Dave Beeler is the President of Beeler Construction, a third generation, family-owned commercial general contractor which runs projects across all industries from medical to retail to manufacturing. We discuss characteristics of successful family-owned businesses, how to grow your business using management blueprints, and ways to attract top talent and top clients.
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Attract Top Clients And Top Talent With Dave Beeler
My guest for this episode is Dave Beeler, the President of Beeler Construction, a third-generation commercial general contractor, experienced in constructing healthcare, retail, hospitality, commercial industrial, manufacturing, and senior living spaces. The company does construction but considers itself to be in the relationship business. Welcome to the show, Dave.
Thank you for having me, Steve. It’s a pleasure.
I don’t often have family business entrepreneurs on the show. I’m very curious about how that is working out. It’s doing very well because you’re third-generation already. There is a single-digit percentage of companies that make it to the third generation. You are already doing great. What does it take to take over the family business and be in the footsteps of two successful prior leaders? The pressure can be immense.
It has been a journey. As you can imagine from 1959 to 2022, a lot of things change from the first generation to the second generation, and now to the third generation. There is a lot of discipline and open-mindedness. The biggest thing is having a clear vision that is understood by all. With the rapid growth we’ve had in the last few years, a $30 million company can turn into a $100-plus million company very quickly, as you can imagine, a lot of things changed.
Having all the owners aligned on where we’re going has been very good. It’s realizing the big picture of things. As long as you can strengthen that relationship with the family members, that’s number one. It’s having that understanding as we broke through the ceiling. The first generation gets it up off the ground and built a lot of good relationships throughout the industry in our area. The second generation expands off of that.
As we’re breaking through that ceiling, there are a lot of changes. You go from that small family tight-knit company to that larger scale. The big thing is to maintain what has started and focus on the core values that got us here. We’ve all heard the saying, “What got you here won’t get you there.” We’re trying to focus on keeping those core value-type items of what got us here. However, we’re redirecting and reorganizing some of these things to get us to the next steps.
In a family, there are multiple children and maybe multiple of them are in the business, which was the case for you as well. How does it turn out who will be the next leader? How does the family manage this transition so that everyone comes out happy?
What’s making this work well is we don’t encourage our children or from other generations like, “This is the path you will be taking. This is what’s going to happen. I strongly suggest you be part of the business.” That individual needs to have the drive and want to have an opportunity at the business. Most of the kids had the opportunity for summers, maybe some shop help, or whatever the case may be, but that individual has to have that want. We encourage having them work at other companies and not start their career here to give them more of an idea of whatever else is out there in the industry.
We are fairly small, at this point, so it hasn’t been too hard to decide. As our families grow and as you start to get into a bigger company, there are a lot more layers that come with that. As we grow, fine-tune, buy and sell agreements, and come up with opportunities, it will get a little bit more complex. I’m very optimistic there won’t be any problems as long as those expectations are clear upfront. As I said, we don’t push our kids into it. It’s more of the want. There have been some that have worked here for a summer and decided to take another path, which is fine. It has worked out well thus far.
If it doesn’t create family conflicts, that’s great. Let’s talk about the framework that you’ve been using to grow Beeler Construction. What is it that you use and what has been your experience?
In 2019, we started the reorganization of the company. There are many different coaching opportunities and many different ways of doing this. We chose to utilize the EOS System or the Entrepreneurial Operating System. We had a lot of good key clients and just had a lot of eggs in a few baskets. One of our key clients ended up filing for bankruptcy. It was an eye-opener to us of how we diversify more and weather these storms for an economic downturn, mergers, acquisitions, and whatnot. We put our heads together and realized quickly that what got us here isn’t going to get us there. We decided to reach out to an implementer through EOS.
It was interesting because the first generation and second generation did a phenomenal job. As you bust through those ceilings, we needed that next step. We went through and redefined the core values and our flywheel. We had the right people on the ship. It was just a lot of people rolling in different directions. EOS helped us out with that and get that kicked off. We used them for a couple of months, and then we got introduced to a group, Pinnacle. EOS was good, but what we liked about Pinnacle is that it was a little bit more specific to our needs versus following a step 1, 2, 3, 4, 5, etc.
We switched to Pinnacle. We’re coming up on two years our journey with Pinnacle. It has been great. As owners, we are aligned. Sometimes you get in those conversations where there’s no right or wrong answer. We have a lot of good input and you need that third party to help make those decisions, which has been great. We’ve developed a leadership team as well a couple of years ago, which has helped. It’s not just us three owners running the company. We’ve got a leadership team that’s very heavily involved with a lot of the business decisions we make.Sometimes you get into those conversations where there's no right or wrong answer. Get some good input from a third party to help make those decisions. Click To Tweet
What has been the most beneficial or impactful Pinnacle tool that you’ve implemented in the business? Can you talk about that?
There’s the oven loaf tool and also delegate and elevate. There are a bunch of different tools that serve the same purpose, but that was very beneficial to us as far as getting the right people in the right seats. One of many tools is the rock planner for those of you who set quarterly rocks. It’s the same thing as quarterly goals, but there have been a lot of tools to help plan our 1-year, 3-year, and 10-year. We’ve had a plan in place, but utilizing several of these tools that Pinnacle offers helps break that down.
