425 | Building A Profitable Business with Purpose - Jeff Rutt

Jan 24

[00:00:36] Chaz Wolfe: What's up everybody? I'm Chaz Wolf gathering the King's podcast. Coming back to you here today with another king on the stage. My brother Jeff Rutt. How we doing? Jeff?

[00:00:46] Jeff Rutt: Good. Thank you, Chaz. Great to be here.

[00:00:48] Chaz Wolfe: Of course. I'm happy to have you here. And, your experience in, in, uh, your industry is gonna be warmly welcomed. we have, people from really all across. The, the world and industries chiming in here for the show, and I think that your experience is gonna give , some great feedback, uh, to them.

So tell us, Jeff, what kind of business do you have?

[00:01:08] Jeff Rutt: So, really two. So I'm, I am a, dairy farmer turned home builder. So I, we build about 500 homes a year here in . South Central Pennsylvania, Northern Maryland, and just started division in Charlotte, North Carolina. And I also started a, Christ Center microfinance organization about 26 years ago called Hope International.

And, we serve, families on the front line

[00:01:29] Chaz Wolfe: As soon as you said 500 homes a year, and then the fact that you're opening up another location and then another, you know, endeavor, uh, all of that seems a little bit mind boggling to but we might have listeners thinking that, wow, like this is, this is a guy I can run with. , lemme get started with, kinda like the deeper inner parts of, of Jeff. And I wanna know, I mean, 500 homes a year.

That's kind of a big deal. That's a really big deal. and then all the other work that you just said doing in other countries, why, what, what, what wakes you up in the morning? What's beaten deep down inside of Jeff that makes you do these pretty amazing things?

[00:01:59] Jeff Rutt: Yeah. Well, I think it's, it comes out of, my faith. I, I really do believe that, you know, we're. We're, commanded to to love God, love others, and, how do, how do we do that in a way that really serves them well? both in our for-profit business, our, our home building business, but also in the, in the work that we do, around the world through Hope International.

How would we want to be, uh, served? You know, I came from a very humble beginnings. you know, I grew up on a dairy farm and worked really, really hard, learned at age 10. That, the value of hard work and discipline from my dad, which I appreciated years later, I didn't really appreciate it that much then

[00:02:40] Chaz Wolfe: in the moment. You

[00:02:43] Jeff Rutt: So yeah, I mean it's, I do, I, I, what, what kind of cranks my tractor is impact. How do we impact people's lives and, and do that in a way that doesn't hurt them, you know? It really, it truly helps them.

[00:02:59] Chaz Wolfe: Yeah. I, I love the definition of success, given by some of the old names, including Napoleon Hill, but oftentimes it's tied to getting exactly what you want. there's a caveat. As long as it a serves others and or doesn't harm anyone else. And so there's, there's real unity and harmony, those kind of words that come together and they feel a little bit fru.

but that's exactly what you're saying is like, I wanna be able to go achieve personally. Okay, fine. But I also wanna be able to impact others with the greatest positive, you know, ripple.

[00:03:34] Jeff Rutt: Yeah. Yeah. There's a, there's a book, if you haven't had a chance to read Toxic Charity, . Robert Lupton is the author. He talks about the five stages and personally, I was right there.

I was a toxic charity addict back in the mid nineties, looking to send containers of food and medical supplies, and we thought we were well intended. We were just trying to gather, you know, raise, you know, gather everybody together and send stuff to, folks that were in, in, in, in, really in deep need in Ukraine.

And we did it for five years in a row. And Robert Lepton talks about it in his book, talk to Charity, the that first gift, there's appreciation. Everybody's like checking the box saying, this is awesome. The giver, the receiver, and then that second gift, there's a little bit of anticipation. . then expectation, then entitlement, then dependency, and it has that kind of downward spiral and it's well intended, but inadvertently causes that, downward spiral of dependency and, and, uh, really

It kind of drove us to look for a solution and, uh,uh, pastor we were working with at the time in Ukraine, right where the nuclear plants are now, that, uh, invasion is, is all over, all over the place there. And, uh, to the neer river. Um, pastor sent me down and said, Jeff, you are helping is hurting.

and I remember thinking, wow, this, I put a lot of time and resources and energy and passion into this, and you're telling me that it's actually hurting And I, and it just, it was a, that one comment shifted our whole approach, to go down a track of really looking for something that restores dignity and uses the gifts that

The, the families we're serving have in their hands and that they can, you know, support their own families. Uh, we, you know, can kind of really pursued this idea of, of Christ Center Micro Enterprise Development, where, you know, Anastasia and Burundi, who couldn't afford to send her two little girls to school at the time, uh, leveraged a $20 loan into a wedding business.

She now leases out 200 chairs, 200 place settings, 200 baskets. And three wedding dresses, a small, medium, and large, and she's thriving and dignity.

[00:05:49] Chaz Wolfe: Wow. okay. Well surely if we can help. That person with a small, medium and large run a successful business with some plates. we can help some people here who have way more resources than that. I mean, if that didn't just remove excuses for every single listener. I, I don't know what will ,

but I appreciate, just the, the opportunity not only just to hear the heart, but . Also to kinda go a little deeper there, what, what do you think, I guess that's tied to real impact? So for you, I guess it was just a further definition of what real impact is. It wasn't just throwing money at a problem, it was going, do I really want to help and how does real help, you know, look, I guess.

Right.

[00:06:29] Jeff Rutt: Yes. Yes. Yeah. Uh, Flicker wrote a book when Helping Hertz and, you know, we, we, I think too many times here in the west have, again, good intentions and we send all kinds of stuff and it really cripples, it uh, you know, Lupin did a , sto study in Atlanta a few years ago when there was, uh, was a group of, well-intended folks that just spent a lot of time and money delivering Christmas gifts.

