I’m super honuored today to have, I guess, a bit of an icon in Calgary. If I can call you that, Shane, Shane Wezel from Shane Holmes on today, and we’re going to talk about a lot of things. Thank you so much for coming on and agreeing to do this, Shane.

Well, Clayton, thank you for having me.

We usually start out by just understanding your story and how you came to own Shane Holmes. I understand it’s a family business 43 years. Why don’t you take me back to, or take the listeners back to the beginning?

Well, believe it or not, we’re entering our 45th year now. 45th. Yeah. That’s hard to believe. When the marketing team laid that on me last year and they said, is this something we’re celebrating? Well, like I said, of course it is. Yeah. But almost 45 years ago, my father and his business partner started Shane Holmes and they went through their growth spurts like any other business, but they managed to carve out a niche in the marketplace. And that niche was doing fairly good production homes, but with a customization twist to it. And what we feel we have from the single-family division today is certainly that. It’s a production home builder with customization, and we feel we’ve actually perfected that process throughout the last 45 years.

That’s super interesting. And I want to get back to this because just looking at your website, you look as if you’re a custom home builder. By and large, you’ve got stats on the front page of your website that kind of indicate that somewhere around 70% of your floor plans are unique. I want to come back to this. How did you get involved in the business?

Well, I think a lot of people feel it was preordained having the company named after me. And the reason was is that my father was a majority shareholder in the company, and his business partner, Barry Bosley, had always intended on exiting the business if he was financially capable. After at the 20 year Mark Barry decided, that’s it. I’ve had enough. I want to slip into retirement. And he’s honestly, he’s never looked back. But at that time, or prior to that, rather, the company was growing leaps and bounds and my father recognized that it wasn’t just a two-man operation anymore with some staff surrounding them. He had to expand, and his wish was always that it would be more of a family-based business. So that introduced a lot of us to home building, myself included. So I started.

So how old are you at this point, approximately?

Well, I was 14 when I first started working on the job sites during my summers. His attitude was, you’re not going to sit on your ass. You’re going to start working, and we need the help out there. So I was on the job sites from the time I was 14, and when I turned 18, I was welcomed into the office and I came in with the title of marketing assistant learning under my father, and things just kind of progressed from there.

Right, nice. And so your father, has he exited the business?

No, no. At his age. Cattle is 80 years old now, and he has stepped back a fair bit and he started stepping back about 12 years ago. But he’s still involved in a lot of things, primarily with the foundation and I would say a little bit more of advisory.

I noticed that just looking at the stuff that you’re doing online and just what I know about Shane Holmes, because it’s a bit of a staple in Calgary, obviously and surrounding area. You’re big on foundation, you’re big on community, you’re big on giving back. And run me through that a little bit. When in the journey was the foundation started?

The Cal Wenzel Family Foundation was started, I believe now 16 years ago.

(04:51)
And it was just another way for my parents to give back that was outside of the company and they wanted the correct way to do it. So not only do we give back through the Shane Holmes group of companies, but we give back through the Cow Wenzel Family Foundation. And obviously my mother and father are very heavily involved with that. In fact, my mother, Edith is the president, so you have to get past that gate before she’s going to donate anything, but you may see some of the endeavors that they’ve contributed to over the years. And the most recent one would be the Precision Health Clinic up at the Foothills Hospital.

Yeah, okay. Is it mostly health initiatives then?

There’s a lot of health-based initiatives there, but health, wellness and education is the primary focus of the foundation.

And so is the foundation, I guess. What’s the vision of Shane Holmes? The Shane Holmes group? What is the overall overarching vision?

The overall arching vision is we’re really trying to be the best we can be every day. We’re trying to provide homes in a family-friendly environment that’s mutually respectful.

Yeah, yeah, right on. Oh, that’s neat. So are we going to go for, I wonder if there’s third gen coming up. You’re in the second gen now, so the business has taken off. Are you at the helm then?

Yes, I’ve been the president of the company for the last 12 years and more recently the CEO.

Okay, nice. So let’s talk a little bit about niche versus custom. I have a podcast from early on, I can’t remember what we called it, custom is the death of scale or something like that. And so when I looked at your website and saw that 70, I think the numbers around 70% of your floor plans are custom. I’m going, how are they doing it? Because I meet a number of construction company owners who are so fixated on doing everything for everyone, and they can never seem to get ahead. And that’s often the answer is, listen, you’re trying to make everybody happy here and you can’t do that, and then I see your website and I go, well, maybe you can’t.

