Business Innovators Radio - Eric Payne – Owner of PR Design Build

Episode Date: February 28, 2024

Eric Payne is the Founder and Owner of PR Design Build in Western Michigan, a general contractor specializing in custom homes and remodels. Eric has been entrepreneurial and driven his entire life – choosing to take night classes in college to spend time with working adults and learn from their experiences. Eric joins the podcast to share his story with PR Design Build, talk about his hobbies of hunting and being outdoors, and relay his experience as a client with the Strategic Navigators team and how his tax savings have made a radical impact on both him and his business.Learn more about Eric and PR Design Buildhttps://www.prdesign-build.com/Learn about Strategic Navigators, Inchttps://www.stratnavinc.com/Host Recent EpisodesNAVIGATEhttps://businessinnovatorsradio.com/navigateSource: https://businessinnovatorsradio.com/eric-payne-owner-of-pr-design-build

When I seen how much S&I could save us on our tax bill, I was shocked. And somewhat in disbelief. I understood where the numbers came from. It was laid out very clean. But I also looked at how much S&I was charging me. And that's what made me feel comfortable moving forward. You know, now I'm on my second year with S&I, and they've saved me eight to ten times what I paid them. Your co-host, Mitch Salanti.

We're here with strategic navigators where we save entrepreneurs 40 to 60% on their income taxes. And I'm co-host Adam Dersen. In today's episode, we have Eric Payne. He is the owner and president of PR Design Build here in West Michigan. Eric, welcome on. Yeah, thanks for having me. Appreciate it. It's a beautiful day here in Michigan.

Yeah. So being in the Midwest here, we got some good weather going on here. We're happy about that. Mitch is out there in California. Super sunny. But really we wanted to get to know you a little bit and talk about your business and how you got to where you are now. And at the end, we want to talk a little bit about your process of coming on as a strategic navigator's client. What that looked like for you, maybe some questions or skepticism that you had and just ask you some questions about that too.

So again, thanks for coming on. Yeah. No, thanks for having me. Want to tell us a little bit about yourself, how you started? Sure. Yeah, in short form. My family has always been in real estate and construction. And that is what brought me into the industry at a really young age. I started our construction company at 18 years old. Never had the intention of continuing this as my career. It was more as a stopgap while I was attending college. As I was going through college, some things changed there. I found out that I really enjoyed finance and accounting. So I decided to pursue an MBA with a finance concentration.

By the time I graduated with my MBA, I believe I have three full-time employees. And I decided that I would continue the construction company and put all my effort towards that business and see if I could turn it into something worthwhile. I believe that would have been 2013, 2014 when I made that decision. And today running running a business while you were in school to get your master's in business. That's right. Yeah. Your own self-teacher. And I will say for those that think that's interesting, what really helped me was that I was taking night classes.

So by taking night classes, the majority of the students are students that are already in industry and have come back. I feel like most of the people I chatted with were in their 30s and 40s, some in their 50s. And this was also during a time where our economy was fairly weak. So I was in college from 2006 to 2013. And I could think about there was a lot of engineers from General Motors that GM paid for them to go to college or go back to college because their business was soft and they wanted to keep some of their employees. on. I remember a bunch from foremost insurance being in my night classes and their company had a program to push their employees back into school. So I think that's really what kept me going is that these 30, 40, and 50 year olds are saying, hey, get your MBA now. You know, this is invaluable

information and your degree is something you'll always have. And also, you know, during breaks in class or after class, it's just interesting hearing their stories. And I think that it just inspired me to continue on this path of entrepreneurship and being self-employed and kind of creating my own destiny. Did you always want to do that? Like from the, you know, from the start, you said you started a business at 18. You know, did you ever want to be an employer? or did you always want to have that freedom?

Back then, I don't think I had a clear answer to that. I remember joking with people and saying that I wanted to be a millionaire at a young age. So there was always aspirations for creating my own business or creating my own future. But I didn't say to myself or anybody like, I don't want to ever work for somebody. So I did have a couple jobs when I was young. younger, you know, 16 years old, working for an excavating company. I worked in an automotive garage. So I had a little bit of experience with working for someone. I did think that I was going to land in the financial field somewhere after college. I also thought that maybe that would help

me with growing a real estate portfolio and building a company at that sector. But I think the other part, too, is that during this time that I was in, I was in college, college. I'm speaking to people that are losing their jobs or, you know, they, they don't know how they're, how they're going to make ends meet. That was an eye-opener. Like, well, if I'm in charge, I can only blame myself. That's a mature mindset for an 18-year-old. I found really quickly that I was fairly mature for my age. I remember my first accounting class and the first question is who here knows the difference between a debit and a credit. And, I didn't understand that a normal 18 year old had very limited understanding of general accounting. I also found that I wasn't going to make it very long in college if I was hanging out with the normal 18 year olds. Hence why I switched to night classes so I could chat with people with a higher level of maturity. I would say I was fortunate to be raised.

