Recently, we had the opportunity to interview Shawn Van Dyke, a construction business expert, coach, and author, on his business journey from construction business owner to business coach and the lessons he learned along the way.
Shawn shares his key financial and operations advice for construction businesses, the business systems he teaches at the Built to Build Academy®, how he discovered Profit First, and the books he recommends entrepreneurs read.
Below is the transcript of our enlightening interview with Shawn:
Shawn’s Construction Business Journey and Lessons
Can you tell me about your career journey before starting your first business?
I started my career as an engineer, but eventually became a construction manager for a real estate developer, which required a lot of traveling. I loved the work, but wanted to do it without having to travel so much. That’s when I decided to start my own construction management firm in Knoxville, Tennessee.
My first business was focused on local real estate development and construction management. However, in 2008, banks stopped lending money to real estate developers, which forced me to pivot and start my own construction company. I had some experience in the industry and knew subcontractors and professional construction people, so I made the transition to residential remodeling. And so that really is what got me into residential general contracting and then found that I really liked that too. So I did that for several years.
What were some of the lessons you learned at your construction business?
When I started my construction business, I didn’t know that other contractors didn’t charge for estimating or planning. In real estate development, it’s standard to invest a significant amount of money in due diligence and planning, and that’s what I did with my construction company.
When homeowners would call me up to remodel their homes without any plans, I would charge them for all the professional services and planning. This helped me separate my business from other contractors and attract better clients, subs, and projects. After a couple of years, I found out that other contractors weren’t doing that, which helped me weed out customers who weren’t willing to pay for professional services.
What were some of the best ways you acquired new customers for your construction business?
I initially relied on word of mouth marketing for my contracting business. But I realized that I wanted to control what people were saying about my company. To do this, I began asking clients for testimonials throughout the process, not just at the end.
This way, I could use their feedback to improve my services and leverage their positive comments in marketing. I also invested heavily in my website, focusing on highlighting the process and the benefits clients would receive at each step. By doing this, I found that clients were better able to understand the process and had a more positive experience overall.
What were the financial lessons you learned from owning your own construction business?
When I first started my business, I quickly learned about the importance of paying taxes. After my accountant told me I was profitable and would owe around $20,000 in taxes, I struggled to understand the calculations he was explaining to me. I decided to set aside a percentage of revenue to cover taxes. This strategy worked for me, and I continued to set aside a percentage of revenue for taxes each year.
This helped me understand that every dollar that comes into my business needs to cover expenses, including taxes, operations, and other costs. By breaking down expenses into percentages, I could see where the money was going and ensure that I had enough to cover everything. While this was before I discovered the Profit First system, it was a valuable lesson that helped me manage my finances and grow my business.
Can you tell me about your transition to becoming the COO at a construction business?
I have a friend who specializes in high end trim and millwork and we were growing our businesses at the same time. He approached me one day asking for advice about hiring someone to run his business. As someone who learned early on that spending time in front of a computer analyzing numbers and data was just as important as producing work in the field
I encouraged him to find someone to run the business side of his business.
He was a great salesperson and convinced me to come on board to help him run his business. The opportunity to take my systems and apply it to a bigger team was too good to pass up. It was crazy in the beginning, but we were able to hire a lot of people and put systems in place to grow the team in a sustainable way. After almost four years, I realized I could teach these systems to other construction business owners.
How Shawn Became a Business Coach and Author
What inspired you to become a business coach and author for contractors?
I didn’t know what a business coach was until my wife was diagnosed with multiple sclerosis in 2008. We were in a lot of medical debt and I needed to find a way to make money and be around my family, but the only thing I knew was construction. I started researching business coaches and came across Richie Norton who suggested I become a business coach and meet with clients virtually.
I was skeptical at first but decided to give it a try and within six months, I quit my job as COO and started coaching full-time. I started with only 30 or 40 people on my email list and a few clients, but I worked hard and gradually got more clients. My goal was to pay off the medical debt by helping construction business owners on the business side.
How did you first learn about Profit First and decide to write a book on Profit First for Contractors?
I love to read and listen to books. In 2017, I burned through around 50-60 books a year while traveling with my family. I came across Mike Michalowicz’s book Profit First, and I realized that the system he described was similar to what I teach contractors in my coaching business. I decided to get certified in teaching Profit First to contractors and paid to join Mike’s group because I believed in it so much. As part of the certification process, I had to implement the Profit First system in my own business first. During a coaching call, I suggested that Mike should write a book specifically for contractors since his book was more geared towards general business.
My coach then suggested that I should write the book, and Mike supported the idea. So I wrote Profit First for Contractors and tried to inject my personality into it while staying in my lane. Initially, I thought the book would only serve as an expensive business card or a leave-behind for speaking gigs. But it gained popularity quickly and the rest is history
Have you written any other books?
I have written a book called The Paperwork Punch List, which was actually the first book I wrote. My business coach advised me to take my valuable information and experience, boil it into a book, and give it away for free to generate leads. I focused on solving the biggest problem for many contractors, which is the paperwork and business side of the business, and put it all into a free ebook. That’s how I got leads and launched my coaching business. The book is still available on my website.
