Is the construction boom over? As the market tightens, new competitors are driving down prices, and cash flow is becoming a daily battle. For many owners, the strategies that created massive growth are now creating massive risk. But what if you could pivot your approach to not only protect your profits but also strengthen your company for the long term?
In this episode, Australian construction leader Jimmy Starbuck joins Taylor to pull back the curtain on the harsh realities of today's market. They reveal the critical mindset shifts and strategic pivots you must make in cash flow, team management, and personal leadership to navigate this downturn. This isn't just theory; it's a playbook forged from decades of experience scaling a company from one machine to an industry giant.
Topics:
- Turning business slowdowns into brand building
- Team restructure and building scalable systems
- Finance smart by matching debt, depreciation, and revenue
- Navigating content fatigue and standing out online
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Episode transcript:
Taylor White: Holy cow, we are getting close! Registration for CONEXPO-CON/AGG 2026 is live, baby, and we cannot wait to see you there. I honestly can't wait to see everybody there. I'm super pumped in Vegas, March 3rd to the 7th, 2026, to see over 2,000 exhibitors, nearly 3 million square feet of equipment, gear, tech. All the heavy hitters of the industry are going to be there, so you might as well be too. But also, here's the kicker. You can save 30% on your admission right now with code PODCAST30. Again, code PODCAST30 to save 30% right now on your tickets. But don't wait because this is only valid through Friday, December 5th. So grab your crew, mark your calendar. We're gonna see you out there.
Welcome back, everybody, to the CONEXPO-CON/AGG podcast. I am your host, Taylor White.
Thank you for John Deere Power Systems for sponsoring this beautiful podcast.
And with me here today, I have the man, the legend, Jimmy, Jimmy James, James Jimmy Starbuck.
Jimmy Starbuck: Whatever you like to call me. Thank you very much for having me. I appreciate you taking your time out of your day to put me on and talk a little bit of rubbish for an hour.
Taylor White: I'm happy to be here with you. And what time is it where you are? It's 5:00 p.m. Eastern right here.
Jimmy Starbuck: It's 7:00 a.m.
Taylor White: Oh, so we're opposites. I get started your workday, and it's end of my work.
Jimmy Starbuck: Yeah, definitely the first podcast, I think we were talking about maybe doing it at 5:00 a.m. So I was able to push it just a little bit.
Taylor White: You know what, Jimmy? You know what I said? I said to my kids, I don't need to eat with my family. Jimmy is more important. So they're all at home eating rib eye steaks. I'm going to stop at McDonald's on the way home and eat a burger.
Jimmy Starbuck: But you don't look like a burger guy.
Taylor White: Look at this. I'm a burger guy.
Jimmy Starbuck: Actually. The gray was hiding it. Now we're talking. Don't worry, my shirt's a little bit. It needed a button.
Taylor White: Oh. But it just happens. You get to a certain age, and then things just start snowballing and then you're like, “Wow, if I ate a burger, I'm like fatter the next day. I don't know what's going on.”
Jimmy Starbuck: Yeah. But life gets really busy is what it ends up being.
Taylor White: It's so hard to find the time. And like Case, you know what? I recently did, and this is a great conversation. I was saying this to a group of guys the other day. I started scheduling my workouts, like meetings. I block it out, I put it in my calendar, and I treat it like a meeting. It's like a non-negotiable. I have to go do it and it could be at 7:00 a.m., 6:00 a.m., 11:00 a.m., 3:00 p.m., doesn't matter. I schedule it like a meeting where it fits in my schedule, and that's been really good.
Jimmy Starbuck: How many do you do a week?
Taylor White: About five.
Jimmy Starbuck: Five, not bad. So I do three or four. I try and I do the same thing. So I am 6 o'clock till 7:00 or 6:15 till 7:00, something around there in the morning. It's important, I think, to try and keep doing that. Even though life gets chaotic around, I find I don't sleep as well if I don't do it, which then that's just a snowball on top.
But in saying that for years and years, I don't think I could have fit in a workout. You know, it was early morning wake ups and then, you know, I think that when you move a little bit into the office, not that the office is. It just has a little bit of different flexibility. But the flexibility sometimes is too because then you end up working at 10:00 p.m. at night, sending emails when it's pretty hard to drive an excavator on a job site at 10:00 p.m. at night. So each one has their benefits.
Taylor White: The flexibility is something that. It is a privilege, and I think that it's good that you acknowledge it because it's a privilege that I have as well, too. If you're running an excavator every day or driving a dump truck, you can't go workout at 11:00 a.m. and treat it like a meeting. But it's definitely a privilege. That is something new for me as well, too. Within the last two years. I could not have done that before. But I love it, and I appreciate it because it is nice, and I do need it.
Jimmy Starbuck: I think that it's definitely a privilege of it. I've probably had it just slightly longer that privilege. It took me a while to get into it though. I actually went on a holiday somewhere and I got lots of photos taken of me because someone I was traveling with, big influencer like yourself, he had a photographer traveling with him. So the photographer ended up snapping a few photos of me and I got him and God, what a fat.
Taylor White: That's what does it. It's the photos afterwards that you see. Like how I think I look on camera. And then when Jake, my videographer, like send me clips and he's like taking it from down here and I'm looking sideways and I'm like, “Dude, I look like. I like don't even care about my body.”
Jimmy Starbuck: Oh, I look like I was £300 in some of these. I wasn't. But you know. Oh, I forgot you're a kilos man as well, so.
Taylor White: No. Yeah, no. We're pounds.
Jimmy Starbuck: You're pounds. But you do centimeters and cubic meters.
Taylor White: I know, I know, it's weird.
Jimmy Starbuck: Okay, got it.
Taylor White: Yeah. We're a mix. We're a mix. Okay, so all that, all that to be said. How have things been? We've talked. We have been on the podcast numerous times. How have things been going? I know you started your like, I've been watching your Podcast. Your stuff that you're putting out is fantastic, by the way.
Jimmy Starbuck: I appreciate that.
Taylor White: You're at this point where, like, you're really, like, sharing a lot of knowledge that's in your head, and I think that it's really important to get that all out. But how are things going down there in Melbourne? Or Melbourne?
Jimmy Starbuck: Yeah, people call it both. Americans like the Melbourne, Australians like the Melbourne.
Taylor White: Melbourne.
