From Variance Myths To Profitable Builds

Profit leaks don’t roar; they whisper. We’re pulling back the curtain on where margins actually disappear in residential construction—and how to shut those doors for good. From the dangerous comfort of “variance” lines to the myth of schedule float, we challenge the habits that quietly spend your profit before it’s earned. We share a practical framework for monthly lookbacks, daily logs that explain slippage by cause, and a clear stance: you cannot make up lost time tomorrow, and you shouldn’t budget to miss today.

Price increases are here to stay, but they don’t have to steamroll your jobs in flight. We talk through negotiating windows for new POs, building vendor partnerships that share the burden, and explaining markups without apology. That $5,000 toilet? It’s logistics, warranty, risk transfer, and customer care—not just porcelain. We also dig into a powerful tactic leaders overlook: set a dollar threshold for escalation so detail-focused managers hunt needles, not hay. Small leaks still get fixed through smart delegation, while top talent focuses on five-figure deltas that move the P&L.

Culture is the amplifier. “This is how we’ve always done it” corrodes margins; documented process and cross-training protect them. We walk through turning institutional knowledge into repeatable workflows, rewarding knowledge-sharing, and embracing software and AI to pressure-test budgets, estimate faster, and surface risk early. Finally, we spotlight the silent tax of carrying costs: every day of delay has a measurable price. Tie your margin target to disciplined schedules, track exceptions with evidence, and convert findings into process upgrades. If you’re ready to stop the quiet erosion and build profit on purpose, this conversation gives you the mindset, tools, and language to get there. Subscribe, share with your team, and leave a review with the biggest leak you plan to fix next.

Chapters

• 0:00 Kicking Off And Weather Banter
• 0:49 Monthly Reviews And Margin Erosion
• 2:08 Should You Budget For Variance
• 3:40 Schedule Float And The Myth Of Make-Up Days
• 6:30 Price Increases And Who Eats Them
• 11:20 Markups, Warranty, And Selling The Experience
• 15:56 Small Misses Add Up And Delegation Thresholds
• 21:12 Culture Fit, Alignment, And Process
• 24:28 Scarcity Mindset, Software, And AI In Building
• 28:00 Carrying Costs, Scheduling, And Real Profit Drivers

Transcript

Josh McMahon: 0:02

Oh. I love that. I love that.

Carolyn McMahon: 0:05

Hey y'all. Welcome back to another episode of Feed Me Your Construction Content. I'm Carolyn McMahon.

Josh McMahon: 0:10

And I'm Josh McMahon. Good to be back.

Carolyn McMahon: 0:12

Josh Josh. Josh.

Josh McMahon: 0:14

That's my real name.

Carolyn McMahon: 0:16

Okay.

Josh McMahon: 0:16

I mean my name is Joshua, but I go by Josh. My friends call me Josh.

Carolyn McMahon: 0:20

Yeah.

Josh McMahon: 0:21

People who don't know me very well call me Joshua. Especially when they don't ask what I prefer.

Carolyn McMahon: 0:28

Okay. So with that, we are back.

Josh McMahon: 0:33

And it is an icy mess in Richmond, Virginia, where we are recording this.

Carolyn McMahon: 0:38

However, we didn't get pummeled like North Carolina.

Josh McMahon: 0:41

Yeah, North Carolina got it a week after we got it. So uh congratulations, NC.

Carolyn McMahon: 0:46

Join the club.

Josh McMahon: 0:47

Yes, join the club. Look, here's what we want to talk about because we've just now closed the month of January. This is a great time to look back on your month and see how did you perform, right? We look at our annual goals and we say this is what we want to accomplish. This is our revenue, this is our margin, this is our uh net profit, et cetera, et cetera. Well, at the end of each month, you should be looking at some of those things. And this is a discussion that Carol and I talked about recently that we got very passionate about was just uh margin erosion and and what areas does the business what do they worry about? What do they what do they care about?

Carolyn McMahon: 1:21

Well, right. So, you know, you're running a business. What are the things that, you know, can either creep up that um affect your margin, things that you know about ahead of time, things you didn't plan on. I mean, listen, I mean, some some builders do factor in a variance, right, in a build. Um, it's kind of the the oh shit bucket that's a very important thing.