We’re starting with that big hairy audacious ten-year goal and breaking that down like what needs to be done in the next three years, the next year, and the next four quarters. We break that down all the way into weekly tasks. There are a number of different Pinnacle tools that have helped. We’ve tried to develop a few on our own and they work, but sometimes you’ve got to lean on the experts and stuff that has been proven and worked before. It has been a great help.
Sometimes when you’re inside, it’s hard to be objective about your company. It’s hard to be seen as objective. Even if you are objective or you get close to it, how can you make sure that people will see it that way? When you have a facilitator, you can basically be part of the team and let them do the heavy lifting of facilitating the conversations, calling people out, and making sure that all views are heard. That’s pretty cool.
I’m sure your audience has heard of a couple of other different software programs, trying to consolidate a lot of those different documents or how you record certain things like the rocks, the to-dos, different functions of the company, different teams, and whatnot. That has been a tremendous help for us as well to consolidate everything as long as you’re very disciplined on utilizing it the way it’s supposed to be used. For running meetings and to ensure you’re keeping on track with certain things, I would highly suggest looking into some of those software programs as well.
I always like to tell my clients that the big difference with Pinnacle compared to other systems like EOS, first of all, it’s up to date to the 2020s. It’s got everything from the last twenty. It’s not from the early 2000s. Secondly, it’s fully customizable for every client. The Pinnacle guides want to understand the business and what the client is facing and work on those things that are going to be the biggest levers for them. The third one is scalable.
Try to find a guide who is interested in your business and get invested in it. How I look at it is the job of the guide is to grow with that business. I always want to be able to understand what’s coming up for them and then help them figure out how they’re going to get to the next level. Maybe it takes eighteen months to get to the middle of the mountain, but the mountain is much higher. How are they going to get to the next level? What’s going to be their strategy? What concepts can they implement? That’s Pinnacle. Let’s talk a little bit about Beeler Construction. What does the close immediate future look like for you? What does your backlog look like? People are afraid of the impending recession. How do you get ready for that and what do you expect will happen if this downturn arrives?
With the potential economic downturn, we’ve focused a lot of our energy on diversification, not only within the marketplace but also with clients within the marketplace. Our ultimate goal is to have no more than 33% of our revenue and no less than 15% in each market. Within those each market, our ideal state is to have five key clients. With mergers and acquisitions, one market might be hot while the other one drops. We feel like we’ve done the right things. We have the right measures in place for everything that’s in our control for the economic downturn if it comes. I feel strongly about that.
One thing with construction right now, and this is one within a few other industries, but construction specifically, we’ve got a backlog that’s into 2024. We could see a little decline. If we have 16 to 18 months of backlog and this is a short economic downturn of 8 months, 12 months, 16 months, or we don’t know, there’s enough backlog that by the time the work starts to pick back up, we’re still catching up from all the work that we have planned.
We feel like we’re in a good spot right now for the stuff that we can control. As far as our initiatives for 2023, we’re ending a great year with record margins and record revenue. It has been good. With a lot of our 2019, 2020, and 2021 initiatives and planted a lot of seeds with new clients, a lot of them sprout very quickly. It felt like a lot of us are drinking from a fire hose, which is great. However, we’re going to focus on our foundational growth for 2023.
Many of you have heard of the J-curve. If you can picture a Nike swoosh, it comes down. That down is building that foundation and building on your teams to be able to handle whatever revenue is thrown your way, and then it comes back up to where your goal would be. What happened to us in 2020 was more of the addictive curve. Instead of coming down and strengthening that foundational portion of the company, we had a lot of work that came in. We took that on and everything worked out great. We satisfied our clients. It was hard and was a lot for the employees. We recognized that and did that reverse swoosh. We’re going to concentrate our growth strategies on foundational growth.
We will increase our revenue a little bit from 2023. However, we’re coming off of 20% growth, 18% growth, and 2022’s 30% growth. We are going to reduce that a little bit and focus on our foundational growth for 2023. As I said, we broke through our first ceiling and we’re at the top ready to break through our second ceiling. Our company’s structure and dynamic change. You need a little bit more departments and team structure, and a lot more process-driven. We’re going to continue our diversification within markets, but the main focus is going to be foundational growth.
That’s important. As you were explaining this, I recalled that I had a client years ago. It was an HVAC contracting company. They had this pattern of growth that for two years they would grow by 30% a year, and they exhaust their current structure. They spent the next year essentially flat. They’re rebuilding, restructuring the organization, and catching up with processes exactly as you said. They would have a flat year and then have two years of rapid growth. We called it the grasshopper because you’re having big jumps and then leveling out. That’s an interesting thing.