My mother was a bookkeeper. My father bought and sold real estate. So I was raised with, you know, table discussions being, we're out of money this week and next week we've got an influx of a few hundred thousand dollars because that's just how the real estate world worked. Yeah. So thank you, Mom and Dad for passing that along. Yes, yes. Hopefully they listened to this because I had a long period of time that I didn't give them a whole lot of credit. But now I realize that indirectly they helped a lot.

Yeah. Awesome. Yeah, shout out to Mom and Dad. That was right. Yeah. So let's back up a couple steps. You have some hobbies. You're a country boy at heart like myself.

I grew up on a farm, if I'm not mistaken. Talk just a little bit about your hobbies, what you like to do when you're not working. I love to travel. I love hunting and fishing and hiking, running. I've been very fortunate that I've been able to hunt in Africa and Argentina and New Zealand. I've been fishing in Belize and Alaska a couple times. I just, yeah, I just love it. There's some photos behind me here on the wall of just, you know, pictures I took even with a cell phone of just beautiful, beautiful scenery that maybe no one else has seen from that same angle because I get dropped off with a helicopter on the top of a mountain and say, we'll see at the end of the day at the bottom.

You know, it's really cool. It's also challenging, and I think that's why I enjoy some of these hobbies. You know, it's whether it's fishing tournaments where you've got eight hours to beat everybody, you know, or, yeah, getting dropped off on a mountain and you're there for the day and you have one day to, you know, try to harvest an animal. So it relates a lot to business in terms of just a constant game, love and a, a trance. attracted to doing hard things. My girls, I have two young girls, and my wife and I, we love to boat as well. So we have a boat, and my in-laws have a cottage on a lake.

So we're outside almost all the time. And we have UTVs, ATVs, we have chickens and rabbits at home. We have 24 acres at home. So love the outdoors. I love that. I want to know specific, so I'm assuming in New Zealand, you're hunting red stag. Yes, sir. I harvested a red stag with a bow.

I harvested a tar in the mountains with a gun. And I harvested a follow deer with a bow. Okay. Wow. What about Argentina? What were you hunting there? Argentina was actually their dove hunting. Interesting.

Okay. Yeah. It was an amazing time, somewhat stifled, I would say, or we what happened was is this was during a snowstorm i was supposed to go there and i got stuck in and my flights got canceled twice but then i got stuck in texas and an airport and then stuck in oh man i can't remember what city now brazil peru peru brazil something who knows but it took me days it took me days to get there so um so i need to go back to argentina and to hunt again so i'm back hunting and not stressed out and sleep deprived.

Yeah. What an epic trip though. I also want to know what you hunted in Africa. I could talk about your hunting trips the entire time. I want to know what you hunted in Africa, too. Yeah. So Africa, I went there in 2016 or 17. My personal income was a little lower than now.

So we tried really hard to hunt on a budget. I shot a blue wildebeest, an Impala. and a warthog. And it was an amazing trip with my father and two of my friends and can't wait to get back again. Yeah, wow. Do you do, do you come out west and do some hunting? Like, do you do any elk hunting in Utah or Wyoming or anything like that? I have not yet.

I am working on and have paid deposit for an Arizona elk hunt. Okay. through a special case permit. Since this is going to be on the air, we'll leave it at that. But I hope to get into a little bit more hunting like that. I've been deer hunting in a few states, been turkey hunting in a few different states. But the interesting part is all of the hunting seasons overlap each other.

So it's like I'm giving something up. Man, I bet you've got a ton of cool stories going into that. I love the outdoors. I've only been hunting once. I just didn't grow up doing it. Grew up in the suburbs of Chicago. But like Adam said, I live in California. So I get into the mountains as much as I can and rock climb and backpatch.

You have spearfishing too. Don't forget that. Yeah, yeah. That's awesome. Yeah, that was went to the Channel Islands this, this summer. Shout out to Lee Mackie, if he ever listens to this. took me spearfishing off of the Channel Islands. That was pretty epic.

That sounds awesome. I've never done it, but a lot of people have mentioned that I should because it combines by two of my passions, hunting and fishing. Definitely. Yeah, for sure. So going to passions, you started in real estate. Did you have a passion for construction? Do you do real estate and construction?