Josh McMahon: 1:45

We should not be factoring in a variance. No, okay. But the there's I think we we imagine there will be some variance, and as long as we're within X points of variance, then then we've we've done our job well. But we you should never plan for a variance. No. No, because you should be you should be planning to do exactly what you set out to do. If you plan for a variance, then you're gonna hit the variance.

Carolyn McMahon: 2:12

Okay, so okay, let's talk about that. Because if you are selling it at X and there's a certain amount of, you know, cost to goods sold, XYZ carrying costs, realtors, sales agents, commissions, things like that, why wouldn't you put in because you plan every one of those buckets out, right?

Josh McMahon: 2:34

You've got a cost code for each line item in your budget.

Carolyn McMahon: 2:37

I'll bet you there's a cost code for that.

Josh McMahon: 2:40

It wouldn't surprise me, but I'm I'm just saying that I don't think my personal and professional opinions, I don't think that's the right way to do it. I think anything you focus on, you'll hit. So if you put a line item for variants in your budgets, you're going to hit that budget number. Whereas if you changed your way of thinking and you said, we don't want any variants, pre-construction, estimating, purchasing, design, sales, etc. etc. etc., hit your numbers. Give me real data. Let's let's really go after this and make it the way it needs to be. And then the field, make sure we're building on time. So these, you know, oh, we lost a day, no problem, we'll make it up tomorrow. No, you won't. You won't make it up tomorrow. It doesn't exist. Like we've lost a week due to weather, it's gone. You don't magically wake it, make it up because your schedule is designed for building it in the sky. Everything's perfect, no issues.

Carolyn McMahon: 3:33

So you okay, so then you don't even uh put any type of fluff in your schedule. No? Okay.

Josh McMahon: 3:40

No, you should not put float in your schedule. And I know there's several people who were probably disagreeing with me and say, You got to put a week's worth of time uh float in the schedule. I said, that's great. When you do that, you will lose that week every single build. You're better to say it will take me uh 180 days to build this house, and then something go wrong and it takes you 190 and have uh daily logs to say, oh yeah, we had two days of weather, we have this trade didn't show up. Have your reasoning why it took you the extra time to build the house.

Carolyn McMahon: 4:12

Okay, so I I feel like you could still do that with some sort of under not understood, and it's not what I'm trying to say. Yes, we need some margin, just like we bake in a number to pay a sales in like a realtor. And heck yeah, if that buyer doesn't have a realtor, whoo, we just made some of our margin back. I don't think we focused on trying to pay a realtor, but we put it in there as a potential.

Josh McMahon: 4:39

You well, because you you have to assume you're gonna need a realtor to sell the house or the client is going to come to the to the door to the um sale with a realtor. I mean, that's that's how our product gets sold, right? So some of us have internal salespeople, but still the buyers come with an agent. If you don't assume they're gonna come with an agent, it's gonna cost you 17,000 to 35,000, depending on the sales price. That that I think is different because we assume they're going to have an agent. If they don't, great.

Carolyn McMahon: 5:10

So you're saying that you you don't assume there will be any variance.

Josh McMahon: 5:15

No. No, I I don't want to assume there's a variance because the moment I'm assuming there's a variance, I think that your your teams will take their their focus off of I hate the word perfection, but making it as right as they possibly can. Because they'll say, Oh, we got a buffer.

Carolyn McMahon: 5:33

Well, just don't tell them.

Josh McMahon: 5:36

Okay, so so what you're saying is the the leadership might have a variance in their mind, but the leadership will never share that with the individuals in the in the field or the troops doing the the work. Because the moment I share it with you, you'll use it.

Carolyn McMahon: 5:54

Okay, so you're saying that maybe maybe we should, but just don't overshare.

Josh McMahon: 5:58

I'm saying that you won't know.

Carolyn McMahon: 6:01

I mean, listen, I I don't imagine my employer has set aside a a Carolyn and team screwed up bucket.

Josh McMahon: 6:11

No, uh well, you no, probably not. I mean, I think at that level that you know, you know, we're we're looking at that data and we're factoring that kind of stuff in.