It’s not next to impossible. We have a large lineup of standard models, but to be honest, I mean especially on the single family side, most of them get customized to the customer specific needs. And I mean, as we can appreciate, Calgary is growing leaps and bounds, especially over the last 10 years. We have a lot of people moving in here who have very special needs and related to ethnic needs. I’m somewhat admirable of customers in northeast Calgary because they’re very, very family oriented. So when you look at the homes that they want to build, they may have anywhere from three to four generations living in the home.

How does that change a floor plan?

Well, I mean, you have specific needs related to dining options. They might want to want a dining nook that’s able to accommodate 18 people. Spice is a very important thing in that culture, and we end up creating a smaller version of a kitchen, which is referred to as a spice kitchen, bedrooms for mom and dad, and grandma and grandpa are not separated. There’s two master bedrooms usually in the house, and there could be upwards of five bedrooms, four and a half baths on the top, two levels plus basement development.

I never thought about that. We’ve got a fairly diverse team and we have over a number of years here, and a lot of folks have their folks living with them, and that’s just not something you see as much in western cultures. That’s not baked in here. It is in eastern parts of the world. So I never thought about how that affects home building, obviously. So you’ve got a product, a production style base model, and then you customize the floor plans. I bet you a lot of those floor plans you can mix and match because you’ve already got the space fully thought out and figured out in a million different permutations and combinations, and you can execute on it really quickly.

That’s basically it. After this many years, I mean, we’re proud of the fact that our sales team has been with us a fairly long time, so they’re very in tune with what people want, but they’re also very capable of redlining a plan and changing it up to accommodate their needs.

And so doesn’t that get expensive or how do you, I guess, as a young construction company owner, change orders are coming in or how do you navigate that when you’re figuring all this stuff out maybe for the first time is going, this is going to be a little bit custom. How do I deal with change orders? How do I navigate this and still be profitable?

Well, what may seem difficult to others is actually very, very commonplace for us and very easy to do. I mean, we’ve just developed this process over the last 45 years, and thankfully for technology, I mean, it’s bridged the gap immensely and it’s made covering off those changes and those change orders quite easy. Like you said, you need an experienced team and right down to the office where you have a purchasing estimating department that’s quite in tune with a lot of the changes that are happening in the home.

So you’re using a high degree of technology to get everybody talking and create a kind of shared consciousness on the backend so that when a salesperson comes through with a special request or a change order, we’re going to know on the purchasing end how that impacts things pretty quickly. Right?

Oh yeah. I mean, either the purchaser knows or they’re going to send it out for quotation, and that’s usually rectified within 48 to 72 hours.

And I noticed that you still do that while managing to maintain a 96% client satisfaction rating. I don’t know if that stat from your site is still up to date or not, but people are happy with you. And so what’s the secret sauce for navigating that? How are you creating that client satisfaction level?

What it really comes down to the core values in the company, the intent is to focus on the customer experience, and there are lots of cases, cases where there might be disagreements, and the idea is to work hard at maintaining that customer relationship. So it’s a bit of a give and take, and it’s all based on having the best experience possible. I came into the business, I could never understand why home building was such a stressful process for people, and that’s been a lot of the focus, especially over the last four or five years, is really enhancing that experience and making it more easy, more manageable for the people who buy our homes.

It’s interesting, I think I’ve heard a lot of people go, I can’t adjust my prices. Nobody will take it. Nobody will go for my new pricing model, or, Ooh, I don’t want to have that conversation with the customer because it’s pretty hard. I don’t want to have a hard conversation with a customer, so I’ll just eat a little bit of margin or whatever. And that’s so common because I think there’s this natural allergy to conflict, generally speaking. And I mean, can you speak to that? You’re obviously very good at having those conversations with people. How did you arrive on that? Was that an iterative process over 45 years, or were you good at it out of the gate or you talk about core values?

Well, I mean right upfront with the relationship that they develop with our salespeople, the customer and the salesperson have a very, we would like to think at least they have a closer relationship, and because they have that, you’re able to have those difficult conversations when it comes down to cost. But there’s always room for give and take. I mean, we obviously want to make a living at what we do, but we are not trying to rake people over the coals for pricing.

