May 17, 2023 • 26 mins
Ben Barrick has come a long way from working out of his 2007 Toyota Prius. As Strategic Partnership Manager of Hearth, he now focuses on allowing construction pros to offer financing to homeowners, thereby helping contractors sell more, have happier homeowners, and provide a better experience.
Connect with Ben Barrick on LinkedIn here, and find out more about Hearth here.
The Construction Pals podcast is brought to you by BlueTape, your source for the latest in the construction world. Don't forget to subscribe for more episodes like this.
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Episode Transcript
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Announcer (00:00):
Welcome to the construction pals podcast.
Brought to you by blue tape.
Your source for the latest inthe construction world hard hats
off, headphones on. And let'sget started.
Rick Butler (00:13):
And I'm your host, Rick Butler, from blue tape. In
today's episode, we're speakingwith Ben Barrick strategic
partnership manager at Hearthabout the challenges contractors
and renovators face whenoffering financing to their
customers. Hey, Ben, welcome tothe pod man. It's exciting for
(00:34):
you to be here. And it's almostlike old home week for free you
and I How you doing, man?
Ben Barrick (00:39):
I'm good, man. How are you? I'm excited to be here.
I really appreciate you guyshaving me on here. And it's
always good to catch up with youtoo. So
Rick Butler (00:45):
absolutely.
Absolutely. Yeah, we see eachother trade shows and stuff like
that. And it's always fun. A yougot such an interesting
background. You're an Indianaboy.
Ben Barrick (00:57):
Yeah. You know, grew up in small rural Indiana.
I absolutely loved to Nana, youknow, my wife and I both spent a
long time there. Were actuallyyou know, we grew up together in
high school, went to promtogether, reconnected down the
road, eventually got married,had kids moved down here to
Puerto Rico, where we've beenhere for the last two years,
(01:17):
kind of a benefit of workingremotely. So I can get some ways
when I need to. And it's alittle different life than
Indiana.
Rick Butler (01:24):
Should you do have a you have a background in the
construction field also, right?
Ben Barrick (01:29):
Yeah, yeah. So right after. So right before I
graduate college, I took a jobat a commercial maintenance
company in the southeast UnitedStates. I graduate from Troy
University, I was there forabout a year and a half before
the company was sold. I was insales and a little bit
operations there to getkickstart, then I started my own
business, right. Maybe not aperfect timing couple of weeks
(01:52):
after Bear Stearns ran us introuble. So right at the
beginning of a great recession,I started my own business ran
that and over five or six years,my brothers still operate, you
know, the business has kind ofgone through a couple different
iterations. I kind of pivotedfrom there and got into, you
know, sales and management. Andit kind of became my sales
career, which eventually landedme you know, here where I am
(02:16):
today at hearth, where I get towork with 1000s of contractors,
and construction pros everysingle day, helping them grow
their business and really lovingwhat I'm doing. And really the
the journey to get here has beenreally great for me as well.
Rick Butler (02:29):
What sort of helped you to more towards seeing
financing for contractors,builders in the construction
industry, something that yousort of gravitated to what pulls
you toward this financing niche,if you will.
Ben Barrick (02:46):
Yeah, I think it really goes back to when I was
in sales. I remember sitting ina sales room. You know, we had a
group of like, 30 people 30sales guys out there. And each
month, we come and have ameeting. And I told the story a
couple of times. So it's almostheard this before, I'm sorry,
but I'll call him Alex, Alexwas, you know, young kid, kind
(03:09):
of the bottom tier sales guy.
And we had financing in place,like we were selling very
expensive things 60 to $100,000jobs, you know, every every
single week of that we wereselling, but Alex was always
like a lower performer. There'sguys in that room that have been
selling, you know, for 25 yearsreally, really seasoned really
great salespeople. We had thisgreat training once about
offering financing. And the verynext month, reports come out the
(03:33):
scoreboard goes up in that salesroom. And Alex is like number
two. He's traditionally likenumber 27 He's number two, and I
sold like the second or secondor third like biggest month in
company history. Overnightbasically like within 30 days
(03:53):
have done it. And people askthem like man that Alex you
know, the hell did you do? Thismonth it closes many deals. And
it really subtle, simple answerslike just start asking people
they need financing. So themonthly payments is representing
monthly payments to I think itwas like right, then I realized
(04:13):
how impactful it is not just forbusinesses, how convenient is
for homeowners, but what it canactually do to like a sales
professionals life, how they canactually change their life for
the better by helping close morejobs held close bigger deals,
having happier customers andjust making the sales process so
(04:35):
much easier and less stressful.
And Alex went on to I think hepaid for his graduate school in
cash paid versus tuition in cashat Purdue University. I know
he's got a couple of kids now toreally set up like for the rest
of his life. He said that helearned how to sell better. And
(04:58):
financing was such a huge planthat
Rick Butler (05:00):
Well, so when, when financing sort of that light
bulb and looking at Alex andlistening and seeing his story,
you've seen it firsthand. Andusing financing as that light
bulb moment goes off in terms ofa builder or renovator? What
issues are they facingfinancially now here speeding up
(05:21):
to 2023? That, that they'reshowing and telling you about
problems they're having?
Ben Barrick (05:27):
Yeah, I think, you know, I, we hear a lot of and
stuff, I think it comes down tothe individual contractor or the
in the business. But somethingthat really stands out to me is
really the access is what I'mhearing a lot about right now.