Jimmy Starbuck: There we go. It hasn't been as good lately. We went through some real government spending that we're, like, sent our economy to the moon. Like, we were killing it in a really great way. I'm no economist either, though. But don't worry, I'm a TikTok expert, so I could fix it. I could fix it like this. But, you know, we really sent it to the moon during COVID There was a lot of work out there. House prices were up, machine prices were up, even all the way down to a. You know, the places selling topsoil are selling more topsoil, which means we're hauling more topsoil.
So, like life's gravy, we probably went through a bit of a. We were at the down period at the moment. They pulled back on some government spending. There were less houses being sold overall, but it gave me a little bit more time. Like, I've got a great team that I built to, let's say, take care of. I don't know, we'll put numbers on it. 150 people on site per day. I had that team and so. And I was part of that team. So when we dropped to 100 or 110, I'm not firing people immediately, but it does mean that I have some more time to do stuff. And so one of the things that I took the time, took up some of my slack was the podcast and doing some LinkedIn and putting some different thoughts and feelings out there than what I normally had of just taking a photo of an excavator.
I think that the world's gone a little bit funny. You know, COVID sort of really turned it upside down. And maybe this is the new normal, too. You know, maybe we forgot what it was like to actually have a quiet winter when before we were all in our ass off. Maybe a quiet day where all of the boys come back to the yard and, you know, clean excavators and, yeah, wash trucks. Because that happened. Right. But then it didn't happen for so long, and we're rolling in money. I don't know. You know, it's all about what the perspective comes out like too.
Taylor White: We're the same here right now, and I'd be interested to know like just exactly how you're combating it. But I mean for us, we were the same, right? Things were crazy, crazy, crazy. And what we're seeing right now is a lot of the, there's a lot of guys that started up during COVID and during those times and we're pricing against those guys right now and they're slow because everybody's slow and they're working for pennies on the dollar.
And that's what's really frustrating. It is what it is. But that's I guess what the frustrating part is right now is it's like we're all out there and if we really want to continue, you know, like you on the same trajectory of keep everybody and keep pushing and growing, well then we're going to have to reduce our margins by crazy amounts. And it's at that point right now where we're like, okay, do we do that and does it make sense or do we downsize a little bit and exactly find more time to maybe do some other stuff.
Jimmy Starbuck: You also like, you can, you can, you can flip the binoculars around so you're looking at them from the little ones now and maybe you need to look at them from the big ones, you know, or whichever, vice versa. I don't, not that good with binoculars. But maybe if you look at it over a five year sort of thing, you know, Starbucks is still making great money, maybe for the last 18 months hasn't been making as good of a money, you know, like you say exactly the same. You know, margins are really tight. There's guys with a heap of gear parked up and they can't sell it because the ass has fallen out of the second hand market, which I don't know if it's the same for you guys, but you know, they were, they were demanding a premium and now they're not.
And so what are they better off to do? They're paying repayments on something that sits in the yard. They cover the fuel in the operator. They're at zero anyway with the repayments, you know, like may as well go dig a hole. Maybe they'll find a variation, but they often don't have. You know, I've got 20 people who work in my office. I've got two offices, you know, like how are you meant to pay for two offices and sales reps and accounts and finance people and I got full time safety and compliance. It does make it difficult. No doubt.
One of the ways We've combated that is we recently tried to push into a new state just for some hourly hire work at the beginning. When I say a new state, Australia's big but doesn't have many states. It's similar to Canada. So it's 1800 kilometers, just over a thousand miles away. You know, it's not like I know that some states in America is like, “Oh, I'm working in a new state and it takes them 20 minutes.” Nah, this is like a, the truck drivers used to do it in a day, but it's a two day drive. We're pushing in up there. We have tried to open up some of our scope of what we would normally do to increase the jobs that we're able to price, but the jobs aren't, the jobs aren't there as much. I was talking to a really big builder yesterday. Huge. Would have had 500 people on, 400 people on. He goes, “Jimmy, would dry a hundred guys.” We're down too. And he goes, “We're just ticking.” He goes, “We got a lot of tenders and estimates out.” But he goes, “Haven't really picked up anything,” which is tough.
Taylor White: Yeah, that's crazy.
Jimmy Starbuck: What's it like over there?
Taylor White: Same thing. And you know, we're kind of adjusting, pivoting as well too. But for us it's actually interesting because we do a lot of the residential and commercial work, but the residential side has been super, super quiet. Nobody's really building homes or live in them. And the biggest driver for that was the interest rates. The interest rates going higher. Everyone kind of like we're going to hold on to our money.
But it's also difficult too. And I'm not sure where your parliament is down in Australia, but like I'm in Ottawa. Ottawa is like, you know, the Washington D.C. of Canada. This is where our government is. So no matter what, we always still have some government spending and we always still seem to have government funded projects and people are spending money. You have a lot of, we call them govvies. A lot of government workers here. So guaranteed paychecks are not really getting laid off unless like a government comes in and wants to like actually cut costs and save us money, which we don't have.
Jimmy Starbuck: That, that's not really happening now.
Taylor White: No, it's not at all.
Jimmy Starbuck: You know, we've got, everyone's so used to being, you know, the billion, trillion, whatever dollar deficit. It's like it doesn't even matter anymore. It's, it's a, it's fog. You know, they say, “Oh, it costs 300 billion,” and everyone goes, “Okay,” you know, like it's, it's moved so far past being relevant to us. We're probably similar where I think the second biggest city in Australia, we're always going to have some sort of government funded building. We also have a lot of homes that we need to be built. We got a little bit of a housing crisis here, but yet no one's buying the homes.
Taylor White: That's the same as us. Everyone keeps talking about housing crisis and there's tons of homes but no one's buying them.
Jimmy Starbuck: They introduced over here, they thought it would be a genius idea to tax Airbnb at like 10% of a levy or something. Well, no one was going to the Airbnb anyway because no one had any money to holiday. And all it's done is put, I'm talking thousands of houses back onto the market because they already charge like a land tax if you've got a second property and now they're charging a levy and taking 10% of the Airbnb, which is worth nothing anyway.
And like I said at the very beginning, I'm no economist. I'm not educated in this sort of stuff. You know, I've got opinions from being around smarter people than me and talking, but really, at the end of the day, I’ve got no idea what'll fix it. I just want to dig holes, you know, and I'm happy to dig a hole for a pool or I'm happy to help dig out a freeway. I'm just needing pools and freeways to be built and it seems like there's not enough.
