“When builders come to town for an orientation, our goal as a company and my goal is to get them excited about the opportunity to be a part of something bigger.”
Host: Today we’re joined by Stew Walker, VP of Construction with Epcon Communities. Welcome, Stew.
Stew Walker, VP of Construction at Epcon Communities: Good to be with you.
Host: Stew, I’d like to start out asking you a question. You work with a lot of Epcon Franchise Builders around the country. I was just curious, what is the most important advice you’d offer a new Epcon Franchise Builder?
Stew: That’s a great question. I think my biggest takeaway from the interactions that I’ve had with a lot of them is to be willing to listen. Because you’re now in a group of other industry experts, meaning other Franchise Builders, that bring such a wealth of knowledge to the business. I learn so much every time I’m around them as much as I can give to them.
I think that’s a real unique position to be in to be able to listen to somebody from the Southwest, “Here’s how we put a foundation in the ground or here’s how we accommodate for this particular situation.” I think all of them can pick up some tidbit that makes them a little bit better because somebody else has done it.
Host: Yeah, that’s great. We bring in a lot of really seasoned people into our network and they come from either home building or land development and to be able to come into a network and still have that ability to listen, to hear new ideas.
Stew: It’s exciting too when you get in front of some new Franchise Builders that are excited about what this new venture brings. When they actually do want to listen because they want to kind of take in whatever they have and they get excited about, “Oh, wow, that’s cool. You guys do this. That makes sense,” or how they do something.
It’s very rewarding to be around in those conversations when you kind of feel like you’ve hit home on an idea or sparked something that hits home with them.
Host: Absolutely. As we’re talking about seasoned, you’ve been around the industry for a little while, a couple of years. I was hoping you might be able to share your experiences.
Stew: Well, I started in the building industry in 1993. This is 31 years now, which is impossible. I’m barely in my 40s.
I started with a production home builder in Columbus, Ohio, right out of college. I was sweeping out basements and picking up trash and doing whatever I could after college and got a really good basis of knowledge with a production home builder back then, and made my way up through the ranks through the ’90s and the early 2000s into a management role.
I came on board with Epcon in 2005, the end of 2005, as a director of construction. My experience is field experience. I wasn’t in purchasing. I wasn’t in sales, but I was a field project manager. I spent 10 years with Epcon in that role and I actually stepped away.
I had an opportunity to own my own contracting business here in Central Ohio, and I wanted a chance to have a little taste of ownership. Ed and Phil were awesome about that. I actually went to both of them and spoke to them about the opportunity that I had. They were both very positive about that, and so I did that.
Then when COVID hit in 2020, it made it tough for me to maintain that business. It just happened to coincide with an opening for VP of Construction at Epcon. Fortunately, the relationship that I had with the team that was in place at Epcon at that point in time allowed me to come back.
I’m very grateful for that opportunity because it’s really been awesome. The growth that has happened here, not only in the first 10 years that I was here, but over the last five years with the really big growth and focus on the Franchise Builders that have joined the team. That’s been cool to be a part of.
Host: Yeah, and when you’re working with other business owners, entrepreneurs, I think that experience that you share is having owned your own business. You understand the sleepless nights. I had my own marketing company as well and have been the entrepreneur on the other side.
When you’re working with people who are running a business and all the things they have to juggle, that’s a pretty invaluable experience to have.
Stew: No doubt. Honestly, I never had that experience prior to going out on my own and having that. I talked to Ed before I came back to Epcon and he said, “I feel like you went to go out, get your PhD and come back because these are just some of those experiences that you can’t teach or you can’t understand until you’ve kind of walked in those steps.”
It’s truly what all of the Franchise Builders are going through, the owners, because it’s a big risk for them. Although a lot of them have done that, had their own building company, if you will, prior to joining up with Epcon, but certainly that experience helped me.
Host: You’re a two‑time employee for Epcon.
Stew: I call it one time but yes I am two time.
Host: I’m just curious what brought you to Epcon? Why Epcon? Why the first time and why the second time?
Stew: I had worked with a gentleman who was in the franchise division back in 2005 when I was at Dominion Homes, my previous employer. He and I had worked, he was in purchasing and I was a production manager. We had revamped all the scopes of work for all the phases of construction.
When an opening for director of construction at Epcon came available, they actually reached out to me. I didn’t know a whole lot about Epcon at the time, but I wasn’t really happy about the direction of the company I was with.
