TJ: It is one that we probably all heard in kindergarten. Treat others as you would want to be treated. I feel like it is a pretty good one to go by. Another spin off of that, when we’re working for somebody, treat them the way that you’d want somebody to treat your mom if they are working on your mom’s house. Kyle: Practically speaking TJ, what does it look like for how we approach or how we treat the homeowner? In your case. TJ: I don’t know if you guys have worked for a crew. I am sure you’ve probably heard the statement, “I couldn’t see it from my house.” When you’re in those types of situations, you kind of have a gut check and go, “You know, let us do it right.”


Even if it takes a little bit more time or whatever. That on the labor end of it, I think, as a business owner looking at it, I try to treat employees fairly and in the way that I’d want to be treated. We’ve all had the experience in working for other people where sometimes you feel like you are getting the short end of the stick. So I just try to be fair basically. Ryan: I think it’s important because in the remodeling industry, it’s one of the worst rated customer trust industries in the world, right? So having that motto is really, really good. Because there are so many bad contractors out there. You could easily differentiate yourself just by doing the right things. Kyle: There are 2 things that I popped out from what you’re saying TJ. Number one, just last week I was meeting with one of my long-time clients. We were looking at 2013 - the year that was. We were looking at his financials, review and all that. We were looking at the net profit down at the bottom and something came up where he said, “You know that net should be looking a bit better but this year, I took a hard look at things and I’m working with higher caliber sub-contractors. They are doing better work. The quality is so much better. I am not making so much money. But the experience for the client, my stress level is so much better.” And he has also a few employees who he bumped up, that he gave raises to. And that, when you treat your employees right, which is what you are getting at there, a lot of other things can fall into place because of that. TJ: Oh sure! Kyle: And number 2, you’ve mentioned the thing that, what was your quote again? Treat others like what you want to be treated. That you learned that in kindergarten. It’s kind of funny because I was driving our 5 and 7 year olds to school earlier in the week. And by golly! If I didn’t teach my kindergarten, second grader that exact rule this week. That was hitting present day for me!


TJ: All right! Kyle; Share a story of a time in your journey where you encountered failure. If you could take us at the time of your life and tell us the story and maybe share to us some of the lessons you learned from that. TJ: Sure! Before I went out on my own and started Elbert Construction, I had done quite a bit of painting in College. I worked for a company called Painting and Building Maintenance Company. I did a little bit of everything there but did a whole lot of painting. And I worked for them about 5 years (4 to 5 years). And then, I’ve decided to start a property maintenance business. I moved to a town that was about 4 hours away from home. There were a lot of lake properties, vacation properties there. I thought it was a great idea to start a property maintenance service taking care of all the lake homes that were vacation homes where people didn’t want to spend their weekends taking care of their house. They wanted to spend their weekends playing in the lake. So I tried to do everything for everybody and it didn’t work out too good. I was mowing yards. Doing leaf removal, putting in boat lifts, putting in docks, taking them out for the winter when the lake froze. And then, I was doing everything – pressure washing, cleaning gutters, did a lot of painting like painting houses, staining decks and building decks. Kyle: Were you waking up everyday excited about life? TJ: Right, yeah. Ryan: Not so much. TJ: We were trying to do everything and it was really brutal. I was waking up, starting at about 5 AM. And doing my own bookkeeping on Quickbooks. Some guys would meet me at 7 o’clock. I had 2 guys who are part time College students and their hours were really kind of just hit and miss. Kyle: Sounds like a recipe for getting burned out. TJ: It was. It was.


So I got really burned out on everything. I was running from 5 AM to dark everyday. That’s exactly what it was, I was getting burned out. Generated a lot of business, there were about 93 people whom we were doing working for in the first year. And I was getting a lot of calls but one of the mistakes that I was making is that, not that you can’t operate this way, but it just didn’t work for me. When I was bidding on jobs and paying by the hour, then that worked out if I was there. But if I wasn’t on the job, then I was losing money, basically. And I didn’t really see a way for that to get much better. Kyle: So it’s one of the mistakes. What would you say probably be the biggest mistake out of that or the failure came in because from the outside, generating business, doing a lot of things, having a lot of clients, what was the big failure? What was the big moment of realization that this isn’t working? TJ: The big realization was I had a guy that I trusted. It basically realizing that I didn’t have anybody who really I could trust, who could help me out. I didn’t know a lot of people in the area and so there was a guy I had trusted. At that time, we had 25 yards or 30 that we mowed and I let him take my truck and mower, trailer, all the equipment to go around and mow these yards. And I was working with the guys doing other stuff. But that was how I was managing it, just to be able to get everything done. I found out that he was mowing other people’s yards with my equipment. By the hour, he was getting $30 for these other yards he is mowing. Kyle: This is kind of pointing back to what you were saying earlier which may have been a focal point for treating people the right way, treating employees the right way. In that case, it was the reverse for you. He was taking advantage of you and your business. But that sets some groundwork for how you are running your business today. That’s how it sounds like. TJ: Yeah, I did. I realized, this isn’t going to work. So I had let everybody go. I decided to finish the jobs myself. Then, I quit doing that.