Carolyn McMahon: 6:21

Right, and I am on the management team, so I would know.

Josh McMahon: 6:25

Maybe I think there's different levels of that management team, though. Maybe the president and and the ownership is looking at that side of it. And I and I really I really think it's all about keeping your focus on Carolyn, uh, you're the design manager. How do we increase revenue or profit by 2%?

Carolyn McMahon: 6:47

I'll know next week, managers meeting. Where it all rests on design. The profit center.

Josh McMahon: 6:57

Well, because it's it's a big picture thing, right? And and we're a little off track. But if as a company we want to improve our margin by X points, I'm gonna go to design and say, hey, how can we improve our margin by X? I'm gonna go to sale and say, hey, how can we improve our margin by Y? And then I'm gonna go to the construction team or purchasing team or and or and say the same exact thing. So I'm going to each individual team, giving them the same challenge to try and get to that global goal that I've set for the company.

Carolyn McMahon: 7:26

Okay, well, so you know, we're talking about variance, it's the beginning of the year, and what happens to builders at the beginning of the year?

Josh McMahon: 7:35

Stupid price increases.

Carolyn McMahon: 7:37

Price increases, and I don't know why this pisses me off so bad. I I mean, listen, I understand about price increases, but you know, like for us and um I mean both of our businesses, we are buying from someone else. And they likely are buying from someone else, whether it's you know, it's a trade, supplier, whatever. And what I found is that the person selling it to the trade never, I don't say never, never, if there's a price increase, they don't eat it, most likely. They just tell you the price increase and you're expected to pay it. That person who sells it to the subtrade is also going to give you a price increase. And they don't eat it either. So who eats it?

Josh McMahon: 8:25

Well, the builder ultimately, right? So then the builder either eats it or they pass it on to the consumer. So I think you you have to anticipate some price increases, or you have to keep your pulse on the market and and kind of have a high-level view of where you are.

Carolyn McMahon: 8:42

Are you saying that we we should pad for a price increase? Because it sounds like you're padding for variance.

Josh McMahon: 8:48

I'm not saying you should pad for it. I'm saying you you should be strategic and forward thinking and saying, or you say, no problem, I'll accept this price increase after these these purchase orders have have been exhausted. Um I can't let you go back and hit me with a price increase for these projects.

Carolyn McMahon: 9:07

And it's so funny because we we often try that and it never works out.

Josh McMahon: 9:14

Sometimes, sometimes it doesn't work out. I mean, I got a price increase this week from from a vendor, and all the jobs in flight that they've quoted, no, no price increase.

Carolyn McMahon: 9:24

And I think that was that was extremely fair because these jobs may not you know be going out of the door for for months. And I'll tell you, a PO does not protect you from a price increase. It's like, oh, well, you know, you get all of my POs. Well, that's great because again, that person's probably ordering from someone else. Yeah. What are they gonna? They're gonna then order all of it and then hold the material. And that's that's where it gets a little tricky. I mean, we um, you know, several vendors, I mean, they give you multiple price increases in a year. I mean, it's it's non-stop. And it it's just it's nuts because you know, you can't really plan for that, or just as detrimental as a vendor that says, man, you know, well, I've been holding my price increase. I haven't given you a price increase in 10 years. It's like, well, you are really a shitty business owner because shame on you. I mean, as the person um getting the information, I mean, can you imagine getting notice of a price increase? And they're like, Well, I haven't given you a price increase in in 10 years, and I'm gonna give it to you all right now. What would you say?

Josh McMahon: 10:35

Well, I I do think that's that's a bad way of doing business. Like the that business owner would say, Well, we were doing it to protect your business. No, in in reality, you weren't doing it to protect my business. You didn't know. You weren't paying attention to your margins or your numbers, you were paying attention to the total revenue, and you weren't understanding why the heck are we not making any money at the end of the day? And that's that's a failure on your part, which is why I'm I'm pro hiring a business coach to help you with some of that stuff. Because those are expensive lessons. Because so what happens is you do that, you the vendor, 10 years, no increases. Now all of a sudden, boom, we're gonna hit you with a 10-year price increase. The bill is gonna go shop around and look for other options. So you might have been the great solution for them, but that type of price increase might be outside of the window of their reality.