(13:46)
I know that with the way pricing’s accelerated, there’s been a lot of concern, and this is the best example I can give, is people are worried that the house price is going to go up from the time they sign the purchase agreement to the time they move in. Well, no, we have a price guarantee. We’re not going to raise it on you. We should be able to manage that process the whole way through. And I mean, the last two, three years haven’t been a good example of you have to eat a little bit of margin for the sake of that long-term relationship. I don’t know what is.

And so do you have a yard full of inventory somewhere? Are you sitting on lumber from two years ago? Is that part of your strategy or no?

No, no. I mean, luckily, lumber fluctuates, and I mean, we have some protection at the time, say we would’ve had some protection on pricing up to a certain job number and others wouldn’t. Again, it’s a little bit of give and take, and then you have to adjust your base pricing when you know what’s going up. And so there might be a few months lag, but you do work with your customer because after 45 years, I think it’s pretty obvious we’re not in it for the short term. We’re in it for the long term. We want to have those long-term customers who rave about us and want to come back and buy another home.

Yeah, I mean, you must have to be really in control of your data then and understand your costs in real time. I mean, if you’re going out to do a new build or a new subdivision or new community or whatever, and the order is being placed six months after the contract was signed or a month or two after, and the lumber’s gone up the way. I mean, that was a wild swing that we’ve had in the last three years. Right?

I see lumber practically double going back a couple of years, it practically doubled. So 2020 $5,000 lumber package doubled up to $50,000, just seemed like overnight.

Yeah, I remember that.

I mean, that’s just a new challenge, I guess, in our opinion. But to be honest, I’ve never seen every market in North America fire up at the same time. Usually about 60% of the markets are up and the other 40% are down, but virtually every market had exploded.

And I mean, you must spend, your group must spend a tremendous amount of effort on compiling data, just the data management so that you can log in and go, today, I’m here, this is where we’re at. Or yesterday or two days ago, you’ve got a real time effort happening there to understand that level of costing, right?

You have to, and we remain in constant contact. We’re very consistent. We have our management meetings monthly just to review the financials, review what’s going on as a management team, but even as an executive, we meet every other week just to discuss some of the larger issues we’re facing. So a lot of this is all this information’s compiled, and hopefully from there you can come up with the best plan of how to manage it.

So just coming on an off-ramp a little bit, I mean, what have you got behind? You’re a vinyl guy, you got a bit invested into the vinyl collection there?

Yes. I got a gift from my husband this past Christmas. It’s the Greatest Showman. It’s one of my favorite tracks. So I got vinyl in there and an autograph from Hugh Jackman on him.

Oh, cool. And do you have a nice AV setup or Hi-Fi setup where you’re listening to this stuff?

Oh, of course.

I went out and bought some, you can’t see this right now. I’ve got some nice speakers here and they’ve got a phono input. Trouble is, I’ve got people working around me so I can never really turn it up. Right.

I know you’ve got to wait until everybody’s out of the office before you can turn on the tunes.

Yeah, come in at 6:00 PM. Tell me a little bit about the experience. What is the extra value add that you can do beyond just building a house? If you’re talking to somebody who they’re going, this is nice, Shane Wezel, he’s got big buying power, they got a hundred orders in the pipe, whatever. If I’m doing 10, 15 doors a year and I want to raise my prices or I’m scared about it, what are the extra value add things that you can do as a home builder to help people go, you know what, that’s worth paying a little bit extra for and it doesn’t cost you a whole bunch. Where can you pick up some margin gain in your value adds?

Well, I mean it could be a process. It could be a feature in the home. People are very visual, so it’s to really hard to value sell with what’s inside the walls unless you can prove if it’s a green feature and it saves ’em money. I think that’s what it comes down to there. But even a process improvement as much is proper communication. And I know that seems rather for all,

(19:04)
But not everybody understands that everybody has a different level of expectation for how they’re communicated with and they want it when they want it, so to speak. So if you can provide something like that, then I think that’s something that you can differentiate your business with, just proper communication. And there’s lots of tools out there now where you can upload photos of the process or the project going through even it just keeps people in the loop. Even if you’re not talking to them on the phone or you’re not texting ’em, at least they can see the progress that’s happening in their projects.