Taylor White: The exact same up here. And what you mentioned that kind of made me like, oh my God, is, you know, like we have more five people in our office. I mean, you're saying you have 20 people in your office, your organization, like as you have kind of grown, how have you structured management? Kind of. What do you insist on doing yourself versus delegating?
Jimmy Starbuck: Poorly. I have structured it terribly and I've ran into a brick wall or set myself on fire every time I made a decision, which made, which then meant after I'd healed a little bit, I looked at it, went, “Oh, got to change that.” It was a poor decision. Started out with friends and family in the office coming to help rather than doing a job. Ended up with full time workers that were so invested in helping me and helping the company that I've, I've only got one of them left actually.
Yeah, one full time one left because, you know, like my best friend from 15 years. He ended up working for me for five years. Then he quit. We had a big argument, you know, my dad, he worked for me and we had a big argument. He quit business.
Taylor White: Got that.
Jimmy Starbuck: My brother worked for me. You know, it was with me. But you know, if we're calling a spade a spade, it was for me. And had, you know, multiple friends and everything else like that that have gone through it. How I structured it was at the very beginning out of necessity, you know, when you've got a thousand dockers to process. Eventually we needed a docket girl, full time data entry girl. We ended up for the last two years having two full time data entry girls. Just one of them turning paper dockets into PDFs and propping them. You know, she's an expert at cropping, you know, but you never think that that's going to be a job.
But when, when you're sitting there and you're drowning, what do you do? Like you just have to get someone and so that. But then after you've plugged all of the holes, you have to start to build the boat. You know, like once you've stopped the water leaking in, then you go, “Okay, well how am I going to build out this thing?” And then you start making some more strategic hires. And you know, you think you're a really great businessman, but from what I've learned a little bit more. If the economy's booming, like, and I'm talking proper booming, you've got a good name in the industry. Like, like you guys have, I know that you're the same, you have a good night.
People are calling, you know, their normal guy can't, can't do the job. Who's the next guy that they'll call? Tyler Bank. Tyler, will you come down? Can you help us out? We need an excavator, we need, we need all trucks, you know, whatever it is. And then all of a sudden you're sending them out and then you know, you get their work and like this. And so was it great business or was it an economy that is just shooting for the stars? And I was just a guy that was willing to take absolutely everything in the market. I don't know, maybe it's a combination of both a little bit, but people and hiring them and structuring and companies and everything else is some of the most difficult parts of business.
Taylor White: Yeah, I totally agree. And during that process of you hiring people and understanding like, okay, this is somebody's job just going to be cropping the exporting as a PDF like, was there a moment when you realized, okay, like, this thing is getting bigger than I expected, or I could scale this even more. This is going to. This is getting big.
Jimmy Starbuck: There's multiple times, like, when I turned over, you know, I think I turned over 50 grand in the first year. When I did a $2,000 day, I was like, I can remember I did a $10,000 day. I can tell you the street address where I was, what I was digging, the people I was working for. And I went home and I called my best friend and I'm like, “You would never believe it. Mate turned over $10,000 today.” And he's like, “Whoa, what do you mean?” And I'm like, “I just don't know how it happened. The tip was really close. I was charging the guy per load. We ended up doing 55 loads. $200 a load is. Is. Is 11,000 bucks. What the?” You know, like, “What's going on?”
So every step along the way was a myself moment, but also a really proud moment. But then I don't know what it is, but it's just this hunger to keep going, which a businessman has to have. You have to have that drive underneath you. And so then a 10 grand day turned into 100 grand. Weeks turned into 250. I think our best month is somewhere around about 10 million bucks. That's starting to be a lot of money and a lot of responsibility for people to work with and a lot of responsibility for all of the, you know, the structure has to be. And. And how do you go learn it? Like the MBAs and everything aren't really always applicable or the business degrees aren't really applicable sometimes to, you know, a construction company in Melbourne, Australia. And so it's been challenging. It's been super challenging.
I can actually remember my first $1000 day and I could take it to the address. I could tell you what I did. I could tell you, or I had tip fees, because that's how I probably got into the trucks. Because every big day that I ever had was around trucking. You know, you can only make so much money digging holes, but if you have to export out and then you line up as I've seen you line up, you know, when you've got the lineups and you're selling topsoil, and then all of a sudden you look at it and you go, “Oh, we had a good day.” You know, only one excavator, but 15 trucks or one loader and 15 trucks. So, yeah, I don't know. There are no firm answers.
Taylor White: Yeah, well, that's. Whatever, you know. And it relates back to the other question is you got to make sure that your systems are in place whenever you're trying to move at that scale. Right. Like, what I was hearing when you're talking is it. It just kind of got to this point. And. And honestly, that's how I feel as well, too. It's like from where we were when I took over from my father to now, people are like, “Oh, like, how did you do it?” It's like, when I think back on the question, I could say like, okay, well, I got people in the office to help. We needed more work, so we priced more work. So I needed an estimator. Then I guess we realized we needed a coordinator. Then we got a coordinator. Then he needed an operations manager. So then we got operations. Then we needed more excavators, so we bought excavators. So, like, there's no exact blueprint, but it just kind of happens.
Jimmy Starbuck: But it's also the same. So there is no blueprint. However, what you're saying is, is good business fundamentals that you say, where currently the boat has a hole in it here, like our estimated Like, I'm getting a guy calling me every week saying, “Where's the quote?” And you go, “Oh, I'll get it to you.” And then you're sitting at home at your dining room table while you should be watching, I don't know, Erin Brockovich with your wife. And then you go, and hang on. I've just got to quickly. Just quickly put together a quote for someone. Then you go, “Nah, I'd rather watch Erin Brockovich.” You know, we all like. It's a good movie. I'm going to hire someone to do this during the day.
And then he starts price of work. And you make a good hire, but then you win too much work, and you go, “Now I'm moving machines and organizing all of this at nighttime and on the weekends so that we can do all of this work. I don't want to organize all of that or I don't want to move the machines.” I'll employ another truck driver to move the stuff. Well, and then the balls just rolling down the hill like this. And it's a really great time. The problem that I've ran into in the last 18 months is when the ball isn't rolling down the hill quite as hard. Like, you know, I'm not. Definitely not doom and gloom, you know, like, we got a good company. I think that the. The industry in Victoria, which Is the state I'm from is still got a lot of life in it. It's still going to kick along. We've just, you know, everything goes like this. We're just down the bottom a little bit.