Things have really, you know,things have become really
expensive, right? Supplies,labor, the cost the job, all
those things have increased inprice tremendously over the past
(05:50):
decade, especially the last twoor three years. We went through,
like this hyper growth stage fora lot of companies, which had a
lot of great things come fromit, but also create a lot of
cash flow issues. forcingcompanies to really think, you
know, how are we going to payfor these things, how we're
going to buy materials, howwe're gonna buy supplies,
infrastructure, personnel, andpayroll, how's the customer
(06:13):
going to pay for these things?
So some of the best companiesout there are, you know, they,
they hire the best talent. Andthey use the best materials,
they have the the best productout there on the market, right.
But now, they have a lot ofcompetition, because a lot of
competition enter themarketplace last couple of
years. So if you're in thatposition, you know, what do you
do to help a customer justifypaying more, while you trying to
(06:38):
keep operating costs low aswell. So having access to
capital, having access to peoplethat can help you access to the
best talent, giving homeownersaccess to you and your business
and make it easy to buy fromyou, that's increasingly
expensive and challenging. Someof the best out there have
(07:00):
decided, Hey, I know we've donea lot of things the same way for
past two decades. But there'sgot to be a better way to do it.
Then you get some like the newguys, on the flip side, you get
some of the new guys out theresaying, Hey, we've either got to
catch up to the big boys, orwe're not going to exist next
year. So they need access to thesame benefits and the same tools
(07:21):
that traditionally reserved forlike well established tenure
companies. But they normally arecost prohibitive, which puts
them at a constant disadvantage.
So I think, you know, when Ithink about like access, I think
about from like, almost twodifferent standpoints, it's
these well establishedbusinesses, they're trying to
access, you know, new capitaland can kind of keep their
(07:45):
business thriving. And then theaccess being limited or becoming
available for the smaller newbusinesses to catch up and
actually compete.
Rick Butler (07:55):
So let's, let's sort of land there on that small
guy. You know, that's trying tocatch up with the big boys. And
so when when you're hearingfeedback from those guys, and
you know, they're trying to dothe catch up, they're trying to
expand what you hear, like,we're gonna do self financing.
(08:17):
And for that guy that's comingfrom that approach. What's an
obstacle obstacles, probablymore like it that they're
running into when you hear thattype of feedback, hey, I'm gonna
do this on my own.
Ben Barrick (08:31):
Yeah, I think that I mean, we, let's think about
financing from kind of both ourstandpoint from like the blue
tape and like the heartstandpoint, consumer and like,
you know, material financing, tobuy a lot of material to sell a
lot jobs, you have to put a lotof money. That's very hard for a
(08:51):
new company. I've been in thatposition before I remember I
started my business our back inlike Prius the, the go to
vehicle for all construction,seven Toyota Prius and a rear
view camera that was nice.
That's pretty early on adopterof that. But you can't go out
there selling job after job andexpect, hey, we're gonna get
(09:19):
paid in 30 or 60 days and it'llfloat that money. You can't do
that it's too burdensome foryou. So you have to like slow it
down to schedule things outreally far. You have to take
increasingly larger deposits forpeople putting their money at
risk too, because you might needto use up other things. When you
think about like how theconsumer is going to pay for
then. You know, traditionallythere's a lot of go back to
(09:41):
access. Traditionally, smallguys don't have access to
offering financing to thecustomers. There's basically
saying hey, go figure out how toget the money yourself. Here's
my price. And the big boysadvantage has always been we can
do this in your home without youleaving. I can see Secure the
contract right now, not to worryabout coming back here next
(10:02):
month, secure the money. Andthat playing field is getting
leveled. It's getting leveledevery single day. There's so
much new technology out there somany new products out there that
are helping those small guyswin. And really, really the guys
that are very serious about itare taking advantage of it. And
they're starting to see, likethe fruit from that really bear
(10:24):
out right now.
Rick Butler (10:29):
So it's a time factor as much as it is a
cashflow factor. So if I, if Isee someone and I'm trying to
close the deal, I guess timekills all deals is been a
problem. And this is sort of Ilove that level in the flat
playing field just to repeatwhat you said.
Ben Barrick (10:48):
Yeah, yeah, I mean, I think it's definitely timing.
And that's timing for yourcustomer. That's timing for your
business. If I have to go buymaterial, you know, how do I get
deposits for that? If I'm selffinancing it. I can't name
anything more risky than puttingeverything on the line and self
financed, people still do it,people still will allow payments
(11:11):
over the next two or three yearsout of their own pocket. That
seems way too risky for me likeyou don't you don't have to take
that on anymore. This is notMayberry. As much as I would
like the world to be Mayberry,it's not very anymore. And we
know you can't take on thoserisks like that anymore.
Rick Butler (11:29):
No. Cash flow is you know, in all we are I just
say to everybody around here atBlue tape, we're problem
solvers. And that's something Ilearned from you. I was
listening to you and it seemedlike you're always solving a
problem and I hear cash flowthat phrase being kicked around
(11:52):
sort of define that from notfrom Webster's from but from
spinsters dictionary from yourdictionary, shorter defined for,
for the folks here cashflow? whythat's a problem. How you're
looking to solve that.