You started talking about this rapid growth and it’s great. Construction is seasonal. There’s a lot of stuff out of your control where you have to take advantage of those great years. However, if you build your processes outright, diversify enough, and do everything right, you should be able to eliminate some of those peaks and valleys.If you build your processes outright, diversify enough, and do everything right, you should be able to eliminate some of those peaks and valleys. Click To Tweet
However, you look at the last couple of years with 30%. When you start compounding that, all of a sudden, that’s back to that original conversation of the vision that’s understood by all. It’s nothing to go from a $30 million to $150 million to $200 million company in a short span with that much growth. Our big thing is slow and steady growth with a diverse portfolio where we still have that strong connection with the clients. We’re not an enormous company out there. It’s important. It’s amazing how fast that can get away from you. You can’t have a 30% growth and all of a sudden, have a decline either. It has been very interesting. It has been a lot of fun the last couple of months, trying to get the strategic plan in place for 2023 and years beyond.
You defined yourself as a relationship-driven company. You don’t want to disappoint your existing customers. You want to keep them and add more customers on top. This is how about it as well. Job number one is to keep existing customers happy and rolling. If you keep the backdoor closed, then job number two is to get new customers.
I’ve worked with a lot of professional service-type businesses, which are similar to yours in the sense that it is very people-dependent. Your growth is going to be limited by the number of people that you can absorb and inculcate in your culture and teach them your processes. How do you keep that employee recruitment growth going? I hear a lot of companies say, “Hiring is the new sales.” It’s harder to hire good people than to find good customers. What has been your experience and how do you deal with it?
We’ve been very fortunate. We have a good group of people here. We have lent out to some recruitment services. In fact, we have one retained right now. They have been bringing some okay leads to us. The main thing is as a company, we are our biggest recruitment tool. Out of the last 15 hires, 14 of them were all word of mouth. That goes down from our apprentices, journeymen, superintendents, and all of our office staff. We’ve worked hard to create that great culture here. Employees are your number one asset as we all know. They’re friends, family, and different acquaintances. There are a lot of good vibes that are going out with the culture here in our line of work. That’s one big thing in our flywheel.
You’ve got to have top clients and top talent. You can’t have one or the other. With the great clients that we’re fortunate enough to have, there are a lot of great work environments, friendships, relationships, and partnerships that are formed with our employees and clients. Again, a lot of it is culture. We all know that, but the word of mouth and internal recruitment has been good. We try to focus on finding the right person and having that open conversation. We’re not one to steal people from other companies within the area. In conversation, it might be planting seeds if things aren’t working out where you’re at now. You’ve got my number. It could be a year or five years. It has been working out well.
To be truthful, we were short of manpower in the field. With us, being a general contractor, it’s nice that we’re able to subcontract some work out if we’re a little tight on manpower. All in all, it has been pretty good. We do have open positions, but we don’t lower the bar to fill those positions. We’re okay with bridging that gap a little bit until we find the right person.
Another thing too is we’ve created a career development program where once you stop learning, a lot of these individuals lose drive, steam, and focus. We work very hard on whether that person is in the office starting out as say an assistant project manager or a project coordinator. We have a couple of documents that show a clear specific job description for each one. It could be on a monthly basis or quarterly basis, and work on some of the items to get perfected and move on to that next level if that employee is willing and wanted to. That helps to keep these employees engaged and always learning. That could go from apprentice to journeyman, all the way up.
We have some employees that want to stick into a position so people can’t fall asleep at the wheel and say, “They’ve checked the boxes. They’re good, out of sight and out of mind for a long period of time. Even for those individuals that would like to get hired on at a specific level and stay there, there are still a lot of areas to grow and keep learning in within that position. We take that very seriously. That’s echoing the conversation of breaking through that ceiling.
Before, a lot of our focus was finding the work, operations, and doing the work. Now, it’s a whole team of people that has to have a mind shift change of the general HR-related type things. Ensuring that people are staying focused once you have a team approached, and ensuring that everybody is working very well together. If I had to sum it up into a couple of words, it’s career development and ensuring that these employees never stop learning.
I agree with you. It’s very motivating when people are constantly able to learn new things which keeps them sharp and excited. The other thing that you mentioned which is important is to look after your people. If you do that, then they’re going to look after your customers. The whole machine is going to work. They are going to also refer other people. That’s word of mouth.
It all starts with looking after your people and making sure that they have a great experience. If they’re learning and growing, then the whole company can grow. These are useful ideas. If someone would like to learn more about Beeler Construction, maybe they have a business that would require construction work in manufacturing, hospitality, senior living, or whatever, and would like to connect with you and learn more about what you do, where can they go?
We have an Instagram and Facebook page. Our website is www.BeelerConstruction.com. I welcome anybody to reach out through my personal email, DBeeler@BeelerConstruction.com. If anybody needs any help with anything, even peer groups, everybody’s looking for the right peer groups in their industry, I welcome anybody to reach out.
Peer groups are super important. It’s good to have a business group or some other peer group. Talk to Dave Beeler, President of Beeler Construction. Thank you for coming to the show and have a great holiday. Everyone, I look forward to seeing you soon on the next episode.
That sounds great, Steve. Thanks, again. Have a wonderful day, everybody.