It really was an opportunity to come to more of a smaller, privately owned business from a public one and I thought that might be a good opportunity. I didn’t know, it was a little bit of a leap of faith. I had been there for 12 and a half, 13 years, but I soon realized that was a great move on my part.
It was interesting because coming from a larger organization, I had a really narrow focus on what my responsibilities were. Stepping into this role here, I did all the permitting, I did all the kind of administrative things that we had people in my previous life do. I had to do a lot of those roles, which really made me more well‑rounded in the business.
It also made me appreciate how important all those pieces are to the business, which, again, back to our Franchise Builders, a lot of them come from an operation where they’re doing all of that stuff because they don’t come from a large organization so that was good experience. It also made it a little more intimate, a little more of family-type situation to work in.
Host: One of the things that we often like to talk about is the scalable and repeatable process. As a home building franchise, which there aren’t many of us out there, when you bring people into your network, it’s you’ve got to be able to teach them what you do. You’ve got to be able to document it.
You’ve been a big part of putting down on paper, as well as directly teaching, what it is that we do and how we do it. I was wondering if you could talk a little bit about that.
Stew: We, not unlike other builders, but we created a template for how things should go together. It does make it repeatable and more second nature when you get into the field and do that. It’s also something that can transcend your location.
We can take that same sort of template, if you will, and set it up in Indianapolis or set it up in Charlotte or set up in Raleigh. I actually was here when we corporately opened up in Charlotte, Raleigh, and Charleston, South Carolina actually at the time.
We basically ran those operations from Columbus. We took what we had set up and said, well let’s see if this works here. There are some small tweaks that you have to do, that are unique to the region that you are in, but having that consistency makes it easier to manage from wherever you are.
The other thing is that we have a limited number of plan types and so that also adds to that consistency and that ability to make it repeatable and more predictable as far as time. Time is money, and so that’s a that’s an important piece to being in control of your business if you’re a business owner or a manager of that part.
Host: One of the words you just used was unique. Another thing that makes us unique is our focus of where we’re building and who we’re building for. We build single-level homes for the most part that are very popular with the 55+ buyer. It’s an aging‑in‑place type of product. That brings its own unique challenges. Being in this part of the industry, what have you learned along the way for building in this segment?
Stew: There used to be a, I don’t know if it was a rule, but it was kind of this industry standard that there was a minimum number of steps up from the garage into the house or a minimum number of steps up onto the porch from the front.
When you have a design that doesn’t have a front porch covering your front door, you definitely want to have some sort of a step up. Especially if you’re north of, say the Carolinas, you’re going to have some snow and that might melt and cause some problems on your door.
We have front porches that are covered and our garages are all covered. Why not do that? It’s kind of like, “Well, I guess nobody ever has done that, but why not?” and so that’s become our standard. It really was kind of asking, “Why not?” and then starting to implement that.
That’s, again, a unique part of what we have. It’s not like it’s rocket science, it’s not like it’s the secret sauce, but it’s just thinking about the things that will make it more enjoyable for our customers because this is what they’re dealing with now, and we can do this. There’s no reason we can’t.
We’ve started with zero‑entry showers. At one point, it was like, we have this one house, let’s see if we can offer it there. Then it was like, if we can do it there, why can’t we do it in all the houses? It started in the owner’s suite and then it’s, if we can do them in the owner’s suite, we could do them in the guest bathroom. Those amenities, it’s not even an amenity, it’s just a thought, why not?
Those are the type of things that give our product, I think, an advantage over some others in the market because we’re actually thinking about the livability of the home, not just the layout, and not just a big amenity building somewhere in the middle of the community.
Host: Yeah, and it’s also that ability to be innovative and be flexible and look at things differently. It’s probably one of the really special things about our company is you’ve got the ability to question, why have we been doing it that way, and could we do it a different way?
We often talk about a lot of great ideas come from our Franchise Builders, because they also have that ability to come to us and say, “Hey, here’s another way for us to think about these homes and what if we did this or what if we did that?”
Stew: Absolutely, and that goes back to what I talked about at the beginning of our conversation. When I get to do these, either the orientation or the Discovery Days when new Franchise Builders come in and we’re walking through some of our product, that’s generally when I spend time with them to just say, “Here’s how typically we do this or typically we do that.”
I get information from them about, “Hey, we’ve thought about doing this,” or maybe a different way of more technical stuff, how to stop air infiltration in some areas or from an insulation standpoint in the comfortability of the home.
They might do something a little bit different that’s a little more technical that the customers may not see, but those are things that you hear all the time. The Big Mac came from a franchisee at McDonald’s, we’re open to that.