Ben Barrick (12:08):
Yeah. You know, the, again, not Webster's, but
Ben's simple Indiana terms is,do I have money tomorrow for the
things that I need to do today?
So is it is it that I am doingsomething right now, that's
(12:29):
gonna strangle me or mybusiness. In the next couple of
days, next couple weeks, nextcouple months, they got I think
a lot of us, myself included,fell into the trap of I'll
figure this out in a few months.
Like, it'll come together, it'llwork out. And sometimes it does,
and sometimes it doesn't. And soa lot of what we're trying to
(12:53):
do, you know, a lot of what Iget to do each day is helping
people really solve that problemof, hey, you need to be getting
paid for your job and you getpaid respectable prices for your
jobs, you get a lot of workgoing into this, you need to be
able to collect payment on yourterms, you need to be able to
not take the risk of financing ajob. But you know, that's not
(13:17):
your burden as a business owner.
That is a added benefit you canoffer to your customers to make
it easier for them. That doesn'tmean you have to take the risk
on in that kind of scenario.
Rick Butler (13:31):
So just to clearly differentiate what we do and
what you do, I'm working with asupplier for materials to
finance those materials. Forthat contractor, as an example,
you're working with a contractorto finance that project for a
homeowner or residential, wouldthat be a good differentiator
(13:52):
from what we do? Yeah, we'rehelping cash flow. To to okay to
two different segments. Whenwhen my supplier or your
contractor when the light bulbgoes on this relieves cash flow.
It helps, you know, get the dealclosed. What do you think that
light bulb moment is for that?
For that small guy trying tocatch up close more deals? Where
(14:16):
do you think in terms ofleveraging financing and
offering it where does thatlight bulb go on for him or her?
Ben Barrick (14:24):
Yeah, I think what I think there's so many
misconceptions about financing.
All financing does is create acash paid customer for you.
Whether you're a suppliergetting having a contractor buy
material from you, you'regetting paid cash, like you're
just that's all it does for you.
(14:46):
As a contractor offeringfinancing to a homeowner. All
you're doing is turning theminto a cash paying customer. The
idea that financing and incredit those complicated
subjects and I did not have anMBA. I've never worked on Wall
Street. I've been there a coupletimes to visit, never held a job
(15:08):
there before. There's a lot offinancial people really smart
savvy, what CNBC, you canunderstand half the things we're
talking about. I think that'sprobably where a lot of people
get their financial wisdom fromit saying, Man, financing sounds
complicated. Until it isn't,until you do it. And it's not
really that complicated. Thelightbulb moment usually is
(15:33):
three things I'll say threethings. Number one, when you
realize that it's not doesn'thave to be complicated, it's not
complicated. at all it reallydoes is create cash pay
customers for you. Number one,your customers will borrow money
from a 401k against their housefrom Uncle Tom down the street
from your savings account, orfrom the bank, you just help
(15:55):
them finance from. Number twowas when you realize when you
create that buying experience, Italked about experience and
convenience a lot here. So tellme if I'm boring you with those.
But no, no, we create a buyingexperience for a homeowner. You
tend to sell more often, a goodbuying experience, you tend to
(16:18):
sell more often. And for highertickets. So who doesn't want to
sell? When you offer financing,you're more likely to close the
deal. Who doesn't want to be inthat situation? You save time
you save money, you sell more?
Sell faster?
Rick Butler (16:38):
Turn It In the coin. You know, you're talking
to folks in the constructionindustry every day, you're
hearing back from the peoplethat work with you every day
feedback, what's the thing rightnow? You know, coming from the
bottom up from the small guy up,that's just pulling your hair
out?
Ben Barrick (16:57):
Yeah, there's a lot of things, I give you quite a
few things. But I don't think alot of them are new, I think
from like the financial side.
There, let someone just overallfinancial. A lot of people just
don't know their numbers. Theydon't know the actual costs, the
actual job cost, they understandwhat the material cost, and the
(17:19):
idea of the labor that might beinvolved with it, but not
pricing in fixed costs into thejob. The cost of administration,
the cost of fuel, you know,adding all your payroll costs
and, and really understandingOkay, here is my profit, I need
to hit each each job. Andwhether they're hitting it or
not. They don't even know. Theythink they're making money, but
(17:41):
maybe they're not making money.
So that's like the overallfinancial thing I've you know, I
always recommend, hey, if you'rerunning a business, I know you
love your trade, but you're butyou've got to be business first
to does it only or be able tocontinue doing it. You know,
invest in yourself to learnthat, whether you're hiring
someone to do it for you, orwhether you know, you're going
(18:03):
to take time to learn from somekid on YouTube that can probably
teach you it or you know, takeclasses but really understand.