But when you go and down this way, it's a little bit harder to manage than it is going up this way. I think that they both have their own things that you got to do differently. Which from as far as we can see, we've picked up a huge amount of market share also in what we do. It's just that the rates are a little bit at the moment, you know, because as you mentioned before, guys going to work for free. Like, we can take for example, the trucks. Like a, a truck was up at, you know, well over $1,000 a day. Now it's down under a thousand dollars a day, you know, like just for the truck without a trailer, which is especially when you own a lot of trucks.
Taylor White: Yeah, that is wild. And it's funny when you run like this. And that's kind of how we feel as well too. The economy is like this, but also just construction in general. Right. Like our cash flow is like this. And I think for us, the biggest thing this year has been cash flow. And we had some. We had like this lull in summertime where we're like, we were just on a rad of commercial jobs all at once. And normally our residential helps kind of flow that. That need for cash. And you know, you get really tight and you get into these situations where it's like, okay, we gotta call this person and make this work. And I don't care how big or small you are, everybody deals with that, especially construction. How do you combat cash flow? What's some recommendations for cash flow?
Jimmy Starbuck: Cash is king. That's it. Cash is the blood in the veins of a business. Everything else matters after cash. But cash matters first. You, you aren't dynamic. If you have no money, you can't get new machines. If you got no money, you can't hire people. If you got no money, you won't take the risks if you got no money in the bank. And therefore make sure that that is forefront of your mind. Always send the invoices, call the people for your payments. You know, make sure money is discussed at all times. Because we're not doing this for the practice. I like watching motorbike racing. I'll stay at home and watch that all day if that's what I'm doing. For fun. Like digging holes is cool and all, but like motorbike racing's better.
Taylor White: Yeah, we're here to make money.
Jimmy Starbuck: Yeah, I'm here to make money. And in which case, why do some people get worried about talking about money or what I find even worse? Why do some people not send their invoices? I have come, like, I had a company, like a truck driver working for me. He worked for me for a month. He didn't invoice me once. We're calling him, saying, “Please invoice.” And he's like, “Yeah, yeah, yeah, I'll get around to it.” We ended up ringing him and said, “You must come into the office. You are not allowed to work today because it's bad for us, too.”
Taylor White: Yeah. All of a sudden you get hit with this big invoice. Okay, well, we weren't expecting that.
Jimmy Starbuck: Yeah. And if my team wasn't on top of it, then I'd be hammered. Because then all of a sudden, you've got a month's worth or six weeks worth of trucking. We said, “You can't work tomorrow. We're not allocating you tomorrow. We're going to bring you into the office. We're going to go through all of your invoices so that we can make sure that we can do it. I've got a girl who will help you make your invoices.”
Taylor White: That's funny. Yeah, dude. On my account has it in our head like. Like, I know I'm on it now. So you were mentioning family working for you and stuff. My. I had a family member that used to sit in this office. I didn't have an office. I was like, I'm the site guy. I'm going to do this and that. But my business, I didn't have a hold on. On it, and I didn't do my own invoicing. And our invoicing was like, 30 days after we finished the job, we would invoice. So I'm like, “No, now I'm 60 days till I'm getting paid. If we're net 30 payments, if we're net 60. Now the 120. Like, this is not good, guys. Like, we need to. Or no need now. I need to. We need to figure this out.” If I delivered, like, I'll get an email in another half an hour from my coordinator and I'll see all the stuff that we've done. If we delivered some loads or whatever. Whatever is invoiceable that ever left today, I'm invoicing it. I don't care if there's a progress payment on a little electrical trench on Invoicing it.
Jimmy Starbuck: We invoice absolutely everything for the month, in the month. So, so the, obviously the, you know, girls and guys who are doing it can this again. You know, some weeks are really busy, they'll invoice, you know, a bit. Other weeks they, you know, acquired or whatever it might be. But every invoice must be closed off and sent for the entire company by the end of the 30th or 31st, whatever the date is.
Now there is a standard thing that if, if the invoice is on the 31st, that includes the day of work too, which means all of the, you have 150 guys at work, 150 time slips have to come in, be processed, put on an invoice, put on a spreadsheet and sent. And if that means that it's midnight finish, guess what, it's a midnight finish. That's the expectation. And I think that a lot of companies struggle with that sort of stuff as well. The expectation is that though it's all finalized now, it runs like a Swiss watch, that thing. Everyone has been trained to send their dockets as soon as they finish it. The girls have the spreadsheet ready, everything is invoices prep, they're going home at 4:30 on the 31st. Invoicing sometimes, you know, big money on the last day and it's just like, and it's just a process.
But cash at all times is king. Everything that we talk about, machinery purchases, we're talking about cash jobs, cash employees, cash, you know, like it all leads back to trying to make money and then paying tax, of course, more cash.
Taylor White: Taxes are not fun. How do you go about understanding if you're leveraging yourself too much or not enough? Well, how do you go? I guess I always say it's at the end of the day, you know, you grabbed and grab your dolls. But like how do you go, okay, we're going to buy these excavators, you know, and, and, and we're going to take on this amount of debt. We're going to finance these things. Are you just buying stuff everywhere or.
Jimmy Starbuck: Tough question. I have ebbed and flowed between being up to here, like, take a big bite and chew, like. And I've been like, “Hey, I don't have enough, I don't have enough finance on equipment.” And then it comes a lot down to taxation. In Australia they give you really big tax breaks for financing and leasing equipment. So the interest is a deduction. So you're not paying on that. I shouldn't say that they give you big tax breaks for leasing equipment. I'm saying that if you pay it off over four years, it is in line with the tax breaks that they can give you on the equipment, the depreciation, because they'll allow you to write off a certain amount per year.
Taylor White: You can write off depreciation?
Jimmy Starbuck: Yes, same as here, the same as there, but. So if you dump 300k on a digger in one year, then you end up paying 150 on top of that in tax, because that's the tax rate. However, if you finance 300k on a machine, then over the four years it'll match up and you'll end up at zero. Oh, well, you'll end up balancing it out, the taxation versus what you're putting in. So. And that's, I think, important to understand, but to match up to your revenue, you know, we could probably. I'm not an accountant as well as an economist, so, you know, always make sure to get your own financial advice, because I am absolutely certain that different states in Canada do different stuff. America's different and Europe's different.