Shawn’s Business Advice and Systems for Contractors
How did you learn to create business systems – was it from experience or learning from business coaches?
As an engineer, I have always had a systematized approach to everything. However, when coaching others, I learned that what is basic knowledge to me can feel overwhelming and expert-level to others. I had to develop a gradual way to get people there, creating frameworks or sticky ways to remember things. For example, I use the analogy of a tape measure to help construction business owners understand math concepts they already know.
By presenting concepts, laying out principles, and simplifying information, people can gain confidence and familiarity, making it easier to tackle the details. I learned this approach from other business coaches who helped me develop my business and taught me to boil down information and simplify it even further.
What are some of the key struggles contractors face and what guidance would you give to overcome those struggles?
The biggest challenge for contractors is understanding the financial side of their business. Many of them struggle to comprehend financial reports like balance sheets and profit loss statements, and they don’t charge enough to run a profitable business. I always tell contractors, hey, if you can read a tape measure and add fractions in your head, you already know more complex math than is required to run your business. Once they learn how to apply basic math principles to their business finances, the next hurdle is increasing their markup.
A 20% markup is not enough for a sustainable business, and contractors need to charge more to be profitable. This often means finding better clients who are willing to pay higher prices. Contractors also need to be willing to say no to clients who are not a good fit for their business, as there is power in walking away. No is one of the most profitable words a business owner can say, especially in construction.
What are some key operational systems construction business owners need to set up for their businesses?
The foundational system for any construction business or business owner includes operational systems of time, sales, and cash. Business owners often wear many hats and fail to prioritize their time, leading to a lack of growth. The key is to identify the most important tasks for the business owner each week and block out specific times for those tasks. Stephen R. Covey said, “schedule your priorities, not prioritize your schedule.” This includes important tasks such as estimates, financial review, and job costing.
The next foundational system is sales, which involves selling to the right customers at the right price in the right way to create the biggest margin for profits and time.
The final foundational system is a financial system like profit first to manage cash flow and organize incoming money for taxes, operating the business, owner’s salary, and other expenses. These systems help build a solid foundation for a business and ensure success.
Can you tell me more about the Built to Build Academy and what you offer?
We started the Build to Build Academy to help construction business owners become more confident and successful by providing operational and system support. At the Built to Build Academy®, we’re focused on creating and implementing systems for various aspects of a business, including marketing, hiring, organization, and customer experience.
We also teach contractors how to build any system by starting with the desired outcome, determining the frequency of the system, creating step-by-step instructions, identifying necessary tools, and establishing what other systems need to run first. We pride ourselves on being system nerds who are committed to helping construction business owners streamline their operations and improve their businesses.
Shawn’s Tool and Book Recommendations
What are some tools you can’t live without as an entrepreneur?
Personally, I find my cell phone to be both a good and bad thing, but the technology is amazing. I remember when I had to carry around a bag and a computer everywhere, but now with cell phones, I have access to every app and the power of these devices is incredible.
In my business, I teach contractors the importance of tools like landing pages that are connected to a CRM. Many construction business owners have websites that do not benefit their business other than showcasing pretty pictures. Landing pages, on the other hand, can help capture a cold audience’s information and nurture them into a warm prospect by sending valuable information, scheduling calls, or offering coaching programs.
Another crucial tool for entrepreneurs is Zapier, an automation tool that connects various platforms that may not inherently be connected. We use this tool frequently and always seek new ways to leverage it for our business.
Do you have an entrepreneurial role model? And if so, who is it?
As a business coach, I have personal mentors who I have worked with, such as Richie Norton, Mike Michalowicz, and Brad Martineau, who helped me with business automation and framework development.
However, I also consider people whom I have never met as my mentors, like Michael Hyatt, Patrick Lencioni, Alex Hormozi, and Horst Schulze, whom I admire for their expertise in managing time, organizational clarity, business strategies, and building a culture at scale. Although they do not know me, I read all their stuff and try to follow their advice.
Horst Schulze, who used to be the CEO and founder of the Ritz Carlton, is particularly inspiring for me because of his exceptional customer experience and system design. I have many other mentors, but these are the ones that I often think about.
Which books would you recommend to entrepreneurs or aspiring entrepreneurs?
I’m a book enthusiast and I have read and listened to many great books on various topics. Some of my favorite business books include Megan Hyatt Miller’s Win at Work and Succeed at Life, Patrick Lencioni’s The Ideal Team Player, Hormozi’s 100 Million Dollar Offers, and Horst Schulze’s Excellence Wins.
I also recommend Daniel Kahneman’s Thinking, Fast and Slow, which explains how the brain works and is beneficial for sales and business. Cal Newport’s So Good They Can’t Ignore You is a recent book that I enjoyed. The Captain Class by a sports journalist is an excellent book on leadership and building a world-class team.
For entertainment, Matthew McConaughey’s Green Lights and David Grohl’s The Storyteller are both very entertaining. I also recommend Steve Martin’s Born Standing Up and several nerd books like The Checklist Manifesto, Upstream, and Friction, which are all informative reads.
We hope you enjoyed this interview with Shawn Van Dyke as much as we did. If you have any questions for Shawn or want to recommend another leading entrepreneur in the trades to be interviewed, please email nicolas [at] northone.com.
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