How did you get to where your focus is now? Yeah, it's interesting. of that I love what I do every day. Just recently an employee of mine said to me, like, I don't get the Sunday jibbies anymore. What does that mean? And I just didn't even realize to how recently that some employees or some people dread what they're doing on Sunday and they dread going to work on Monday. I've just never had that.

I've been very fortunate that I can create my own daily routines and tailor it to what I really like. and I have found that I'm passionate about solving problems, right? I love it when a customer calls and says, you know, I don't have enough space in my home. How can we economically solve that? Or I have four grandkids now and our dining space isn't big enough. We want to remodel our kitchen. You know, what ideas do you have that can solve it?

Or, you know, I had a really unique one last year where, a homeowner really wanted more outdoor space that was covered and their house was built in a way that it was going to be very challenging to add on to their home and we came up with a solution. So back to passions like I'm passionate about solving problems. I'm passionate about building quality products passionate about real estate as well. It all ties together. Love, you know, whether it's building new homes or taking a farm field. and turning that into a small little neighborhood. It's really just a lot of fun.

And I've found over the years that it's easier for me to find good team members that can help with the building process, but it's much harder for me to find people that can solve these problems and visualize what this future idea might look like, like pre-going onto paper. So I've just kind of kept myself in that sector. So what all does PR design build do? Remodels, new home build, custom home build.

What all do they do? Yeah. Majority of our business, like last year, I think 87% of our business was, in terms of revenue, is focused on middle to high end home remodels ranging from, we'll say, 50 to 550,000 last year. And we did build one new custom home. and some light commercial work. The process that we have in place is we are going to take your project from idea to completion.

So that's the key. It has to fit that model. Someone has to call us and say, we have a problem. Somebody needs to help us build out the framework, and that's many times design, architectural and scope development, all of the planning and documentation on the front end. And then we'll help them with that. And then our team will manage the build project and build it.

And that's really what we specialize in. It's less important to me if we are remodeling a travel agency or remodeling a homeowner's lakehouse than it is making sure that we are solving problems and providing a good service from idea to completion. Yeah. You guys do a beautiful job. I was looking at your website and there's some gorgeous remodels there, whether it be a kitchen or the outdoor spaces are really cool, especially. Yeah, thank you, Mitch. We appreciate it. We've been very blessed that we've been presented some really cool projects the last couple years.

And it seems when you do one really cool one, it starts to attract a lot more. I bet. People talk. They do. People talk. And the outdoor projects are actually my favorite because more people. get the opportunity to see them, right? Like a kitchen, they get to see the photos, but I've got a couple houses on Lake Michigan.

One of them's on a boardwalk in Holland that is publicly owned. The boardwalk is. So anybody that wants to walk by this house and see our work and do it any day they want. And that is just an amazing feeling when somebody is just walking by and they're like, oh, that's beautiful. And they have no idea that maybe I'm the one that did it, but they get a just. chance to see it. That is really cool. How do you see you guys growing? What do you want to change in the years going forward? Yeah. So we're always evolving and picking directions and constantly changing

the directions based on where we're seeing resistance. So in 2023, we felt that we were at our capacity for remodeling projects with the size team we had. So we sat down and did a vision exercise actually at the beach and sat down with a white board and just chatted about our next level of growth to grow the remodeling side, who and what does that involve. And we found that it's going to involve quite a change to our office staff in terms of adding more layers of leadership. So we agree that at least for the next year or two,

we are going to try to focus a little bit of more of our time and efforts on growing the new construction and commercial side of the business. Still trying to follow the same idea to completion model. But in my perspective, new homes are really easy compared to remodel work. That allows us to grow without adding multiple. new staff members to the team. Gotcha.

And those remodels, you get a good picture of what the house looks like on the outside, but when you start to open it up, sometimes you never know what you're going to find. Yeah, that's where it's a little tricky. We have a $250,000 second story remodel in Heritage Hill and Grand Rapids we're doing right now. And the schedule changes two to three times a week because we are in that process of, you we're opening things up and we find, oh, geez, this has been framed incorrectly for, you know, 125 years or here's a fire hazard with electrical or there's missing insulation.

The unknowns are kind of fun, but the downside of that is they're hard to plan around and it takes a lot more management time than labor to work on a project like that. Like using just that volume, a $250,000 second story remodel is going to take 15 to 20 hours of project management time per week. A $250,000 detached apartment that we would build is going to take three hours a week of project management time and have no unknowns because it's a brand new space. Yeah. That's interesting. Well, Eric, let's transition a little bit to your experience with S&I. And how'd you meet this guy in the middle here?