That is when I, shortly after that, got into the roofing business. Ryan: And you got into the roofing business working for somebody else, correct? TJ: Yeah! Ryan: There were some issues there that came up. You talk a little bit about that. Share kind of the AHA! moment that you had to go and start your own business. TJ: Sure! I worked for another company as a salesman, selling exteriors, mostly roofs. And I loved it. I really did. I still do. I really enjoy the sales side of it. And I did pretty well at that and did it for a couple of years. And I had landed a big job. It was actually for a friend of mine. Roughly, a $400,000 project. And so, I was on top of the world thinking, “This is great! It is a great start to the year!” I was really excited about everything. So, that project was kind of a game changer for me because shortly after we landed the project, I was on the job quite a bit. And the owner I was trying to figure out about what our cost was going to be on the project because I was paid a percentage of the profit. The owner of the company I worked for yelled at me. He told me that I needed to stay away from that job. Kyle: That’s a red flag. TJ: Yeah! He said, “Stay away from it! You will get paid something.” And I thought, “What in the world?!” I am just trying to figure out a ballpark of how’s this going to play out. And also, I was wanting to make sure that things were going smooth there. It turned out they did not.


They were not going smooth which is probably why they wanted me to stay away. Our subs ended up not showing. This roof was completely ripped off the building and water was coming in. It was a real nightmare. They wanted to cancel. And I ended up being able to save the project with the guy, as I’ve mentioned, he’s a friend of mine. And then, they told me to stay away. And that I’d get paid something. So that’s what I did, I stayed away. It was at that point, a project like that, it took a couple of months to get done. In that time frame, I started looking for another job. And I figured, I was not going to get paid very much at all. The way that I had calculated what I felt like what would have been fair, I felt like I was kind of shorted $35,000 in commission. So I said, let us try to do something else. And I interviewed with a few other companies around town. Companies that I felt like would be good to work for. I was getting that gut feeling of some of the other stuff that goes on in the industry and I thought, well maybe I’ll just go out on my own. So I talked to my wife about it and I felt like it could be done. It wasn’t necessarily what I wanted to do at that time because I had the sort of experience before with my own company. And I though, “Man, it’s…” Kyle: De ja vu, all over again? TJ: Yeah! Exactly! I thought I’d rather sell stuff and not have to manage. Kyle: And go home at night and kind of just relax. TJ: Yeah! No doubt! But it’s not the same. So anyway, she said, “Are you sure it’s what you want to do?” I said, “Yeah, I think it is.” And so then, that’s the way how it started. Ryan: TJ, is there anything in the business right now or in the remodelling industry that’s exciting you?


TJ: Yeah! All kinds of stuff. There are a lot of great things happening in the industry I feel like. I thing some of the stuff that seems to be a trend is the way technology has entered the industry. All of the cool apps and things that you can use when you are looking at managing the business. There are lot of CRM software out there that can make our job easier from a management standpoint. There are a lot of apps out there where you can take a picture of someone’s home and then put different roofs on it. Let them pick which colors, different roofing styles and things like that. So for the industry as a whole, that kind of stuff is pretty exciting. And then, I think construction is supposed to be picking up this year – as far as new construction goes. Ryan: Not to put you on a spot here, is there any app or software that you are using? That you just find just amazing and you couldn’t live without it? TJ: For us, like I’ve mentioned, we do exteriors. We use a software called Acculynx. It is a great, great system for what we do. It is built by guys who have done what we do. It is pretty good for exterior contractors. Kyle: What is the name of the again? TJ: Acculinks. Then, there are a bunch of different apps as far as home remodelling type stuff. One is, there’s on Owens Crowning website. It is called DesignIQ. And then, GAF has one. It is called GAF Home Remodeler. And both of those are pretty neat to be able to show customers and help them see different shingle designs. There are tons of those out there for all siding companies. I think that stuff is kind of neat but as far as stuff we are excited about, as a company, we are looking into