Carolyn McMahon: 11:28

Well, right. And and and I imagine in their minds, they're like, well, that's why I didn't give you a price increase because I uh, you know, I I didn't want you to shop, but but everyone else has been giving price increases, and everyone has been adjusting, you know, to market. Um, some are more you know partner-based, and you know, maybe it's a 4% price increase, and you know, maybe they can absorb, you know, a couple points of of that price increase. Maybe we can too. I mean, it's just nuts. Um, you know, the layers of margin we talk about margin opportunity, but everybody's expecting to buy it at a certain amount, turn it over to you, and then you have to then put your margin on it to make the company a certain amount. I mean, heck, we um, I mean, just the other day I was pricing a very fancy toilet for a buyer. Um, and we go through our plumber. Our, you know, our plumber provides everything. Well, this plumber didn't get any type of preferred pricing from this um for this item.

SPEAKER_01: 12:37

Yep.

Carolyn McMahon: 12:37

And they put their markup on it. We know what their markup is, they're they're very vocal about that. So let's just say it was a uh$4,000 item. It came back to me at$5,200, and then I have to put my markup on it, right? Because that's my job, that's how I keep my job.

Josh McMahon: 12:58

That's how that's how the builder stays in business, and everybody should understand that every business has to make money, or you're gonna go out of business and you can't warranty the product, and then you're in trouble.

Carolyn McMahon: 13:08

Right. So it's you know, of course, it just you know solidifies um our minds that we need to buy direct. But it it's just tough because the builder is always put in this position and we always have to justify our pricing, right, to the end user. Well, why is it so expensive? And it's like, well, you know, at the end of the day, I have to put a markup on this. I have to warranty it. I have to install it. There's a guy in the field that's got to manage and oversee it. Um, you know, all of these things that kind of roll into this number. And, you know, and and we we get a lot of flack for being this, you know, big builder. We make all kinds of money, you know. Well, sure. You're welcome. Thank you. That's what we're supposed to do because we can't afford to warrant any of that stuff uh after close. We can't afford the people if we don't make money. We can't afford the building that we're in and the health insurance that we pay and all of these things. But it's just it's funny to me.

Josh McMahon: 14:10

Yeah, profit's not a bad word. I mean, I know there's this movement in America that that people shouldn't make money, but we should pay people more money. So it's it's kind of like a double-edged sword on this this discussion, right? But like businesses have to make money to pay employees, to raise their families, to to to be consumers in the marketplace and add more to the the economy. It's a good thing. Right. And I'd I think there are always gonna be customers who are focused solely on the price, and I think it's less of them than we think it is, because actually what you're paying for is an experience. So yes, the toilet's more expensive than what you could get it for, but the headache that you'd have to go through to go buy it, make sure it's good, get it installed, hope that it doesn't leak, hope the guy who installs it or girl who installs it comes back to warranty their work. Hopefully they don't trash your house, track mud through the house, hopefully they'll come back and clean it when they're done. You're paying for an experience. So when you focus on these these dollar amounts, you're only factoring the price of the good. But there's so much more that goes into it.

Carolyn McMahon: 15:24

Well, and you know, you're getting lots of value from that four or five thousand dollar toilet, let me tell you.

Josh McMahon: 15:29

You you absolutely are. I mean, you could easily go get that$119 toilet at Walmart or Lowe's and be just fine because it it will do the toilet things, but when you're purchasing a toilet at four or five, six thousand dollars, you're purchasing it because of that built-in Wi-Fi.

Carolyn McMahon: 15:47

Well, I want that bee to clean my house at that price. One day Well, I mean it it cleans something, but just not your house.

Josh McMahon: 15:56

So as we talk about the the margin discussion, and and some of this came up because we are at the start of the year. People are are looking at their forecasts, they're trying to plan for for how are we gonna be profitable? Where are we gonna, where is every business going to earn their revenue? You know, my business, I have a revenue target, I have a net uh gross profit, a net profit target, and I'm like, where am I gonna come up with this? This where am I gonna generate this income? How am I gonna do this? We're all doing that stuff.