How'd you meet Adam and how'd you eventually join the team? And what was that process like for you? Yeah. So I'm the vice president of the Lakeshore Home Builders. And Adam here is our treasure. But previous to all of that, I was introduced to Adam from our CEO of the of the HPA, Brittany. She connected us.

And, yeah, I think that just turned into Adam's showing up in my office one day. And he might have showed up a couple different times before I agreed to have a legitimate conversation with it. You know, and for those of us. You kept telling me to come back. Otherwise, I wouldn't have come back. And for those of you that don't know at a personal level, I mean, he's a great guy. and he's not a pushing salesperson and just kind enough and sincere enough that you will invite him back.

Thank you. I'll pay you later for that. Yeah, thanks. You're right. So that's how my initial connection started with Adam. Adam also mentioned a couple of customers that he already had that I also knew personally. So I was able to reach out to one or two of them and chat about their experience that helped give me, some assurance that what S&I is offering is going to be beneficial to myself and our company and our family. Where was your level of skepticism when you first heard, whether it was from the CEO or some of the guys you know that this company saves, you know, 40 to 60 percent on your tax. They're going to cut your tax bill in half. What kind of skepticism did you have? Well, I mean, it's too good

to be true, right? I mean, that's the first thing that comes to mind. It's like, if it's that easy and they can really do this, then why am I the first person in my small group of friends that own businesses that's thinking about this, right? You would say everybody, everybody we were working with S and I are a similar company if it was that simple. That was my first level of skepticism. And then from there, after chatting with a couple of people that have worked with you, I realize it is, it's simple, but it is complicated. Like there's a lot of processes and paperwork and policies that do need to be adhered and followed and, you know, monthly or biweekly pieces of information that you need to be

handling and taking care of. So that allowed me to then realize why there's a benefit to work with someone like yourself and work with S&I versus try to figure this out on your own. And be your own guinea pig. That's right. That's right. Yeah, be your own guinea pick. I mean, I've had a lot of people that I've referred to S&I, probably 20 to 30 by now.

And I've lost count on how many have actually signed up to work with you guys. But the one thing I tell them is that the more people that work with S&I, the more comfortable I feel. Because I know you're doing a good job for them. I also know I'm not the only one that you're doing a good job for. and if there was ever a slight misunderstanding in our huge IRS codebook, that it makes me feel better knowing there's multiple business owners I know that may be navigating that together with S&I. So what were some of the first questions?

There's typically someone that like a business owner leans on, a soundboard, not to go ask questions. if you don't mind sharing, who is that person for you? And what kind of advice did they give you? Yeah. So when it came to S&I, it was my father-in-law. My father-in-law has owned multiple businesses and sold them. And he's very conservative in many ways.

He's a very honest man as well. So chatting with him was great because in this day and age, and when it comes to saving money on taxes, I know of many people that do it the wrong way. Yeah. You know, they, they may write off things that are gray area. They may pay for their wife's car. They may modify how much an invoice really is.

Like, that's all wrong. So by using my father-in-law as a sounding board, it was great to just kind of run through each of the items that S&I presented and said, yeah, this makes sense. It's legal. It's right. right here is where, you know, the case studies that they provided, where we can do this. And it was great for him just to be one person that said, yeah, I completely agree.

Everything that they've presented here is allowable for the tax go. Sounds like you have a good circle surrounding you. I do. I do. I'm looking to, to widen that circle. I really do enjoy chatting with people like yourselves. I enjoy chatting about business and goes back to solving problems. Sometimes we don't know what problem we're solving until we chat for 15 or 20 minutes and then we come up with one. Yeah. Yeah.

So, Eric, I'm sure that your tax bill prior to working with us was pretty significant. So I'm curious what your reaction was when you had your analysis put in front of you. Because I think a lot of people try to act cool, but inside they're like, this can't. This is ridiculous. Yeah. I felt that way. I'm very directive when it comes to making decisions. So I seen when S&I presented this to me and when I seen how much S and I could save us on our tax bill, I was shocked.

And somewhat in disbelief. I understood where the numbers came from. It was laid out very clean. But I also looked at how much S&I was charging me. And that's what made me feel comfortable moving forward. Even if their presentation is off, I feel very comfortable that they'll be able to save me the fee that I am paying them. So if I could go through this exercise and break even, it's well worth trying.

And now I'm on my second year with S&I and they've saved me eight to ten times what I paid them during that time. And it's been great. But yes, there was skepticism at first, and I didn't really need to know every little detail. I just needed to know I was going to be able to cover how much I was paying S&I to go through and formulate and create these policies and procedures and plans to implement the tax savings. Give me a good idea there, Eric. I think we should start charging monthly or annually instead of just a one-time upfront fee. I think that that is something I've considered.