Understand your numbers todayunderstand where your numbers
gonna be in six months and ayear kind of able to project
those out. You have a lot morelongevity as a business a lot
more stability, too. We alwaystalk about growth, I think
(18:24):
companies always think aboutgrowth, and they neglect in our
industry. We talk about growth,you know, we want to hire X many
more guys, we want to grow intothese new communities, yeah, so
on and so forth. Withoutconsidering the stability. And
we don't have stability in thisindustry. Going back to cash
flow, you can be out of even beout of money, you'll be able to
(18:45):
earn $1,000 pretty quickly. Andif you're not stable, you don't
have you know, the FinancialStability underneath your
company. That's hard to climbout of, you know, if something
goes wrong and things go wrong,our industry right wreck, things
go wrong every single day onevery job sites. And so you
(19:06):
better know what those numbersare coming from in terms of like
the financing side. Not going toname names. Am I going to speak
disparagingly of anyone outthere, because I think everyone
has a place in the market. But Ithink the cost of offering
financing has become soburdensome not just for
(19:30):
companies but also forhomeowners. I think a lot of the
fees are involved with financingare putting companies at a
disadvantage. People arestarting to reject the idea of
offering financing, which isgoing to hurt the bottom line in
the long run. I think you knowwithout giving like pointed
advice about what to do. I wouldencourage people to just
(19:54):
understand what they're offeringbetter. Understand, like we know
interest rates are kind ofcrazy, right? No bathroom round,
right? Get an understanding ofwhat that means for you know
your sales process, evaluatewhere you are, understand how
much money you're spending onthat how much money you're
making from that, and make thebest decisions based upon those
numbers. Not just because I'vebeen doing it this way for five
(20:17):
years, I will keep doing it.
Rick Butler (20:19):
Let's go back to you know, let's go back to Ben
in that Prius. Back in the day,you said 2003, what's the what's
the best thing you could tellthat guy and, and relate it to
what we've been talking about.
Ben Barrick (20:33):
The two things I would tell myself is number one
that quit talking so much. Justcustomers know what they want.
Customers are buying for theirreasons. You don't have to tell
them everything. You don't haveto have a plan, they already
(20:54):
have a plan. You just got toshut up and listen, sometimes
listen to what your customersare saying to you. Listen to how
they're saying things to you,who's telling you those things.
And listening to their buyinghabits. I think as business
(21:14):
owners, and salespeople we thinkwe know, it's this weird
disconnect, I don't know why ithappens. We have an idea about
how people should buy from us.
But we're also consumers. Andfor some reason, we have a hard
time connecting our consumerbrain to our business brain and
realize our customers should buyfrom us this way. But our
(21:38):
consumer brain says, but we likebuying this way. And those never
get connected for some reason orindustry. Not sure why. But if
we listen to how our buyersactually consume things, how
they actually want to buythings. I think we're all at a
huge advantage. We see a lot ofcompanies out there like you can
(21:59):
buy, you can buy roofs onlineright now, without a sales guy
ever going to your house. It'sincredible. What people are
doing it, and a lot ofhomeowners are doing it. That's
the That's the new buying habitsof consumers. My number number
two to pile on there. And thisis more for the small guy, the
(22:24):
small guy who I love. I love thesmall guy, the guy who has to
overcome everything. We talkedso much about growth and
expansion. And we had this hypergrowth stage, you know, those
last couple of years. And Ithink the focus traditionally in
construction and contracting isso much about being the big guy.
(22:50):
And by being the big guy, youhave to be everywhere, right?
You have to cover all thegeography. When I thought when I
was in Central Indiana, I'mgoing to grow my business, which
means I'm going to expand to sixnew counties. Well, turns out,
it's a lot easier to sell 50More jobs this year, in my own
(23:14):
neighborhoods in my owncommunity, versus traveling two
hours away each day to sellthose jobs. They get people
really are determined to owntheir market, own their
communities. You make so muchmore money, you spend so much
less time you want to be the goto guy when someone has someone
at church says hey, I need a newroof. You want the Minister to
(23:39):
say Hey, Ben is the Best RooferIn town you should call him.
Like that's what you shouldstrive for. That's how you grow
your business organically. It'sa lot cheaper to do it, it's a
lot easier to do it it's a lotmore cost effective to do it.
But I think sometimes we getstuck in a mindset where in
order for me to grow my businessI just have I just need more
(24:03):
customers. But a lot of thosecustomers are in your backyard
already.
Rick Butler (24:13):
Oh, good stuff, man. Those are such good
nuggets. I hope the folks aretaking notes and we're gonna you
know, just review this. There'sbeen so many good nuggets. I
want to I want to go sort ofstore to start landing the plane
here from this aspect. What I'mdoing is I'm helping that guy on
(24:36):
terms 3060 90 days that bluetape to use trade credit for
supplies and materials, whetherthat's a supplier offering it or
a contractor utilizing andleveraging trade credit helped
me and a three story elevatorpitch not the Empire State
Building elevator pitch but thethree story elevator pitch which
(24:59):
you're doing As you guys aredoing it hearth,
Ben Barrick (25:02):
we are trying to make the selling process easier
for contractors. And the hearthapp is going to allow you to
become the most convenientperson to buy from, thus
allowing you to sell more, sellmore often had happier
customers, give them a betterexperience.
Rick Butler (25:23):
How can how can folks get in touch with you and
you possibly help them or pointthem in the right direction?
Ben Barrick (25:30):
Yeah, reach out, reach out to me on LinkedIn,
reach out to us at heart. If youwant to learn more about that as
well.
Rick Butler (25:36):
You don't know how much I appreciate your time
brother and what I've alwayslearned from you, and I know the
folks are gonna, you know, getsomething so appreciate you,
brother.
Ben Barrick (25:46):
Yeah, man, I appreciate you having me here. I
really look forward to hearingthis all across the platforms
here. And I've already liked andsubscribed to you guys. So I
love the podcast. We lookforward to what you guys have in
store ahead of us. Thanks, man.