But you get good people around you. When have I been over leveraged multiple times. When have I been under leveraged multiple times? When have I had too much gear? Right now, I don't need the amount of gear that I got. It's not being utilized as much as it could be.
Taylor White: Do you start offloading stuff or some cash, like, looking ahead like, okay, you might run into a punch where we're going to, we could use some cash or, okay, things will pick up and I'm optimistic I'm going to keep the gear.
Jimmy Starbuck: Both you need to have some depth for cash. I was talking to Herb Sargent the other day and he talks about, I call it depth, he calls it altitude. You know, he's like, “You know, if you're flying at 30,000 ft in a business and you've got good bank account, lots of money, and then you drop a little bit, you're all good.” You know, drop from 30,000 ft to 20,000 ft, no problem. If you're flying at the tree line and you drop a little bit, you're in deep. So make sure you give yourself altitude. Make sure you've got depth. Like, I've gone over the years to the banks when I've been flying high and said, “Listen, I need money.” And they're like, “What do you need money for? You got plenty of money.” I'm like, “Well, when I need it, you're not going to give it to me. So what can you give me now that I don't need?”
Taylor White: That's actually a really good point, Jimmy. We have been in that scenario as well too, where you have money and the bank's calling you. Be like, “Hey, you guys should really, you know, keep your cash and run on an extended line of credit. You can help me get some wiggle room here.” But we've also been in the position where you have no cash and you need a line of credit.
Jimmy Starbuck: They're like, “Really like to see your.”
Taylor White: Receivables up a little bit higher, guys. I don't know about that. It's like, okay, so that actually right there is a great point. I've never heard someone say that. Very good point.
Jimmy Starbuck: When you need it, you'd rather be looking at it than looking for it, that's for sure. I could remember, I went, I got a loan for a job, we won a big job. And the payment terms were real, but, you know, big job, let's kill it. I think it was close to a million ton that we had to truck. I think it was like 700, 800,000 or something over a few years. And so I'm like, right, we gotta get this money in. I went to the bank, they gave me a big line of credit. And then it turns out that the job was a slow burn at the start. So we were only trucking sort of five to 10,000 a week. And then it was ramping up, you know, like this. And in which case I ended up getting the money in, being able to fund it.
Went back to the bank and I said, “Oh, I just want to downgrade that from this to this.” And they're like, “Well, you don't need it anymore because you're funding the job, we can see.” And I'm like, “Yeah, but if I do need it, I'm not going to have it then. So why don't we just leave it there?” You know, you can get some fairly cheap line items. I'm sure it's the same over there that if you haven't drawn down on them, only cost you, you know, a couple of grand a month to keep open, you know, and can sit there and in the back end and hopefully if a rainy day comes, then you know, you've. You got a bit of a nest egg to go and play with rather than selling the equipment at a rate. But in saying that, don't have a yard full of diggers either, because then that's stupid as well. Because even if it is, the right's the right. If a 20 ton excavator used to be worth 150 grand to sell and now it's 100. Guess what? It's not like if you hold onto it for three months, six months or 12 months, you're going to get that 50 back. May as well just offload it and try and use the money somewhere else.
Taylor White: It'd be a hard pill to swallow though, you know, especially I think a lot of people have pride or ego getting away, being in these tough times and going, oh, I don't want people to know I got to sell off my machinery in order to make it work.
Jimmy Starbuck: I've got an ego thing as well. I could give a perfect example. One of my builders, really great build up, bought a Posi-Track for a job and he used it and then he couldn't sell it. This was only 12 months ago, you know, couldn't sell it for the money. After a while he rings me up and he goes, “Jimmy, like, I'll give you all of my work, buddy. Like, come on, buy it.” I'm like, “Hell yeah, I've got you. I'll buy that, no problem.” You know, like, I use positrax. Not really. Like, well, I find Posi-Tracks are better off to get an owner operator than to put my own guys in it because the rates, when the rates were good, it was okay. But when the rates drop, you know, positracks need a lot of maintenance. Yeah. And you might be better to sub in than you are to own your own one. Put the fuel in it, put the guy in it and maintain it.
But. Well, I reckon that I overpaid for that bloody thing. 20 grand now sat in my yard doing absolutely nothing for a while. But at the moment I was like puffed in my chest. Oh yeah, no problem. I got you. Ego is a funny thing in business. You know, you need a bit of it. We've obviously got enough of it to film ourselves and record ourselves to put on a podcast, you know, like, there has to be a bit of ego there, but you want to have the right sort because otherwise you'll end up with a positrack in your yard. You can't sell piece of.
Taylor White: So as you grow, Jimmy. And you know, I think a lot of talk about culture happened, you know, two, three, four years ago and Instagram fair going off. People were like, oh, make a content videos and be able to reach people. And, and, and you know, it is something that is very important. How do you find that culture and construction specifically online? Cause I, I like getting People's perspectives about like social media and construction on about online that do it. So like, how have you found that the culture of construction online has shifted from like four or five years ago to now? And is it good or bad?
Jimmy Starbuck: Very good question. You're a great interviewer, Good looking guy, Great interviewer, you know.
Taylor White: Well, I am.
Jimmy Starbuck: I think that it's a lot more fog now. I think that there's a lot of content put out online that is very fake. But you know, like at the same time it's hard to make real content. You know, like I sit in front of for a camera for an hour and I can sound like, you know, you start putting snippets of information in, it sounds like I'm killing it. Guys come up to me and they go, “Jimmy, your business amazing.” I was driving down the road today, saw 15 of your trucks. And I go, “Yeah, but like it rained last week and half of my guys were in the yard washing equipment,” you know, like it's not as glamorous as it sounds, but now with all of this really high quality job site content that people are putting out, you know, which you're probably one of the more pioneering ones as well. You know, you guys were really early adopters of, you know, some real, real hot, high quality content and edits and now it's everywhere and you cannot differentiate yourself at all.
Taylor White: I know. And that that's what I struggle with right now. James, that's why I asked a question, right? Cause this is stuff that I think about all the time. I think the same as you. I think that there's a lot of guys that try to single themselves out as construction influencers and I think they do it with ill intent. “Buy my program, sign up for my program, do this and I'll teach you that, or do this,” and it's like, “Don't know if I believe in that.” Second thing is how do I stand out now on social media? You know, and, and, and that's not me being like, “Boohoo, how do I stand out?” But it's like, okay, everyone caught up to what we were doing.