Carolyn McMahon: 16:23

Yeah, so how do you protect yourself from that?

Josh McMahon: 16:26

Well, well, some of it is understanding that there's no small misses. So when we started this, I talked about your purchasing, your estimating, your design, your whole team trying to be as good as they possibly can. Like, don't ignore something saying it's no big deal. It's a hundred dollars.

Carolyn McMahon: 16:45

Oh, wait a second though, but we just talked about this the other day. And you thought perhaps I was overthinking something, or it didn't have value, or maybe my management wouldn't find that it was valuable because it was such a small dollar amount.

Josh McMahon: 16:59

Well, okay, yeah, that that's right. Okay, so this this is a good point, it's a good segue. So I'm saying don't dismiss the little things because the little things add up and you'll you'll erode your margin. You're not gonna lose your margin all in one fail swoop. It's not one cost code, it's not one day, it's a culmination of things will erode your margin. And and it will erode your margin quicker than you believe, these little things. But Carolyn was talking about an item at work that was you know, it was a it was an opportunity to protect margin and and earn the company, you know, revenue, right? But I was asking, because you know, you were uh visibly upset about it, you know, because you you're very passionate about the the the money and and protecting the business. You're very passionate about um taking care of the customers and giving them a great customer experience. So it's not just one-sided, you know, you're not just focused on money, you're focused on the the total experience, which is what makes you great at what you do. But my question to Carolyn was what dollar amount does the leadership of the company want you to focus on?

Carolyn McMahon: 18:13

Yeah, and I didn't know.

Josh McMahon: 18:15

And and so that this is why I say it, because I would say uh to me, Carolyn is, you know, I would say you're my problem solver for anything like I didn't know where that was going.

Carolyn McMahon: 18:28

You started with I was your problem.

Josh McMahon: 18:30

Well, different, different pod. But you're my problem solver really for anything 500 and up, a thousand and up. And what I would say is, look, if we're if we're chasing around over$500, that's not worth your time.

Carolyn McMahon: 18:47

You said anything over five?

Josh McMahon: 18:49

Anything less than$500 is not worth your time. The the greatest lesson I ever received was if I could solve every problem with$200, I wouldn't have any problems. And man, I agree with that. And and as you grow in your career, you'll have a threshold where anything less than this, you don't worry about it. You just somebody else needs to be handling that. So I would say for you it's$500 or a thousand and up. And if it's less than that, that's somebody else needs to be dealing with that.

Carolyn McMahon: 19:17

But you know, it's an interesting point, and I'm I'm not sure I'm quite behind you yet. I'll talk to you know, leadership and see what they want or what they want to say. But you know, if everyone took that tact, right? That if it's less than$500 to let it go, what if it's less than$500 for for this task and this task and this task? Talk about uh, you know, quietly eroding. It is kicking the door down at that point.

Josh McMahon: 19:47

Yeah, but but the thing that you're you're missing is that I'm saying you would not handle anything 500 or less.

Carolyn McMahon: 19:55

Okay.

Josh McMahon: 19:56

Somebody else is still tasked with handling that. Oh you're more valuable to me that you should you're gonna be finding things that are 500 to 5,000, whereas because you're detail oriented in the way you can sleuth and dig into things, well, if you use all of your energy and your bandwidth on something and you're like, man, I got it, saved us 150 bucks. I'm like, how many hours does that take you, Carolyn? Six? But I got that 150. I'm like, yeah, but you cost me 1200.

Carolyn McMahon: 20:28

I only make, you know, a couple dollars an hour.

Josh McMahon: 20:32

But if you saw yourself worth what I see yourself worth as, you know, two to three hundred dollars an hour, you wouldn't chase some of those little things because because time is the great enemy. So if you burn up too much time on a small task, well, I'm not getting the real value out of you. So that's what I'm saying. I'm not saying we ignore it. Somebody else needs to be tasked with with focusing on that. You might find it and say, hey, person X, I need you to dig into this and let me know what you found. So you're not ignoring it, it's still on your radar, you're just delegating to somebody else.