Rick Butler (26:00):
You got it, brother. Adios.
Announcer (26:02):
Thanks for listening.
And don't forget to subscribefor more episodes like this. For
more information on constructionpals podcast and blue tape,
please visit blue tape.com
Welcome to the construction pals podcast.
Brought to you by blue tape.
Your source for the latest inthe construction world hard hats
off, headphones on. And let'sget started.
Rick Butler (00:13):
And I'm your host, Rick Butler, from blue tape. In
today's episode, we're speakingwith Ben Barrick strategic
partnership manager at Hearthabout the challenges contractors
and renovators face whenoffering financing to their
customers. Hey, Ben, welcome tothe pod man. It's exciting for
(00:34):
you to be here. And it's almostlike old home week for free you
and I How you doing, man?
Ben Barrick (00:39):
I'm good, man. How are you? I'm excited to be here.
I really appreciate you guyshaving me on here. And it's
always good to catch up with youtoo. So
Rick Butler (00:45):
absolutely.
Absolutely. Yeah, we see eachother trade shows and stuff like
that. And it's always fun. A yougot such an interesting
background. You're an Indianaboy.
Ben Barrick (00:57):
Yeah. You know, grew up in small rural Indiana.
I absolutely loved to Nana, youknow, my wife and I both spent a
long time there. Were actuallyyou know, we grew up together in
high school, went to promtogether, reconnected down the
road, eventually got married,had kids moved down here to
Puerto Rico, where we've beenhere for the last two years,
(01:17):
kind of a benefit of workingremotely. So I can get some ways
when I need to. And it's alittle different life than
Indiana.
Rick Butler (01:24):
Should you do have a you have a background in the
construction field also, right?
Ben Barrick (01:29):
Yeah, yeah. So right after. So right before I
graduate college, I took a jobat a commercial maintenance
company in the southeast UnitedStates. I graduate from Troy
University, I was there forabout a year and a half before
the company was sold. I was insales and a little bit
operations there to getkickstart, then I started my own
business, right. Maybe not aperfect timing couple of weeks
(01:52):
after Bear Stearns ran us introuble. So right at the
beginning of a great recession,I started my own business ran
that and over five or six years,my brothers still operate, you
know, the business has kind ofgone through a couple different
iterations. I kind of pivotedfrom there and got into, you
know, sales and management. Andit kind of became my sales
career, which eventually landedme you know, here where I am
(02:16):
today at hearth, where I get towork with 1000s of contractors,
and construction pros everysingle day, helping them grow
their business and really lovingwhat I'm doing. And really the
the journey to get here has beenreally great for me as well.
Rick Butler (02:29):
What sort of helped you to more towards seeing
financing for contractors,builders in the construction
industry, something that yousort of gravitated to what pulls
you toward this financing niche,if you will.
Ben Barrick (02:46):
Yeah, I think it really goes back to when I was
in sales. I remember sitting ina sales room. You know, we had a
group of like, 30 people 30sales guys out there. And each
month, we come and have ameeting. And I told the story a
couple of times. So it's almostheard this before, I'm sorry,
but I'll call him Alex, Alexwas, you know, young kid, kind
(03:09):
of the bottom tier sales guy.
And we had financing in place,like we were selling very
expensive things 60 to $100,000jobs, you know, every every
single week of that we wereselling, but Alex was always
like a lower performer. There'sguys in that room that have been
selling, you know, for 25 yearsreally, really seasoned really
great salespeople. We had thisgreat training once about
offering financing. And the verynext month, reports come out the
(03:33):
scoreboard goes up in that salesroom. And Alex is like number
two. He's traditionally likenumber 27 He's number two, and I
sold like the second or secondor third like biggest month in
company history. Overnightbasically like within 30 days
(03:53):
have done it. And people askthem like man that Alex you
know, the hell did you do? Thismonth it closes many deals. And
it really subtle, simple answerslike just start asking people
they need financing. So themonthly payments is representing
monthly payments to I think itwas like right, then I realized
(04:13):
how impactful it is not just forbusinesses, how convenient is
for homeowners, but what it canactually do to like a sales
professionals life, how they canactually change their life for
the better by helping close morejobs held close bigger deals,
having happier customers andjust making the sales process so
(04:35):
much easier and less stressful.
And Alex went on to I think hepaid for his graduate school in
cash paid versus tuition in cashat Purdue University. I know
he's got a couple of kids now toreally set up like for the rest
of his life. He said that helearned how to sell better. And
(04:58):
financing was such a huge planthat
Rick Butler (05:00):
Well, so when, when financing sort of that light
bulb and looking at Alex andlistening and seeing his story,
you've seen it firsthand. Andusing financing as that light
bulb moment goes off in terms ofa builder or renovator? What
issues are they facingfinancially now here speeding up
(05:21):
to 2023? That, that they'reshowing and telling you about
problems they're having?
Ben Barrick (05:27):
Yeah, I think, you know, I, we hear a lot of and
stuff, I think it comes down tothe individual contractor or the
in the business. But somethingthat really stands out to me is
really the access is what I'mhearing a lot about right now.