We’re, as Paul Hanson knows very well, constantly not reinventing ourselves, but improving ourselves. We just went through an update of our floor plans, and guess what?
We have the same floor plans, but we made improvements to every single one based on comments that we got back from our own people, comments that we got back from our customers, comments that we got back from our Franchise Builders that say, “Hey, those are great, but have you thought about this?”
If we make those little improvements, and plus, it also just keeps us in tune with what the market wants.
Host: Always improving the product, always making it better for our customers, but also making it more efficient to build.
Stew: Yeah, and we also don’t go into it like we know what’s best. We think we know what’s best because we’ve designed it, but it doesn’t mean there isn’t something better. We’re willing to listen to that and we’re willing to make that change if it makes sense for us as a company.
Host: While we’re talking about efficiency, I think something that you could be very proud of is that Epcon’s cycle time is down from pre‑pandemic levels. I wonder if you could share what’s changed and how this was accomplished?
Stew: Well, there were a lot of forces outside of my influence that had to do with that. Certainly, the manufacturing and the availability of materials has gotten a lot better. It was not quite double, but almost double of what our typical cycle time was at its peak.
For a while, we had to overcome the attitude of the vendor base that said, “We just can’t do that.” We can’t be there and accomplish that in one day, two days, three days, because they couldn’t for a long time. It was a constant, “Yes, you can, yes you can, you’ve done it.”
Then, we also emphasized competition within our own vendor base to encourage that, if you will. That not only helps with our buying power when you’ve got vendors pitting against one another for the business, but also working into the labor portion, the service portion, because that’s as important as the price.
Rather than having a single-source vendor in any sort of phase of construction, we’ve really encouraged competition and increased our vendor base so that that competition helped drive it down too. That’s been really beneficial, and really across the board in all of our regions, our numbers have really come back to exactly where they should be.
Host: That’s fantastic. I think what you’ve just shared is some of the knowledge base of being a part of a network such as ours. We’re not just one builder. We’re a network of 80 builders. Many times, if you’re a smaller builder, you wouldn’t have the ability to go out and talk to account partners, vendors and say, “Hey, here’s what we need from you.”
That collective sharing of knowledge, as well as being able to negotiate or contact vendors in a certain way, that’s extremely valuable.
Stew: Well, think about a lot of our Franchise Builders when they join us. They may have already been in the business, and they have their favorite HVAC guy, their favorite electrician, the people that they have used, and they absolutely need those partnerships.
Encouraging them to go out and have some competitive bids, have some competitive conversations. There are other people who can do the work and that will be good for you. And just by having those conversations with others within that same phase, it’s going to have that impact on your cycle time too.
Maybe they’ve just never been exposed to that because they’ve always used the same people, and they’re good people, but something that may take them five days, somebody else may be able to do in three. It’s kind of like well I guess maybe we could do it in three, but you’ve never said that you needed us to do it in three.
It’s just really having those conversations with other builders or with Epcon to say, “Do that. That’s what we do.” It kind of just plants a seed in some of the new Franchise Builders that we are working with to say, yeah, this makes sense. That improved efficiency makes them more efficient, and in turn, more profitable.
Host: Let’s talk about some of those conversations and when they take place. I know there’s construction orientations as well as the Epcon National Conference. Those are just some of the opportunities where those conversations take place. Ultimately, what can a builder expect from the construction department, as well as any of the departments in the company, in relation to that?
Stew: When they come to town for an orientation, our goal as a company and my goal is to get them excited about the opportunity to be a part of something bigger. While maintaining their own sort of family business that they’re in. Through our network, they have buying power through our national account partners.
If it’s a brand of siding, if it’s a window, if it’s a shingle, if it’s some other component in the house, they’ve got the same ability and purchasing power that we have corporately just being John Smith from Omaha, Nebraska or wherever, that can come in and talk to those same people and say, “Oh yeah, you’re part of the Epcon network. Yeah, we have this pricing.”
We also have these vendors that we would recommend that you use, do that. I mean, their eyes light up when we start talking about that kind of thing because, truly, that is taking them to another level without having to grow their business to the size of our business.
It also has the reverse effect for us corporately. The more our reach is with our Franchise Builders, the more attractive we are to national account partners. It’s a real unique business. That’s the first time we start having those conversations.
Then when we go to our own national conference, all those national account partners are there. They’re all meeting with the Franchise Builders and saying, “Hey, we’d love an opportunity to work with you. We’re very familiar with Epcon and the Epcon product.” That’s a great opportunity for both of those individuals to meet.