expanding and opening another office this year. And we’ve hired a guy to do a commercial estimating. So we are getting into commercial this year. Ryan: You’ve also mentioned to me, which I found interesting, you actually have a law firm on retainer out of Chicago. You hired him not really for you but it is more for your clients. Can you talk a little bit about that and why you do that? TJ: Sure! We work with an attorney out of Chicago. They specialize on protecting the rights of the insured. Because we do a lot of insurance claims. They deal with everybody – from doctors to all the different industries that deal with insurance companies to get paid. They kind of have a long history of working with that, and roofing contractors seem to be growing in that field as far as people who are getting paid by the insurance companies to do work. And we partnered up with them, put them on retainers so that when we run across people who are just not treated fairly by their insurance company. Before we did that, we really didn’t know where to go with it. We would say, “Insurance companies are not doing you right. They stone walled on us. And we don’t really know what to do next. I guess if you want to fight them, just call us whenever you are ready to have your roof put on and we’ll put your roof on for you.” But we don’t know what to do. We’d work with public adjustors. Sometimes, they can get things done that a contractor cannot. Kyle: But not nearly as well as a nice letter from a law firm? TJ: Yeah! But not even a letter. They do some stuff that I didn’t really know about. It was just kind of neat to learn about the rights of everybody. What everybody’s rights are. Really, as a contractor, the insurance company has basically an agreement, which is the policy with the homeowner. And then, as a contractor, we come in and say, “Hey we need to fix the roof. It’s messed up.” They say, “I am saying that it is not messed up. You just have to go away.”


So it was real frustrating when you get into this kind of situations but one of the things we learned there is what they call “assignment and claim” where the homeowner can assign the claim to you as a contractor. And then the contractor now has all the rights that the homeowner has on the policy. So instead of just being this third party out there getting in the way, now the deal is that you have a lot of rights with the insurance company. Kyle: Interesting thought. We are always talking about how we differentiate, how we add more value. That’s a very interesting and compelling value add. Thank you for sharing that. Before we get into the lightning round, I wanted to ask one more question. Sounds like you guys have been and are growing at a pretty strong and steady rate, what are some of the things that you are doing to grow the business? Whether it is from the marketing side or the sales side, any specifics that come to mind when I asked that? TJ: We’ve grown quite a bit in the last 2 years. I would attribute a lot of it in our sales training. We work with a guy named Rodney Webb. And he is a really good, as a Sales Consultant. And his selling system has really changed our business. We focused on that. And we can use that to train new sales reps when they come in. It is a system that is repeatable, teachable and it really does a lot for our company, That’s what has driven the sales, I feel like. And it doesn’t hurt that we had hailstorm hit Hamilton County, where we live. Ryan: You don’t start by doing estimates? You do more of an inspection first? That’s kind of your hook to go into the door. And you have a nice presentation and sales process to go along with that correct? TJ: Correct! Yeah, we offer an inspection and move along with the presentation.


Kyle: So often, remodelers/contractors say, “My problem with my sales is I don’t have enough leads or the quality of leads.” What I find, kind of what you emphasize there is, that I want to highlight for everybody listening is that, improving your sales process, improving the questions you ask the way that you educate the home owner, the way you present how you are different, there is really no better bang for the buck than that. There is a remodeler I am chatting with right now that they think their problem is they need more leads. But they have plenty of leads. Their problem is they are not converting those leads into paying projects. What you were emphasizing there is what I want to emphasize for everybody listening. Investing is sales training and improving the sales process – those are huge. So now, we are going to get into the lightning round, TJ. This is where we rapid fire through a series of questions and you continue to share your smarts with us. Sounds good? TJ: Yes, sounds good! Kyle: So Ryan, start us off with the first question. Ryan: TJ, share with us the best business advice you have ever received. TJ: I would say, there is an old farmer who I used to work for. He created, he developed a snow-skiing resort and he’s got a 6th grade education and he always said, “Just keep it simple.” I think that’s a good advice. He is a multi-millionaire, by the way. Kyle: Can you share one of your personal habits that you believe attributes to your success? TJ: I would say maybe, what I touched on before where treating others the way you’d want to be treated. Kyle: So it’s not a magic food that you eat? There’s no magic thing you do every morning? Nothing behind the curtain? TJ: No. Nothing like that. I am just trying to be straight up with people, I guess.