Things have really, you know,things have become really
expensive, right? Supplies,labor, the cost the job, all
those things have increased inprice tremendously over the past
(05:50):
decade, especially the last twoor three years. We went through,
like this hyper growth stage fora lot of companies, which had a
lot of great things come fromit, but also create a lot of
cash flow issues. forcingcompanies to really think, you
know, how are we going to payfor these things, how we're
going to buy materials, howwe're gonna buy supplies,
infrastructure, personnel, andpayroll, how's the customer
(06:13):
going to pay for these things?
So some of the best companiesout there are, you know, they,
they hire the best talent. Andthey use the best materials,
they have the the best productout there on the market, right.
But now, they have a lot ofcompetition, because a lot of
competition enter themarketplace last couple of
years. So if you're in thatposition, you know, what do you
do to help a customer justifypaying more, while you trying to
(06:38):
keep operating costs low aswell. So having access to
capital, having access to peoplethat can help you access to the
best talent, giving homeownersaccess to you and your business
and make it easy to buy fromyou, that's increasingly
expensive and challenging. Someof the best out there have
(07:00):
decided, Hey, I know we've donea lot of things the same way for
past two decades. But there'sgot to be a better way to do it.
Then you get some like the newguys, on the flip side, you get
some of the new guys out theresaying, Hey, we've either got to
catch up to the big boys, orwe're not going to exist next
year. So they need access to thesame benefits and the same tools
(07:21):
that traditionally reserved forlike well established tenure
companies. But they normally arecost prohibitive, which puts
them at a constant disadvantage.
So I think, you know, when Ithink about like access, I think
about from like, almost twodifferent standpoints, it's
these well establishedbusinesses, they're trying to
access, you know, new capitaland can kind of keep their
(07:45):
business thriving. And then theaccess being limited or becoming
available for the smaller newbusinesses to catch up and
actually compete.
Rick Butler (07:55):
So let's, let's sort of land there on that small
guy. You know, that's trying tocatch up with the big boys. And
so when when you're hearingfeedback from those guys, and
you know, they're trying to dothe catch up, they're trying to
expand what you hear, like,we're gonna do self financing.
(08:17):
And for that guy that's comingfrom that approach. What's an
obstacle obstacles, probablymore like it that they're
running into when you hear thattype of feedback, hey, I'm gonna
do this on my own.
Ben Barrick (08:31):
Yeah, I think that I mean, we, let's think about
financing from kind of both ourstandpoint from like the blue
tape and like the heartstandpoint, consumer and like,
you know, material financing, tobuy a lot of material to sell a
lot jobs, you have to put a lotof money. That's very hard for a
(08:51):
new company. I've been in thatposition before I remember I
started my business our back inlike Prius the, the go to
vehicle for all construction,seven Toyota Prius and a rear
view camera that was nice.
That's pretty early on adopterof that. But you can't go out
there selling job after job andexpect, hey, we're gonna get
(09:19):
paid in 30 or 60 days and it'llfloat that money. You can't do
that it's too burdensome foryou. So you have to like slow it
down to schedule things outreally far. You have to take
increasingly larger deposits forpeople putting their money at
risk too, because you might needto use up other things. When you
think about like how theconsumer is going to pay for
then. You know, traditionallythere's a lot of go back to
(09:41):
access. Traditionally, smallguys don't have access to
offering financing to thecustomers. There's basically
saying hey, go figure out how toget the money yourself. Here's
my price. And the big boysadvantage has always been we can
do this in your home without youleaving. I can see Secure the
contract right now, not to worryabout coming back here next
(10:02):
month, secure the money. Andthat playing field is getting
leveled. It's getting leveledevery single day. There's so
much new technology out there somany new products out there that
are helping those small guyswin. And really, really the guys
that are very serious about itare taking advantage of it. And
they're starting to see, likethe fruit from that really bear
(10:24):
out right now.
Rick Butler (10:29):
So it's a time factor as much as it is a
cashflow factor. So if I, if Isee someone and I'm trying to
close the deal, I guess timekills all deals is been a
problem. And this is sort of Ilove that level in the flat
playing field just to repeatwhat you said.
Ben Barrick (10:48):
Yeah, yeah, I mean, I think it's definitely timing.
And that's timing for yourcustomer. That's timing for your
business. If I have to go buymaterial, you know, how do I get
deposits for that? If I'm selffinancing it. I can't name
anything more risky than puttingeverything on the line and self
financed, people still do it,people still will allow payments
(11:11):
over the next two or three yearsout of their own pocket. That
seems way too risky for me likeyou don't you don't have to take
that on anymore. This is notMayberry. As much as I would
like the world to be Mayberry,it's not very anymore. And we
know you can't take on thoserisks like that anymore.
Rick Butler (11:29):
No. Cash flow is you know, in all we are I just
say to everybody around here atBlue tape, we're problem
solvers. And that's something Ilearned from you. I was
listening to you and it seemedlike you're always solving a
problem and I hear cash flowthat phrase being kicked around
(11:52):
sort of define that from notfrom Webster's from but from
spinsters dictionary from yourdictionary, shorter defined for,
for the folks here cashflow? whythat's a problem. How you're
looking to solve that.
Ben Barrick (12:08):
Yeah. You know, the, again, not Webster's, but
Ben's simple Indiana terms is,do I have money tomorrow for the
things that I need to do today?
So is it is it that I am doingsomething right now, that's
(12:29):
gonna strangle me or mybusiness. In the next couple of
days, next couple weeks, nextcouple months, they got I think
a lot of us, myself included,fell into the trap of I'll
figure this out in a few months.