Jimmy Starbuck: What's the next thing?
Taylor White: How do we, how do we go to that next thing? What is it? Do I share more about my journey in my life buying a different business or this? But it's like, well, that doesn't really pertain to just Kenwood Construction. And then now I don't want to overshare my clients. My clients don't want to be on camera. These sitting in a boardroom talking about Spending millions of dollars with them. They don't want to be on camera with that. Right. There's privacy there. So I struggle with what's next.
Jimmy Starbuck: So I probably was earlier than you, let's say.
Taylor White: Oh yeah, you were.
Jimmy Starbuck: And I started posting up a lot of pictures of diggers. And I remember when stories came out, people are sharing my stories. I was one of the few people that were putting up pictures and stories of diggers. That's where most of my following came from. And then my content wasn't as high quality as a lot of the stuff coming out. And I'd like died in the ass, sort of 40, 45,000 followers. I sat there for like four years.
Taylor White: Then they shifted and went somewhere else.
Jimmy Starbuck: They shifted, went somewhere else. Probably onto your, you know, channel or whatever it is. But then lately, lately I've, I've seen a fairly decent uptick in what I'm doing now, which is like a whole different sort of thing. However, I do sometimes feel like a bit of a fraud still. You know, I've got a background. I've been doing this almost 20 years. Know I've moved tens of millions of meters. Tens. Like I've probably closer to 100 million meters that we've moved. And I still sometimes sit here and think to myself, “Oh, you know, I don't know, like, I'm not an accountant, I'm not an economist.”
But then you have a guy who ran a business for like three minutes, you know, who did two jobs and he's like, “Anyway,” and starts putting himself on camera and saying, “We're going to do this,” and it's a lot. And I think that one of the ways to differentiate yourself at the moment is authentic content putting out what you do, I think. But, but we've also killed like introducing the people of Starbucks. Like I did that for close to a year. You know, every week I put out a different face of Starbucks. I remember one of the girls got really upset because she got like 20 likes and 15, 15 of them were people who work next to her. And she got really upset. And you go like, “No one wants that anymore. No one wants to meet the people at Starbucks. No one wants to, you know, oh great, you dug a hole and you filmed it with a DGI or whatever,” you know. Mavic 2 there's nothing that you can do that sets it apart, the editing side of things a little bit. You can still have some real high quality videos that you look at and go, that's sick.
Taylor White: Oh 100%.
Jimmy Starbuck: But they don't get the engagement anywhere near as much anymore.
Taylor White: It's not as impressive like it. There's just. There's so much of it, too. And, like, there's a new style of editing that is really popular right now. Right. It's like, with after effects and stuff, like pops in and doom pop. The sound effects to it, the crunch, the move, the this and it, and. And it's amazing.
Jimmy Starbuck: I feel like I got epilepsy, though, sometimes when I'm watching it, because it's going like this in your face.
Taylor White: And I think the tough thing is. Like, when I first started, I started doing it because I was like, “I want to show. I want to make it cool. This is different. No one else is doing this. No one's else making remixes or edits to this.” But now it's like, “Hey, now, how do I still. How do we post stuff and provide value to our business, to the people that work here, to the people that are watching?”
Jimmy Starbuck: I went through this same thing, but the problem is that the only person who can do it is you, the guy in the camo hat. Because no one else, they. No one. They don't care about talking to anyone else. I don't want to hear advice from anyone else. They want to hear it from you and you alone, which is like this personal branding thing that went off. But I've gotten maybe like three or four thousand followers in three or four months on Instagram. I've gotten 10,000 or 12,000 followers in a year on LinkedIn.
Taylor White: Wow.
Jimmy Starbuck: Yeah, I'm up to 17 and a half thousand followers or something on LinkedIn now, and I only started it two years ago. Hey, but people just want real authentic stories, a little bit of advice maybe thrown in. But then I was talking to someone yesterday, and he's like, “Oh, you know, I offer a mentorship program.” And I'm like, “Oh, yeah, that's really cool.” He's like, “You should come on and do it.” And I'm like, “I think I have enough advice to offer someone to mentor him.” And he's like, “No, you do.” And I'm like, “Yeah, but I'd feel really bad if he went to shit also.”
Taylor White: Yeah.
Jimmy Starbuck: You know, but then you have all of these clubs and, you know, like, we have them in Australia. I'm sure you have the same these business clubs that invite you down and want you to come join them for, I don't know, 10 grand a year, where you go down and sit. And I can remember one invited me to come along, and I went and sat and listened To a girl, tell me, tell everyone how social media is great and how to use it. And she had like. And I'm not judging anyone. She had like 5,000 followers and I had like 40,000 followers.
And I'm sitting down and listening to her and say, like, I don't know about social media and how to get there. Yeah, I'm post like, you. You liked it. Making your job sites look cool, great edits. You like your machines black, you know, pimped out, and you take photos of them. I like diggers, so I took photos of it. This girl's reckoning that looking like she's got the whole world figured out and she's only got 5,000 followers. I wouldn't stand up there and tell people how to use it. And I think that that's what. Maybe because I struggle with the same thing, you know, the. The fraud, the fraudulent sort of stuff that put out there by the business coaches. It's a lot. I could get into it, but I.
Taylor White: Know I could, too. And I think there's a part of me, too, that when I talk about it, I go, I guess the more liberal mind in me would go, they have a right to their own, too. And if they want to go online and do that, then that's all good. But my other mind, I have my own thoughts. And I go, you know what? That's what you do. Yeah, exactly. Yeah. Like, you don't have it figured out.
Jimmy Starbuck: But in saying that people could listen to me and go, “100 guys, shut up. You know what? 100 guys is a piece of piss.” You know, like, there's guys out there. I remember I ran into some guys when I was over there, and they're like, “Oh, I've run a company of 750 people.” And you go, “Whoa, man, that's. You know, we run. We build freeways, and we have our own ash asphalt plants. And then the asphalt plants are fed by our own quarries, and then we import our own, you know, emulsion solution on tankers.” And you go, “Yeah, no, I've dug a big hole once or twice, and I, you know, I lined up 20 trucks and thought it was cool.”