What a great takeaway. I bet you, I don’t know, I don’t want to throw out stats because as you know, 73% of statistics are made up on the spot, but a huge amount of a huge amount of customers that call us for accounting services, the number one complaint is, my guy doesn’t talk to me, or my gal doesn’t talk to me, and you talk to when I phone, are you going to be available to talk to? And that’s something that’s sort of built in around here generally, is that we’re going to pick up the phone and talk to you and we’re going to keep you in the loop. And we’ve got that sort of culturally ingrained here and you go, what a simple thing. Just talk to your customers, what a simple value add,

Just let them know that they do matter to you and keep them in the loop. I don’t think that’s a heck of a lot to ask. Like I said, technology can really bridge the gap that way.

Yeah, yeah. It costs very, very little. So why don’t you talk about your business much on, you don’t focus at all on your business. You’re fun on LinkedIn, and I follow you on LinkedIn. I saw your night before Christmas posts, that was great. You’re so engaging online and none of it is to do with your business really, or not much of it. Is that a strategy or are you just having fun? What’s the play there? Because your marketing person, right, like you said, 18 years old, you’re in the marketing department…

It’s a little bit of both. Clayton. I always dabbled around in social media and I think where it really kind of took off and you realize you have to have a bit of a plan for, it was during lockdowns and a lot of people out there, you’re kind of stuck at home and you’re bored.

(21:49)
Technology I guess got cheap enough that all of a sudden you’re buying cameras and you’re buying microphones and what have you, and you’re just trying things out. It came back with the marketing team. They said, we would like some help. Can you do more on your social media? I said, well, sure I can, but I’m not going to do what you want when it comes to just promoting housing. I said, that’s the company shtick. That’s what you’re supposed to do. I’m going to do what I’m going to do and I’ll add in a little bit of the housing component. But the attempt was really, and still is just kind of humanizing the brand. I guess another part of the secret sauce is people can relate to that. They want to know that they’re dealing with a human being. They’re not just a number. And I would hope that’s kind of what I’m tapping into there, and that’s what I’m giving ’em is a piece of me, and hopefully they appreciate it and I’m sure some do and some don’t.

You got to take a stand on what you believe in, and I really appreciate that about you. And it’s funny you say that. If we go to data, of course our marketing director is sitting silently on this call recording us right now, but he’ll go and post something about it. We’ll post, I can post how to save a million dollars in tax. That could be my post name, and here’s how to save a million dollars in tax, and if I put a picture up of me riding my mountain bike, I’m going to get 70% more engagement on the picture of me riding. Nobody’s like, yeah, another guy telling me how to save another guy, telling me how to build a house or whatever, how I should buy something from him as opposed to, oh, here’s a dude being human and I want to do business with humans. So

Right. That’s the thing that’s relatable behind it. Now, not to say that you can’t deliver that message on how to save on tax in a different way, and it might attract people’s attention. Sometimes it just has to be short enough and give them that one little piece that makes ’em inquire further.

I imagine you’re a busy man. I probably can’t subcontract any of our thought leadership to you, but we might have to have a pint over that at some point.

For sure.

I really appreciate your time. I like to end these things off with, if you could give a new startup, somebody new to the construction industry, just duking it out, trying to pay their subs, give them just three pointers, what are the three pointers from Shane Wenzel?

Well, I mean, obviously create that strategy or rather that business plan, create that business plan and follow it through, but be prepared to adjust it. I guess the second one would be, don’t grow too quick. There’s absolutely nothing wrong with 10% growth per year. I’ve seen it far, far, far too often where people, they get caught up in what’s going on in the marketplace and they over accept what they’re capable of handling, and eventually it destroys everything that they’re working hard for. And after that, I would say take some time along the way to enjoy the fruits of all that labor.

(25:18)
You can’t just be that workaholic who’s so absorbed in the business that they never get a chance to enjoy it. You’re supposed to enjoy it along the way.

As entrepreneurs, we’re all in this game to get a little bit more freedom and got to make sure that freedom comes right.

Yes.

Shane Wenzel, thank you so much for being on the podcast and this has been an absolute pleasure. Thank you so much,

Clayton. Thank you again for having me.