Carolyn McMahon: 21:10

So I I mean, I will agree because I'm you know, my my primary role is not purchasing, it's not estimating. I don't I don't do any of that. And I I I do it in relationship to my department as far as you know pricing things. I'm a beast. I mean, I I I make I make money, but yes, I am not in P and E. And I do bring it to PE's.

Josh McMahon: 21:35

Um as you should. Yes.

Carolyn McMahon: 21:37

And then I guess I have to let it go whatever they do with the information.

Josh McMahon: 21:41

That that's my point, is that if you get wrapped around that one thing, even though you've delegated to the proper people, that's where I'm saying, hey, you're on to something. I like your passion for this, but what does leadership want you to do with that? When you find this, what do they want your response to be? Because we can get lost in the weeds on something like that and really dig in, and what we we fail to understand is that we think we're doing what the company needs us to do, and the company needs us to do it, but the leadership doesn't want us to do it. So now we become a culture misfit.

Carolyn McMahon: 22:19

Oh boy. Not there yet.

Josh McMahon: 22:23

You it listen, it it takes time to understand that concept. As I think back on uh a really tough uh role that I had, I thought I was doing all the right things. I was working, I was I was grinding, I was putting in all the hours, I was doing all that stuff. The president needed me to do something, install appliances in a house, install cabinets, I did it. I did whatever was asked of me. At the end of the day, it wasn't the right fit for me. It was mutually decided that I was gonna move on. Because I thought I was doing what the company needed, and the company did need that, but that's not what the company needed me to do or focus on. So I was out of alignment with what they wanted and needed. Even though they were asking for some of those things, it was my fault for for not pushing back and staying in my lane and focusing on what I needed to do.

Carolyn McMahon: 23:16

Well, talk about a segue into a cultural misfit.

Josh McMahon: 23:19

Yeah, well that's but but now I can recognize it and I can look back and realize that's that's what the miss was. And and it and it's a it's a growth thing, right? Because some of the issue in the industry is that people don't tell you what you need to do differently, they just let you go and then they go find somebody else to do it again.

Carolyn McMahon: 23:40

Well, right. I guess um, you know, my level of frustration often is that um that things just don't change.

Josh McMahon: 23:48

Well, and I I think that that's that's another podcast, right? Because I think some margin erosion comes from culture more than anything. You know, culture being this is how we've always done it. Every company in America, every company probably in the world, has that individual that says this is how we've always done it. Well, that's why you're dying. You you can't go through uh your your company's existence and say this is the way we've always done it. I mean, Japanese companies have been around for hundreds of years don't say this is the way we've always done it.

Carolyn McMahon: 24:19

Yeah, well, they're constantly innovating, yes, changing. Um, and and you know, we're going through, you know, kind of that rebirth, I guess, if if you will, as people um, you know, are leaving and new leadership is coming on. Um, you know, we've got some growing pains and we have you know a ton of institutional knowledge that we're trying to fix uh through actual processes, like, hey, let me just you know open up your head and scoop it out, put it on paper and and you know, put it into process. You know, and it scares some people because they're like, well, God, if I tell you how to do my job, that means you can hire someone else to do it. And it's it's really it's not that simple. Um it's not right, and no one should should feel that way. I mean, I want everyone to be able to do what I do, um, just not with my flare.

Josh McMahon: 25:13

You don't have enough flair. You need to you need to step up your flare game.

Carolyn McMahon: 25:17

Yeah, I need some sparkle.

Josh McMahon: 25:19

Yes, you need some sparkle. I think a lot of people have a scarcity mindset. If I train you how to do what I do, then you're gonna take my job. AI is gonna take all of our jobs. And and that's that's because we come from a position where we think that there's a limited amount of of whatever it is, and there's not enough to go around. That's not true. There's an abundance of whatever it is that you want. AI is not gonna take our jobs. AI, if we ignore it and we we hide from it, yeah, you're gonna lose your job. I'm sorry.

Carolyn McMahon: 25:54

Right.