So it's just all this, I don't know, maybe a little bit of that ego coming out if me and you are willing to sit in front of a camera and talk about it. But it's also, I find that the content has to be relatable as well. It's. No, it's some of the stuff that's put online, you know, of the Biggest mining contracts in the world. It's cool to watch. Yeah, but like, it's on Discovery Channel. Like that, that. That's as relevant as it is to me. You know, it's Mike Rowe going somewhere and, you know, you get to watch it. It's awesome. It's cool. But that's not really the content that when I was, you know, early on in my business, I was wanting to engage with. I was wanting to engage. When I had one machine, I wanted to see how a guy got the 5. When I was at 5 machines, I wanted to see how he got to 20 and the problems that he went through. And he's my. Are my problems normal or are my problems just specific Starbucks problems? And in which case I'm in deep.
Taylor White: It's funny, especially when you talk to guys with, like, guys and girls with larger businesses. I had a guy on the podcast that has 1300 employees here. And I mean, crazy. And you know what? I think it's funny as I think back on the conversation again, like the binoculars, whatever way you want to look at them, I'm not good with them either is he looked at stuff from a different lens, you know, and. And he talked the main podcast about acquiring companies. Right. And I always often think and is okay, like, maybe that's how you scale and that should be the strategy is acquiring companies. Because it was just interesting. It's the main focus of the conversation was, “Oh, we're going to acquire this. Oh, we acquired this in 1985. Oh, we acquired that 1995.”
Jimmy Starbuck: How do you get. How do you go about acquiring? Like, you know, what do you do? Go to business directory and then go there, walk in and go, “Knock, knock, knock. Hello. You know, I want to buy your company with 30 people and I don't want to get ripped off for it,” and all of this stuff. However, in saying that my mate just started out an electrical company and he ended up selling. He got acquired, I suppose, and so it does exist.
But I also find that it's a really good point you make about looking through the lens, you know, like the procedures and policies and how you run your company when you've got five guys on the ground has to be different than 30 guys, the five guys on the ground. And if you're on site with them, you barely even need them to have a timesheet because you know what time Tom left? He left to go pick up his kids and Dave stayed late because tomorrow he has to duck out to go get a doctor's appointment. But you barely need A timesheet because you're there with them and you trust them a whole lot more because of that interaction that you have daily. And it's quite seamless and easy to run when you end up scaling well beyond that. Like you rock up and you don't even know guys who are on site or. I stopped going to the job sites as much because I didn't understand what was happening or what we were doing.
You know, I would see, see the address come through, the estimators would do it. The paper, the allocations or scheduling team would do it. Then I, you know, I didn't know who the client was. And I'm going in and saying, “Hey, I'm Jimmy Starbuck.” And I'm like, “Go do this, because that makes sense.” And they're like, “No, that don't make sense because this is that and that is this.” And then I started, you know, crumbling the foundation, you know, like because of my own need to try and go to a site and make money. But in actual fact, the process makes money then.
But if I put that process on top of five guys, I would have lost a heap because those guys work with me, you know, like that's what they were working for. We're tight knit crew and we, you know, we couldn't do 20 basements at once, but gosh, we killed one or two of them at a time. You know, we never failed a compaction test on a car park and there was never a grade that was wrong. Now we could do 15 car parks, but we do, we do rework. Why? Because you, you make a standardized process that fits 90% of the time. But then there's always those things that you have to manage.
Taylor White: That's a great point, Jimmy. I love it. That was the hindrance of our business. I thought that I was helping by being on site. I thought that I was helping by being a psych guy or going to site, talking to the guys, doing this, doing that, running a machine if I needed to be in that guy. But we never had rework.
Jimmy Starbuck: Killing it when you ran. It ran and running at the best.
Taylor White: Exactly. But, but you know what? I actually, I had a podcast with Trent Harris from Blue Collar Contractors and he said it and it made a lot of sense to me. He goes, “But if I hire somebody and they can do my job 80% as good as I think that I can do it, I'm winning.” And I'm like, “You know what, that's perfect because again, we talked about ego.” I think that I can run our screening plant. The Best. I think that I can run our job site. The best. Hey, that's just how I think.
Jimmy Starbuck: I used to be able to load trucks. The best.
Taylor White: Exactly. Most efficient loader. But if I could find people that are 85 and like you said, 90% more, you know, efficient, and I can focus on other stuff, the processes, how stuff should happen, the future, the growth, looking outward rather than inward of the business. Honestly, man, we started making, we started our margin starting to increase and our revenue started to increase and I'm like, holy, wow. I'm working like, this is good. I was actually hurting my business by thinking I was helping it.
Jimmy Starbuck: But then you still go back and do the same thing again and again. So maybe it was you were the operator, the best operator. And then you get out of the machine, but then you're the best guy running the job site. But then you're the best guy to do this and do this and I'll build you. Building up you. You end up being the restriction. Now what's really challenging is, is then when you start moving into the next phase of growth, you actually have restrictions that aren't you, that are your employees, they need to grow with you.
You know, like I have a manager of an entire company of mine who started out as one of those data girls. I think you've met her at CONEXPO, the one with the big hair. She started out as a data girl and now manages tens and tens of millions of dollars. The growth that she's had to go through as well, she has gone through the same process because she was the best at doing data. That's the reason why she made it out of data because she started understanding so much about the trucks and talking to them and stuff that she started working into scheduling. Then she was the best scheduler and started to work out to be an operations manager because it just made sense then. Operations manager work into the, you know, an entire company. You know, each layer on the way up, think about the constriction of her and how that's moved and, and how I've had to look at myself to try and help train her. And she's actually helped train me as well. You know, like she's given just as much training and help to me as what I've given to her.
But it's such a difficult thing, the growth and scale of a company and construction and I think far more than some other industries because, you know, I can remember there's a vitamin company that sold in Australia for some obscene amount of money and their Profit margin was 40%. 40% exist. Whenever, like, if it does exist, I'm going home and like throwing it in the air and lying on my bed naked in it, you know, it just doesn't exist. But that does exist in development. That does exist in a software that exists now. You know, I'm not saying that all companies make that, but I'm saying scaling is easier when, you know, the profitability is really high. They have lower revenue than us though, so that probably helps in our, you know, sort of field. But profitability is high and the willingness for investment is also high.
We just spoke. It's hard to go to the bank, let alone get. You ever heard of angel investing in construction? Some go, you know, like them coming down and going to give you $10 million to help you scale, you know, for 20%. Not quite as much, you know, as what it does if you own an app.