Like, it'll come together, it'llwork out. And sometimes it does,
and sometimes it doesn't. And soa lot of what we're trying to
(12:53):
do, you know, a lot of what Iget to do each day is helping
people really solve that problemof, hey, you need to be getting
paid for your job and you getpaid respectable prices for your
jobs, you get a lot of workgoing into this, you need to be
able to collect payment on yourterms, you need to be able to
not take the risk of financing ajob. But you know, that's not
(13:17):
your burden as a business owner.
That is a added benefit you canoffer to your customers to make
it easier for them. That doesn'tmean you have to take the risk
on in that kind of scenario.
Rick Butler (13:31):
So just to clearly differentiate what we do and
what you do, I'm working with asupplier for materials to
finance those materials. Forthat contractor, as an example,
you're working with a contractorto finance that project for a
homeowner or residential, wouldthat be a good differentiator
(13:52):
from what we do? Yeah, we'rehelping cash flow. To to okay to
two different segments. Whenwhen my supplier or your
contractor when the light bulbgoes on this relieves cash flow.
It helps, you know, get the dealclosed. What do you think that
light bulb moment is for that?
For that small guy trying tocatch up close more deals? Where
(14:16):
do you think in terms ofleveraging financing and
offering it where does thatlight bulb go on for him or her?
Ben Barrick (14:24):
Yeah, I think what I think there's so many
misconceptions about financing.
All financing does is create acash paid customer for you.
Whether you're a suppliergetting having a contractor buy
material from you, you'regetting paid cash, like you're
just that's all it does for you.
(14:46):
As a contractor offeringfinancing to a homeowner. All
you're doing is turning theminto a cash paying customer. The
idea that financing and incredit those complicated
subjects and I did not have anMBA. I've never worked on Wall
Street. I've been there a coupletimes to visit, never held a job
(15:08):
there before. There's a lot offinancial people really smart
savvy, what CNBC, you canunderstand half the things we're
talking about. I think that'sprobably where a lot of people
get their financial wisdom fromit saying, Man, financing sounds
complicated. Until it isn't,until you do it. And it's not
really that complicated. Thelightbulb moment usually is
(15:33):
three things I'll say threethings. Number one, when you
realize that it's not doesn'thave to be complicated, it's not
complicated. at all it reallydoes is create cash pay
customers for you. Number one,your customers will borrow money
from a 401k against their housefrom Uncle Tom down the street
from your savings account, orfrom the bank, you just help
(15:55):
them finance from. Number twowas when you realize when you
create that buying experience, Italked about experience and
convenience a lot here. So tellme if I'm boring you with those.
But no, no, we create a buyingexperience for a homeowner. You
tend to sell more often, a goodbuying experience, you tend to
(16:18):
sell more often. And for highertickets. So who doesn't want to
sell? When you offer financing,you're more likely to close the
deal. Who doesn't want to be inthat situation? You save time
you save money, you sell more?
Sell faster?
Rick Butler (16:38):
Turn It In the coin. You know, you're talking
to folks in the constructionindustry every day, you're
hearing back from the peoplethat work with you every day
feedback, what's the thing rightnow? You know, coming from the
bottom up from the small guy up,that's just pulling your hair
out?
Ben Barrick (16:57):
Yeah, there's a lot of things, I give you quite a
few things. But I don't think alot of them are new, I think
from like the financial side.
There, let someone just overallfinancial. A lot of people just
don't know their numbers. Theydon't know the actual costs, the
actual job cost, they understandwhat the material cost, and the
(17:19):
idea of the labor that might beinvolved with it, but not
pricing in fixed costs into thejob. The cost of administration,
the cost of fuel, you know,adding all your payroll costs
and, and really understandingOkay, here is my profit, I need
to hit each each job. Andwhether they're hitting it or
not. They don't even know. Theythink they're making money, but
(17:41):
maybe they're not making money.
So that's like the overallfinancial thing I've you know, I
always recommend, hey, if you'rerunning a business, I know you
love your trade, but you're butyou've got to be business first
to does it only or be able tocontinue doing it. You know,
invest in yourself to learnthat, whether you're hiring
someone to do it for you, orwhether you know, you're going
(18:03):
to take time to learn from somekid on YouTube that can probably
teach you it or you know, takeclasses but really understand.
Understand your numbers todayunderstand where your numbers
gonna be in six months and ayear kind of able to project
those out. You have a lot morelongevity as a business a lot
more stability, too. We alwaystalk about growth, I think
(18:24):
companies always think aboutgrowth, and they neglect in our
industry. We talk about growth,you know, we want to hire X many
more guys, we want to grow intothese new communities, yeah, so
on and so forth. Withoutconsidering the stability. And
we don't have stability in thisindustry. Going back to cash
flow, you can be out of even beout of money, you'll be able to
(18:45):
earn $1,000 pretty quickly. Andif you're not stable, you don't
have you know, the FinancialStability underneath your
company. That's hard to climbout of, you know, if something
goes wrong and things go wrong,our industry right wreck, things
go wrong every single day onevery job sites. And so you
(19:06):
better know what those numbersare coming from in terms of like
the financing side. Not going toname names. Am I going to speak
disparagingly of anyone outthere, because I think everyone
has a place in the market. But Ithink the cost of offering
financing has become soburdensome not just for
(19:30):
companies but also forhomeowners. I think a lot of the
fees are involved with financingare putting companies at a
disadvantage. People arestarting to reject the idea of
offering financing, which isgoing to hurt the bottom line in
the long run. I think you knowwithout giving like pointed
advice about what to do. I wouldencourage people to just
(19:54):
understand what they're offeringbetter. Understand, like we know
interest rates are kind ofcrazy, right? No bathroom round,
right? Get an understanding ofwhat that means for you know
your sales process, evaluatewhere you are, understand how
much money you're spending onthat how much money you're
making from that, and make thebest decisions based upon those
numbers. Not just because I'vebeen doing it this way for five
(20:17):
years, I will keep doing it.