Also, we bring in industry experts that are well-known throughout the entire building industry nationally. Again, because of our reach and our scope, because of all the size of the whole organization, they come in because it’s an opportunity for them to get reach that reaches all parts of the country. It’s real unique and fun.
Going to IBS in Vegas or in Orlando, it’s great. It’s massive, but it’s almost too much at times because there’s just so much going on. This is so targeted. It’s targeted, not only for the national account partners coming in saying these are the new Franchise Builders that are on board and they want to talk to you, but the reverse is the same. It’s just a really unique opportunity that is targeted in both directions.
Host: Let’s keep dialing into that a little bit further. We’ve talked about knowledge sharing. We’ve talked about relationships, vendor relationships and such. Number one question we often get is, OK, what else do I get? Is there anything tangible ‑ plans, specs, schedules, those types of things?
Stew: We provide them plans. We provide them all the contact information of those national account partners. We have partnerships with companies like Higharc, that draws all of our plans and has the ability and want to have the ability to draw plans for any of our Franchise Builders and any of their locations.
We have structural engineers that can work in pretty much 50 states that are familiar with our plans and our specs. We have mechanical engineers that design our HVAC systems and our electrical systems that will work pretty much in any state in the US. That’s what you get.
It’s not turnkey, but it’s about as close as you can get because all of that is part of the package. When you come in, these are the people that we use corporately. When you become part of the family, Epcon’s larger franchise organization, you get all of that information.
Host: Construction schedules.
Stew: Construction schedules, you get the templates for the schedules. You get templates for how to purchase, how to buy out your community. We may not share our exact costs, but we do share, especially with some previous communities that have already been completed, here’s what our costs were. A lot of the Franchise Builders will share those amongst one another.
They’ll know whether or not they’re getting taken advantage of or not. That just puts you in a much greater bargaining position when you’re going to talk to somebody and say, “Hey, these guys are getting it for this and they’re having it done in five days versus seven days.” All of that information is available ‑ plans, warranty booklets, safety manuals. I’m sure I’m missing things.
Host: It’s pretty comprehensive.
Stew: It’s comprehensive. We just have opened up operations in Atlanta and Nashville, and we’re providing those playbooks to all of our own people corporately. All of that information is shared because it’s one of our own. That same information is available to all of the Franchise Builders that come on board.
Host: We do the same thing. We launch new regions and new communities, just like our Franchise Builders do. Let’s talk about the building process. If we’re going to talk about schedules and estimates and best practices, how fast can an Epcon builder expect to build a home if they follow the process?
Stew: That’s a great question, because sometimes when we have these discussions, there are some people that still don’t think that they can do it in quite the cycle time that we do corporately. Our ranch home right now on paper is 112 days from start to finish. We actually just completed our most recent models in under 90 days.
Can they expect to do that? Can new Franchise Builders expect to do that? No, but it’s possible. The template would say, yeah, follow this template and you can do it. 112 days is very doable, but you’re not sitting around and waiting for the next thing to happen. Obviously, you’re planning it out and you don’t have downtime in the schedule.
We’re actually currently looking at ways right now we can maybe shave a couple days even off of that because now that the supply chain is back, our cycle time is better. If you think about interest in carrying construction costs, every day is money.
We would not be doing our own business a service if we weren’t looking into those things and how we could shave one, two, three, four days off of some of those schedules. Again, those templates and those schedules, that ability is something that we would absolutely say that anybody could walk in the door and accomplish. We give you the tools to be able to do that.
Host: For a company that’s been around for 38 years, we’ve done it a time or two, but that’s part of the scalable, repeatable process.
Stew: That’s right.
Host: That’s what we’re really trying to pass along to our Franchise Builders is, “Here’s something we’ve put together, we’ve honed it over time, and now we’re sharing it with you, where you don’t have to pay the dumb taxes often brought up. All the mistakes that we’ve made, we’ve corrected them, and now we’re giving you the plans and the process without the mistakes.”
Stew: That’s right. Back to the point I was making about looking to shave a couple more days, maybe there’s a few more mistakes or a few more efficiencies that we can look at within our current process to say, we could probably do that a little bit better, let’s try it. Again, always willing to try to get better, try to better ourselves and share that with our entire organization.
Host: Let’s talk about a couple more challenges that a lot of home builders deal with. That’s between labor, construction material costs and the like. How is Epcon working around those, and how do we help our Franchise Builders in relation to those?