Taylor White: Oh yeah, that doesn't happen. I've never heard of someone wanting to be a silent investor or an angel investor in construction, be like, “Here's your 10 million. Well, why is it all gone already? It's been a month.”
Jimmy Starbuck: I had a 320 day, that's now a three. Two, three.
Taylor White: Yeah, exactly, yeah. It doesn't take long to spend money.
Jimmy Starbuck: Or like you, you've seen a guy on Shark Tank, you know, stand there and say “I build roads.” And then they're like, “Oh my God, yes, what a great idea. You build roads.” And then they're like, “Oh, what I'll do is I'll offer you 4 million for 6%.” Then the guy's like, “Great. I bought a roller paver and I employed three guys, but that job went to shit. We lost a million too.” You know, what makes some of the challenges is also what makes it such a great industry, you know, and the people that are in it is what makes it just pretty amazing to be part of, you know, really loyal, hard working people that if, you know, I've rocked up on site and, you know, they'd give me the shirt off of their back, some of these guys. And in fact they probably have when it.
I've actually got a bit of a story about it. A guy who's worked for me for a long time is coming up to like 17, 18 years now. He was lying underneath the truck fixing it in the mud and I'm like, “Mate, what are you doing?” So ran over, I got a big, you know, sheet, I think it was rubber, like a real nice thin sheet of rubber. And I said, “Oi, Rob, come On, come on, I'll give you this sheet of rubber.” And he slid it underneath there and then he put my tools on top of it and said, “Thanks so much.” I'm like, “What are you doing? Like it's for you.” And he's like, “Yeah, but your tools. He's like, ‘We don't want to have to buy new ones.’ He's like, ‘Been raining a lot this month.’” And you go, “I think anyone's like that in it.” Like this guy like looking at me and it's just like it wasn't even a thought process for him. It was just instinct that, you know, the company, I'm going to put the tools on the rubber so that it's that.
And it's humbling to have those sorts of guys and girls who work for me that, you know, they love Starbucks more than I do. Some days those girls who send those invoices that used to be at midnight, you know, can't go home until it's easy for me to say and I'll pick up pizza when I leave at 6:00 p.m. or like you pick up a hamburger on the way home. I've had emails come through at midnight and a lot of them saying, you know, this is our end of month, which is another problem altogether. You know, guys, they actually stop accepting our invoices after close of business. They said we had to accept input them by the close of business.
So we changed it and we said, okay, we'll invoice you the entire month the day before and then we'll amend it on the last day so that it's all already done. We've sent it and we'll amend it on the last day if we can get it in by the close of business. Which really means the site guys finish 3:30 if they're not doing OT, which we sort of had to, you know, corral in on the last day because the dockets would take too long, you know, or pre-write the dockets, but then they start, then they came back. And I can remember one builder came to me with big claim, few hundred thousand bucks and he said to me, oh, oh no, you can't submit two claims in one month. That now pushes your claim into the second month. And because it was an amended version, that means that the first one's null and void. The second one, you entered two claims in the month. So we're going to pay you 30 days like the next 30 day payment.
Taylor White: That's wild.
Jimmy Starbuck: And I can guarantee you that that happens in Canada as well in America, in Europe, that sort of behavior, you know, where people are paying or knocking back claims. I've had a mate whose claim was knocked back because it wasn't in the right format and it didn't have the. The address or something ridiculous listed on it. But all of the information, they knew exactly where it was coming from. And I think that that's where, you know, for all of the positives of the industry, there's some negative parts that need to be discussed as well and dealt with, which is, you know, payments. Payments are real hard and-
Taylor White: Yeah. Tell you to cash flow. Right.
Jimmy Starbuck: And why is the cash flow so difficult? Well, because we don't sell coffees that we get paid $5 when we pick one up. You know, like, imagine if you got paid at the end of every single day.
Taylor White: That would be wild.
Jimmy Starbuck: Would it be great? Right.
Taylor White: That would be something to dream about. But unfortunately that doesn't happen. But I think that's what makes the industry so, so crazy. You know, it's. Yeah, I think that like you said, this industry is awesome. The people in it are like far enough. You know, I'd like to try to find another industry that has the people. People like this in it and the people that we will see. And I'm going to see you too soon at CONEXPO, right. In March. You. You looking forward to that?
Jimmy Starbuck: I think that the CONEXPO is one of the best events that you can go to.
Taylor White: The best. Not one up. The best.
Jimmy Starbuck: Well, it's a long way for Australian, but I think that it is definitely worth the journey. It. It brings you into something. It's not just about the machines, but, you know, the machines are incredibly important. The people that you can meet, the networking that you can do. The fact that when you go there as a. As a business owner, that you can be part of society, let's say, of other business owners who are dealing with the same stuff, the same challenges and talk about that over a beer next to the Strip. That's a. That's some pretty cool moments there. And then of course, we all like Tonka Toys as well, so in which case then you get to see them during the day, which is also pretty cool.
Taylor White: Yeah, it's a fun haven for everybody. Construction. Yeah, I'm super pumped. I'm super pumped to see you there in March and I know that we got some cool stuff planned and I'm really looking forward to it.
Jimmy Starbuck: I'm going to be a busy beaver. I'm sure you are going to be a busy beaver as well. You know, I'm going to be doing some talks and, you know, and some meetups and then also going to put on it. For the last two times, I've actually organized some drinks for Australians and New Zealanders. Last time I had like 50 people come down.
Taylor White: Wow.
Jimmy Starbuck: Don't get me wrong, I don't pay for the drinks.
Taylor White: I was going to say, do you buy the drinks?
Jimmy Starbuck: No, you can buy your own drinks.
Taylor White: You heard it here first. Jimmy's buying your drinks. If you go there for 50 people. Okay, Jimmy, I'm gonna rock. I gotta get that double quarter pounder for my wife. For me, not my wife. My wife's probably at home eating something else. Actually, she. Bro, she likes a McDonald's burger every now and then. There's nothing wrong with that.
Jimmy Starbuck: You should get her one on the way home.
Taylor White: I should do that. Thank you for cutting out time. I appreciate it. Dude. It's always a good chat with you and I'm super pumped again. We'll see you in March at CONEXPO. And let's rock.
Jimmy Starbuck: I absolutely can't wait. Everyone should buy their tickets right now.
Taylor White: Buy it now. Appreciate it. Thank you, Jimmy. Catch everybody on the next one.