Rick Butler (20:19):
Let's go back to you know, let's go back to Ben
in that Prius. Back in the day,you said 2003, what's the what's
the best thing you could tellthat guy and, and relate it to
what we've been talking about.
Ben Barrick (20:33):
The two things I would tell myself is number one
that quit talking so much. Justcustomers know what they want.
Customers are buying for theirreasons. You don't have to tell
them everything. You don't haveto have a plan, they already
(20:54):
have a plan. You just got toshut up and listen, sometimes
listen to what your customersare saying to you. Listen to how
they're saying things to you,who's telling you those things.
And listening to their buyinghabits. I think as business
(21:14):
owners, and salespeople we thinkwe know, it's this weird
disconnect, I don't know why ithappens. We have an idea about
how people should buy from us.
But we're also consumers. Andfor some reason, we have a hard
time connecting our consumerbrain to our business brain and
realize our customers should buyfrom us this way. But our
(21:38):
consumer brain says, but we likebuying this way. And those never
get connected for some reason orindustry. Not sure why. But if
we listen to how our buyersactually consume things, how
they actually want to buythings. I think we're all at a
huge advantage. We see a lot ofcompanies out there like you can
(21:59):
buy, you can buy roofs onlineright now, without a sales guy
ever going to your house. It'sincredible. What people are
doing it, and a lot ofhomeowners are doing it. That's
the That's the new buying habitsof consumers. My number number
two to pile on there. And thisis more for the small guy, the
(22:24):
small guy who I love. I love thesmall guy, the guy who has to
overcome everything. We talkedso much about growth and
expansion. And we had this hypergrowth stage, you know, those
last couple of years. And Ithink the focus traditionally in
construction and contracting isso much about being the big guy.
(22:50):
And by being the big guy, youhave to be everywhere, right?
You have to cover all thegeography. When I thought when I
was in Central Indiana, I'mgoing to grow my business, which
means I'm going to expand to sixnew counties. Well, turns out,
it's a lot easier to sell 50More jobs this year, in my own
(23:14):
neighborhoods in my owncommunity, versus traveling two
hours away each day to sellthose jobs. They get people
really are determined to owntheir market, own their
communities. You make so muchmore money, you spend so much
less time you want to be the goto guy when someone has someone
at church says hey, I need a newroof. You want the Minister to
(23:39):
say Hey, Ben is the Best RooferIn town you should call him.
Like that's what you shouldstrive for. That's how you grow
your business organically. It'sa lot cheaper to do it, it's a
lot easier to do it it's a lotmore cost effective to do it.
But I think sometimes we getstuck in a mindset where in
order for me to grow my businessI just have I just need more
(24:03):
customers. But a lot of thosecustomers are in your backyard
already.
Rick Butler (24:13):
Oh, good stuff, man. Those are such good
nuggets. I hope the folks aretaking notes and we're gonna you
know, just review this. There'sbeen so many good nuggets. I
want to I want to go sort ofstore to start landing the plane
here from this aspect. What I'mdoing is I'm helping that guy on
(24:36):
terms 3060 90 days that bluetape to use trade credit for
supplies and materials, whetherthat's a supplier offering it or
a contractor utilizing andleveraging trade credit helped
me and a three story elevatorpitch not the Empire State
Building elevator pitch but thethree story elevator pitch which
(24:59):
you're doing As you guys aredoing it hearth,
Ben Barrick (25:02):
we are trying to make the selling process easier
for contractors. And the hearthapp is going to allow you to
become the most convenientperson to buy from, thus
allowing you to sell more, sellmore often had happier
customers, give them a betterexperience.
Rick Butler (25:23):
How can how can folks get in touch with you and
you possibly help them or pointthem in the right direction?
Ben Barrick (25:30):
Yeah, reach out, reach out to me on LinkedIn,
reach out to us at heart. If youwant to learn more about that as
well.
Rick Butler (25:36):
You don't know how much I appreciate your time
brother and what I've alwayslearned from you, and I know the
folks are gonna, you know, getsomething so appreciate you,
brother.
Ben Barrick (25:46):
Yeah, man, I appreciate you having me here. I
really look forward to hearingthis all across the platforms
here. And I've already liked andsubscribed to you guys. So I
love the podcast. We lookforward to what you guys have in
store ahead of us. Thanks, man.
Rick Butler (26:00):
You got it, brother. Adios.
Announcer (26:02):
Thanks for listening.
And don't forget to subscribefor more episodes like this. For
more information on constructionpals podcast and blue tape,
please visit blue tape.com
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