Not a bad idea. It's a great idea. take your fee and cut it down by a third, right? And charge it every year. Have that be an annual fee. So by year four, you are your money ahead. Yeah. That's not a bad idea.

It's funny you say that because to your point, people will be like, what's your fee? I'm like, oh, it's roughly, you know, it's always less than 50% of your first year savings, realistically, a lot less. And it's once. It's one time. And they're like, no, no, no, what's the fee the next year? year. I'm like, there isn't a fee. They're like, yeah, but what is it? I don't know what to tell you here. I don't know how else to explain this. It's funny. It is, it is an odd feeling and I, I do think that what happens is that people love the S&I team, right? There's, whether it's

Joshua or Sunjay or Mitch and Adam here, I mean, it's just the whole team is great. Everybody have interacted with has been great. But there's other aspects of our business that we could use help with. And that's where S&I also can generate additional revenue. So I've had, you know, your, your accountants and your attorneys help me with various estate planning things and different business structures not related to just saving taxes. Liability was a big one, right? I reached out to Sunjay from your team and said, hey, I've got some ideas here concerning

liability. Should I use my own attorney or can you guys help? and it's like yeah you really don't even need an attorney we can we can help walk you through this pretty simple with X, Y and Z so obviously get paid for that

so there's that that is a really nice aspect of it I know that some of my friends and acquaintances that are working with S and I are using your accounting team and I don't know what to to what capacity but

I'm sure there's a an annual fee or some sort of fee structure there. So S&I can find ways to increase revenue through these other avenues. And as you guys continue to grow, I'm excited. I hope there becomes a professional development and coaching arm of S&I. You know all the right people. Yeah, that's a great point. And that's one thing that's been nice about having such a wide array of business owners

is that, you know, maybe you're an HVAC over here. We know another HVAC company that's not a competitor of yours. It's multiple states away, but they were in your spot five or six years ago. We can connect you to. And you can talk about how to scale, how to grow. Business owners, for the most part, are more than happy to have a conversation like that and help others grow, too, which is awesome. Especially in the trades. I love working with you guys in the trades.

I've told Mitch that several times. Yeah. Yeah. And I think that what's kind of neat is that you also work with business owners that are exiting. And a lot of those guys, they don't know what they're going to do with all of their free time once they've been able to leave their company. They all think that being retired and hanging out the beach and on the golf course every day is going to be the answer. But then after a couple weeks or a couple months, they realize that it's not as fulfilling as they thought. and connecting those guys through some sort of even a paid professional development or coaching agreement with some of the younger guys like myself would be absolutely amazing.

And I have one group I'm involved with now and I'm interviewing with the second. And each time I'm getting involved with these groups, I get a little bit of something, but I feel like they're not tailored for the small guy. They're tailored towards the companies that are doing, you know, 150 million a year. in gross revenues or more. They have 50 employees or more. And I just, you know, they, we have real problems. Like, we don't have an HR team. Like our office does HR when she feels like it.

And then when it gets out of her comfort zone, then she pushes it someone else. So those are some of those things, too, that chatting with these guys that have been through that growth stage can help guide us. They may say, I hire an outside HR firm right now. same as what you did with S&I. You hire the experts in tax planning, hire the experts in HR. Or they might say, you know what?

Hire someone part-time that has HR background. And hopefully you grow fast enough that you can give them a full-time job before they get sick of you. And that's the cool part about being a part of such a great network. You know, and S&I has so many good customers that could help some of these smaller guys like ourselves. I'll tell you for sharing, Eric. This was 35 minutes of business 101 from the start and learned a lot about you. Thank you for sharing.

Yeah, I love it. I loved hearing the background of PR design build, hearing some of the hunting stories and the stories with S&I was all awesome. So thanks for sharing all of that. And if you have any closing thoughts, by all means, you know, floor is yours. Yeah, I want to say thank you for having me. My interactions with everyone at S&I has been just unbelievable, great team. Adam and Joshua have flown with me out to Portland, Oregon.

I mean, I feel like they are part of the family. They've met my kids. They're always there. I can always connect with them. I've sent them numerous business owners, and every single one of them has come back and just chat about how great S&I team is. I urge those that are listening to this to reach out to S&I. And even if you're not looking to work on different tax planning strategies today, there's still a great group of people and they have connections to many others in the industry.

Thank you. Thanks for saying that. Thanks for coming on. Yeah, thanks, guys. Thanks for listening to Navigate. If you're interested in learning more about strategic navigators, feel free to click on the link in the description.