Keep It Simple

Talon Construction Group

Rick wound up the development business and moved to the south coast, forming Talon Construction Group four years ago at Wollongong on the southern fringes of Sydney. Nowadays the company’s main business is contract building, and Rick says, “we have set ourselves up to build for developers. Having been a developer myself I know what they want, which is a very competitive price and getting a project built as quickly as possible so they can refinance their construction loan or settle on presold properties sooner.”

A combination of speed and price? That is hardly rocket science, is it? Surely every developer (and every client in the construction industry) should be able to expect that? Yes they should, says Rick, but not everyone in the industry is in a position to provide these twin pillars of good service. Partly it is down to the way a company is structured, and Rick believes Talon is put together in a favourable manner. “I play a very hands-on role in the construction management,” he explains. “I deal directly with my site supervisor.”

Indeed, our conversation took place on a windy and very busy site as Rick was simply too short of time to dash back to the office. “I do not have ‘middle men’ – project managers – in between, so effectively I become the construction / project manager for each project and I keep my finger on the pulse,” he says, “not losing sight of any project and its timeframe for completion.”

He explains that in his former company he found that with project managers interposing in the relationship, “it was very easy for them to hide the truth, the facts about their shortcomings, and it was me that had to pick up the pieces. There were jobs that were running over time or over budget and because I had taken my finger off the pulse and was relying on their say-so, I was in a position where I lost control of the job. Now I play a role in the management of each project and as Managing Director, the bottom line affects me and the time affects me. It means I stay busy, but I am doing what I love to do and I much prefer it to being stuck in the office.”

The ‘office’, adds Rick, tends to be wherever the biggest work site is at any one time. He finds developers, in particular his clients, prefer this way of working instead of the stereotype of someone “in a flash car and a suit.” Rick relies on reputation rather than personal image to get the work, and aims to develop mutually rewarding relationships with customers. In a way it’s the opposite of the standard image – the builder normally wears a suit to avoid looking like a builder, while Rick avoids looking like a businessman by wearing jean shorts and cowboy hat (as pictured on his website). “If people want to judge me by whether I wear a suit and drive a flash car, then I am not the builder for them. Likewise, all the developers I work for know they don’t have to dress up for me! We’re here to get a job done and we need to get in amongst it.”

Rick grew up working in the trenches doing his trade as a carpenter and, as you might expect by now, is still willing and able to get his hands dirty if necessary to expedite a project. He has seen the dangers in some larger building companies of the disconnect between management and the job itself on site, some of which are more or less inherent in a company’s size and structure, with gradually increasing layers of insulation and isolation from what is actually going on in the project. “Then you get situations when the site staff are in a war against the office staff and it just doesn’t work. It’s bad for productivity,” he says.

Having previously experienced that sort of antagonistic business relationship, Rick decided to do things as differently as possible. “There had to be a better way to increase efficiency; this is it. It’s also amazing how much it frees up my mind – I am blessed with a good memory and I can walk though any job in half an hour and know what is happening on every floor. That helps with programming of materials and suppliers.” He then hands the reins over to site managers to ‘fine tune’ the efforts.

Ensuring – as far as possible – that nothing goes wrong is essential to retaining profitability in the current construction industry climate, because everyone is working on such tight margins. “The only way to try to make a dollar is to make sure everything runs smoothly,” Rick explains. Okay, so he doesn’t make much on each job because of those small margins, but if everything goes smoothly, he can complete a greater number of jobs per year “and still make a living. It just means I get busier.”

Rick acknowledges that the market is generally rather sluggish at present, although Talon remains busy. He attributes the company’s relatively full order book to careful preparatory work, seeking out potential projects and establishing ongoing relations with developers in projects that may take several years before they come to fruition. With banks generally so lending-averse at present, developers appreciate Talon’s practice of compiling a lump-sum tender at DA stage so the client can go to the financial market sooner rather than later with a firm outline of the costing of a project. “By winning a project off the DA with a fixed lump sum tender, we then take it through to CC. Not many other companies that I know of lock in a price before the CC documents are issued, but it puts us in a good position to win projects at this early stage. We are happy to wait and do a full tender from client supplied CC documents, but more often than not we win projects at the DA stage.”

Part of the secret is in Rick’s experience, which enables him to price a job accurately – within five per cent on a lump-sum every time. “I price the job in the first place to win it – I don’t want to waste my time any more than the developer’s.” There is a weekly profit and loss on every job to ensure Talon remains ahead on the deal, and again Rick points out that because it’s his own company he has something of a vested interest – perhaps more than an employee who might be a project manager – in ensuring he stays out in front. “I love the game but I have to put bread on my own table too.” It’s like getting paid for doing his hobby six days a week, he adds.

At present Talon employs around a dozen people – carpenters, labourers and site supervisors – with the rest of the trades subcontracted. There is keen competition here – if you can get the finance, it’s a fine time to be building, Rick says – but he remains on his guard against suicidal pricing which in the end benefits no-one. “I know what the bottom line of a contractor is and I won’t let them go below that,” he says. “My budget on a job is realistic in the first place and it would be foolish for me to have someone come on board knowing full well they cannot finish the job. That doesn’t help anyone.” Typically Rick gives to the subcontractor a price which is in his budget but which he knows the subcontractor can meet – it saves time and grief and gets the job finished.

How does he keep track of the financial side of each project? Rick developed an Excel spreadsheet application of his own some 25 years ago and has used it ever since, simply updating the rates. “Even on a job worth several million dollars, it only takes me three or four days to turn round a tender that will be within five per cent of my final price.” Whereas it costs some companies perhaps five grand to compile a tender on a million-dollar job, for Rick it’s just a couple of days of his time. “There are all sorts of flashy systems in the market today but they are just too complicated. The system I have is just so accurate and simple that I can tender a lot more projects.”

This business, he agrees, is not rocket science. It just needs a bit of thought.

Home Automation

Call it ‘domotics,’ and you are likely to receive a blank stare, but refer to it as ‘smart home’ or ‘home automation,’ and you will get a nod of acknowledgement. For the past few years, consumers have heard the word ‘smart’ attached to countless products and services, from food and drink to snacks like popcorn and mobile phones, which no one seems to refer to as a ‘cellphone’ anymore. Yet what, exactly, constitutes ‘smart’?

March 28, 2020, 8:26 PM AEDT