Josh McMahon: 25:54

If you embrace it, leverage if you embrace it and leverage it, it's gonna take you to another level in your job. And and I'll use this example when they first started implementing builder software for scheduling, purchasing, etc., we all said, we're all gonna lose our jobs. Why do you need us? You got this software. Not only did we not lose our jobs, but it created more jobs because now you had to have experts in knowing how to operate the systems, how to how to manage it, how to how to coach it. You had to do more with it. And honestly, we can't do our jobs anymore without the system. You can build one house at a time without a system. You can do that in Google Sheets or Excel. You start getting above you know, really just one house, it starts to get really foggy on what you're doing, where your money's at. Because as we're talking about margin, you release a house at a certain margin percentage. That's the amount of profit you intend to make on that build if your schedule is the done the way you it needs to be, because you got carrying costs. If you're most of us have a loan to do this, you're not paying what whatever quarter million dollars to finance your own bills, you're using a bank or a hard money lender, somebody else. There's interest. You better calculate your carrying cost in your your budget. So if you miss one day, it's just one day. What's one day? Well, start calculating how much interest is it over the the period that you're going to carry that loan. That's your one day. Yeah, there's a real cost to it. Um, so we need to be considering that, and I think the builder software helps us to do that. And here's the really interesting thing AI is starting to help us do some of that stuff. Now, I'm not telling you that it's the magic pill, but you can plug in a set of drawings and some of these AI platforms and give it an idea on what you're trying to build and where you want to be, it'll give you a range of what that house is gonna cost you. That's a great tool for homeowners. Sure. Like I want to build this house and I want to pay$300,000 for it. You can plug it into AI and it says, hey, you've lost your damn mind. It's gonna be$650. Because the bulk of your cost is in the ground, it's not your it's not your finishes. Well, I'm gonna go, I'm gonna go get cheap cabinets off the off the shelf at Home Depot. Well, that that's not gonna change the price. The price of the home is in the square footage, your footprint is the extreme cost. Anyways, I'm off track. But the builder software and the AI stuff, it will help enhance your job. And I really think if we all start to lean into um more is more, like us, me teaching you something is not taking anything away from me. It makes you better, it makes you stronger, which means you start to take things off of my plate, which allows me to do bigger things. So when I said your task should be 500 and up for variances or other things, that's what I want you chasing. Well, somebody else is handling the other things that you were doing, and now you're leading those individuals. So this is a fun topic because I think that profit and margin is a critical piece of everybody's business and what we do in uh in this world. And we all need to uh we need to focus on it, everybody. But it really starts from the top down. There's no bottom-up movement, it's from the top down. The top needs to understand what is our goal, what do we want to focus on, and then get your team all in alignment with that goal. Because if you don't, and you you just be quiet, you're going to burn out people on your team because they're focused on things they shouldn't be or they should be, but you're not supporting and re reassuring them that they're on the right path. Sure. And people will start to lose interest because thinking that well, I'm not doing a good job here. That's a good discussion, right? That's a good start.

Carolyn McMahon: 29:45

That's a good discussion, right?

Josh McMahon: 29:47

On margin.

Carolyn McMahon: 29:48

Yeah, I think it's you know, it's just the start because you know, what what is a what is a good margin look like? It's gonna be different for every size company.

SPEAKER_01: 29:58

Yeah.

Carolyn McMahon: 29:59

Um, and then you know, it's at certain points, you know, is your margin too big? Well, what does your sales tell you? You know, yeah, the market will dictate, you know, all the things.

Josh McMahon: 30:10

You can start diving into more of that and and and working on your efficiency level. And and I really maybe next week let's continue this margin discussion, but I really want to talk about um the the the price struggle that we're all faced with right now because the market is becoming tighter, it's harder to sell homes right now, and we're looking for ideas on how we can help to reduce our cost to help us sell homes quicker.

Carolyn McMahon: 30:36

Yeah, and perhaps you'll talk about a meeting that you went to a couple weeks ago. You know what? We'll talk about it next next one.

Josh McMahon: 30:43

Possibly.

Carolyn McMahon: 30:44

Possibly.

Josh McMahon: 30:45

Till next week.

Carolyn McMahon: 30:46

Take care. Bye.

Josh McMahon: 30:54

Yeah.