Ryan: You sound like very consistent with what you do. You have a very specific plan in place. You are very focused on exteriors and just very, very consistent and methodical about how you approach your market and what you are doing. And you are not going to get distracted. That is what I’ve taken away from just a little bit of what I’ve known of you. TJ: Yeah! That’s a good point. I’d agree with that. Kyle: What book would you recommend for our Remodelers on the Rise listeners? TJ: I just read a book which I thought was really good. It is funny you should ask that. The name of that is Beyond Entrepreneurship. And it is written by James Collins and William Lazier. It is about turning your business into an enduring great company. And I thought that it was really good because it wasn’t necessarily teaching you how to start up a business but it’s how to once you get a business going, how to take it to the next level kind of thing. Ryan: Excellent! TJ: I thought it was a good book. Ryan: Do you have a resource of some kind that you can share with our listeners? And again, as a reminder to our audience, all these resources are available on www.remodelerontherise.com/show5 with the show notes as well. TJ: As far as resources go, I think it’s a general term. Ryan: Sure! It can be anything like a contract. Kyle: A template or a tool. Something you guys use in the business. Maybe, some of the questions that you might ask that are effective in the sales process or anything like that. TJ: I would say, Rodney Webb has a thing called the Rodney Webb’s University. It is an online sales training type thing. That’s a really good resource. A really good thing that I’d be able to share. Kyle: Perfect!

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So the final question. I don’t know if you have seen this question or have been listening to our podcasts but I am going to put you on the spot. So here we go. Imagine, TJ that you woke up tomorrow morning and you are in the exact same business but you knew no one, had no sales, and only $500 of start up money. And your life depended on you selling something in the next 7 days. You still have all the experience and knowledge you currently have. Your food and shelter are all taken cared of. But all you have is a laptop and $500. What would you do in the next 7 days to survive and generate new business? And remember, your life depends on it, Sir. TJ: That is funny. That is not far from what happened. I can answer that pretty easy because I pretty much lived it. So when, I first got into the company, I tell you what I’d do. I am used to work with a lot with storm damage. I found an area, a couple of neighborhoods that had storm damage and not a lot of guys were working. It was older damage. But had fresh storm come in. So I went in to it – start knocking on doors. I was just crossing my fingers that people didn’t ask me for a proof of insurance or anything like that. I was able to get on some roofs, check and do inspections. I had found some in the neighborhood with some damage and so I asked them to call their insurance company, met with their adjustors. Then, roofs got paid for. The first one I met with, the guy wrote a check on the spot. Printed it off in his car and gave it to the homeowner. That was pretty cool. So I asked for some down payment to get started. And I did that. I sold 4 jobs in the first 2 weeks. And I had taken down payments and used those down payments to buy a small general liability policy, a few hundred bucks to get me going. I wanted to make sure I had insurance before I actually started doing work on their house.


Ryan: Sure. TJ: I bought materials. I had a crew. Put the roof on and off I went. At the beginning, I was offering deals where if they paid in full, the same day, the last day that we’d be done with the project. And we offered them a free upgrade on the shingles or something like that. So, I don’t have to wait on the insurance company to cut the check. I could keep my cash flow going. Ryan: So you are telling me that you didn’t sit home, cry and complain about the economy or all of these other things that you couldn’t control? You went out there and made things happen? TJ: Right! I didn’t have much of an option really. Ryan: That is huge! TJ, as we wrap it up here. Is there anything else you want to share? Just let the people know where they can get hold of you, where they can find you. TJ: Sure! I could give you my email address and it’s [email protected]. And if anybody has any questions or anything feel free to send me an email. I am happy to share anything. Overall, I’m trying to make the industry better. That is kind of the goal. Ryan: Excellent! Kyle: Well, thank you for coming to the show today. We really appreciate you sharing your story. And just a friendly reminder to all our listeners, if you could check out www.remodelersontherise.com and take a couple of minutes to review and rate our show on iTunes. The more reviews and ratings we get on iTunes, the better chance other people like yourself can find the show. We appreciate you all tuning in and thank you to my co-host Ryan! And thank you TJ for joining us. We appreciate your time. Ryan: Thank you both. TJ: Thanks guys, see you!

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Show 5 with TJ Elbert