Stew: Our reach allows us to be an attractive partner for a vendor because of the number of homes that we’re going to build.
If you’re a supplier, you want to work with a company that’s going to have not only that sort of volume in one area but in several areas across the country. That’s attractive to somebody to say, OK, we’re going to allocate this to Epcon and the Epcon brand.
Host: We can be a builder of choice.
Stew: We’re going to be a builder of choice, that’s right. You want to be the builder of choice. That’s a great term because part of being that builder of choice is knowing what you do. Having vendors know that when they show up on an Epcon job, they’re going to be able to do their job and not have to keep making return trips because they’re costly to them.
That repeatable process plays into that because they’re in it to make money as well. If they can show up on an Epcon job and know that they’re going to make money, when the next time two jobs come up, one’s an Epcon and one is brand X, they’re going to send their better crew to an Epcon job because they know it’s going to be ready for them.
Again, understanding that basic concept of building, it’s not something that people understand, but just making sure that you’re ready for somebody, and if you’re not, telling them we’re not ready. Don’t show up. Then having that trust that you’re going to be ready. Anyway, that is making yourself the builder of choice. It’s what a vendor is looking for so they can be the most profitable they can be.
Host: Talking about construction and the quality of the homes, cycle time, we have a program called QualityMark. I was wondering if you could explain it to us a little bit about what QualityMark is.
Stew: QualityMark is a term that was copyrighted actually back in the early days of Epcon, where we had a third-party individual walk every one of our homes prior to the home buyer walking the home and giving us a numerical grade on the quality, fit and finish of the home.
We have embraced that. There is every reason for a project manager to not like somebody coming in and critiquing their work prior to meeting with a home buyer. We’re the expert, but it’s easy to get a little bit blinded by just making sure the cabinets are installed, the trim was installed, versus they’re installed and they’re installed properly and every inch of them is defect free.
That takes a little bit more of an eye, and you can go in every day and be looking for the next thing that needs to be done, but this person comes in at the end and looks at everything in the home and gives it that sort of level of critique so that when the home buyer comes in, the home is done.
Host: Yeah, third‑party validation that the product that we’ve built is at the quality we want it to be.
Stew: That’s right. We have actually built that into our standard operating procedure corporately. The build time doesn’t stop for our project managers until they reach a 90 percent or better grade on each home. Now, what does that mean to you?
90 percent is not an easy level to reach on a brand-new home in a 112-day schedule. It takes focus and it takes attention. Our project managers understand that this is the expectation. You’re going to do this on every home. You’re going to get it inspected every time before you meet the home buyer.
If it doesn’t reach that level, your build time is still accruing, so they’re incentivized for their build time to not keep accruing. Those items that were identified, they need to be addressed. They needed to be addressed anyway, prior to the home buyer walking the home.
Then we also have said we expect that the home buyer signs off on the homeowner orientation list prior to going to closing 100 percent of the time. That’s a procedural change that we made a couple years ago. It kind of doesn’t allow for things to linger in beyond closing, and guess what?
That has a ripple effect then on your warranty and your warranty costs, and also what people are saying to one another when they’re in the neighborhood about things that still are lingering in their home after the fact. We’re always evolving with that.
QualityMark has been a hallmark of ours for a long time that helps to ensure that we deliver a quality product to our home buyer, and they can feel confident that they’re going to get that.
Host: Setting a standard internally and then holding people accountable to it.
Stew: That’s right. Corporately, we build that into the incentive package for the project managers to say, “Hey, this is not only what we expect, but we’re going to bonus you on this.” That’s a good motivating factor, too.
Those are part of the conversations that we have with Franchise Builders that come on board with us to say, “Well, this is how we do it. This is how we ensure that we are delivering a good product. And how you, as an owner, can be sure that through the process that we use, that your people, your field personnel are representing you the way that you want to be represented.”
Host: Very nice. Well, last question that I have for you, Stew, is if you were going to speak to a land developer or a home builder that was considering Epcon, what would your advice be?
Stew: I would encourage them to listen just like we talked about at the beginning of this podcast. Listen to the other Franchise Builders. Let them tell you why they’ve done it and the opportunities that they’ve gained by doing this and their ability to expand their portfolio. Have them tell you.
We can tell you how great it may be, but the greatest stories come from the people who have already done it and the fact that, what a good decision it was for them to get involved with Epcon.
Host: That’s great advice, thank you. Thank you, Stew. Appreciate your time today.
Stew: I appreciate you having me.