To families in, you know, some really struggling areas in, in down, you know, in the, some of the, the harder parts of Atlanta. And as they were coming in, what they noticed was as they were coming in the front door with these Christmas gifts for the kids, the dads were going out the back door in shame because they didn't wanna pee any part of that because they knew that it was really their

it was, that was on them. They should have been delivering the gifts. And it was just, it was like too much. It was, uh, it actually ended up hurting. So there's a, there's a lot of, uh, situations where I think our helping can actually hurt. And we want to just, we wanna love on people the way we would want to be loved.

And I think, and I don't know about you, but for me, I don't, you know, given the choice, I wanna try to figure out a way to use the gifts that God gave me to . To be productive and to supply the needs of my kids and, you know, see them be successful as opposed to having somebody else step in and do that for me.

[00:07:55] Chaz Wolfe: yeah. I mean, in essence, you're teaching 'em how to fish. I, I want you to take this principle that you've clearly articulated in, in how it can be harmful in a way of . You know, philanthropic activity. What about your business? When you learned these things over here on this side, how did that change things for managers, executives, even, you know, labor force in your business?

'cause I mean, building 500 homes a year, you've got maybe just a couple of employees.

[00:08:20] Jeff Rutt: Yes, we do. Yeah. Yeah. We have about 150 employees, but it didn't, it didn't start that way. You know, I , I, as I said, I grew up in a dairy farm, kind of a dysfunctional. childhood. Uh, I was 13, my mom picked up my three younger siblings at school one day and left me a note and said, Hey, if you wanna join me, call me.

Uh, decided to stay on the farm with my dad and kind of was spent the, my teenage years broken and leaning into learning how to milk cows and, and, uh, you know, how to lean into my faith in Jesus. literally bought the farm when I was 20. Before I knew what that phrase meant, nobody told me.

[00:08:58] Chaz Wolfe: Yeah.

[00:08:59] Jeff Rutt: So my wife and I spent the next 10 years struggling a lot on the dairy farm, just making ends meet, making monthly payments, and uh, interest payments. And, uh, out after 10 years, um, realized, you know, 300 bovine, uh, very needy. Uh, we were looking for something with, uh, lower risk and less hours.

So we were thinking maybe real estate and home building. Would be a good choice.

[00:09:22] Chaz Wolfe: No. Yeah. What year was this again?

[00:09:27] Jeff Rutt: Yeah. So that would've been like early nineties, uh, eighties, early nineties. Yeah. So, uh, very, very small, uh, no Capital Zero. Yeah, negative capital. Actually, . So we started a very small building, you know, just a, a handful of buy levels. You know, we were selling homes at 69.9. . Now our kitchen upgrades cost that much, you know, so, uh, were selling buy levels at 69 9 in the early nineties.

Uh, we built 12 homes our first year and, uh, were all pre-sold because we couldn't afford to build 'em as spec. Uh, had 'em, we sold 'em, and then built 'em.

[00:10:04] Chaz Wolfe: There's a lot to that story. and I want to kind of drive, drive, some, some energy towards that. What do you think, along that, I mean, you, you've kind of painted this picture of, you know, um, humble beginnings and kind of a slow start. 12 homes in the first year. I don't know if I would consider that slow.

but, but I love the way your approach was. It was conservative. And so what do you like, I wanna dive into that. You said you sold 'em ahead, but, and I don't need the, the tactics on how you sold 'em, but what would your message be for the audience today if they're either starting or let's say in the first five or so years of the business? What, what did you learn through that process that you can, that you can gift to them?

[00:10:44] Jeff Rutt: of the things I think is really a key business principle. Um, I, you know, again, I barely graduated from high school, but I'm, I'm an avid reader.

I'd love, I'd love to read, probably read two books a month. Um, but one of the things that I've tried to focus on through the years as a business person is to think like a banker. Bankers love debt to equity ratios that are very conservative. So it super simple.

A one-to-one debt to equity ratio. You know, if, if you, if your house is worth a hundred thousand dollars and you owe $50,000 on it. a one-to-one debt to equity ratio. trying to keep that balance in mind through the years, that's been a, a principle that, um, has, served us well. I think, you know, , of the things that we've always tried to follow metrics, you know, keep our lead.

I'm a firm believer in the, the four disciplines of execution. Uh,Chris Chesney's book, uh, 40 Dx. Yeah, but I didn't have that book in 1992, but we kind of followed some of the principles loosely, and we've been able to refine that in recent years. But he talks about, you know, there's four disciplines having that wig or that wildly important goal, like what's your goal?

If it's to build 12 homes a year, or if it's to sell, you know, 20 cars, or if it's to make a thousand widgets. Or serve a thousand people, whatever, what's your goal and then what are the lead measures to get to that goal? So if your, if your goal is to lose 20 pounds, you don't just get on the scales every, you know, two hours and see if, you know, see if it's happening.

You start measuring things like diet and how much you're ex, you know, minutes in exercise. So that lead measures that second discipline. So wig first, discipline, lead measures second, and then the scoreboard having a compelling scoreboard. Do you ever notice when you're out playing basketball, pick up basketball?

Uh, nobody's keeping score. How it changes when the score starts,

[00:12:40] Chaz Wolfe: Yeah.

[00:12:41] Jeff Rutt: somebody starts keeping score. All of a sudden intensity goes up, keeping start diving for loose balls and like elbowing to go in for the layup. So having a scoreboard is compelling. And then that fourth discipline is that weekly accountability with the team, whether you have a team of three

[00:12:56] Chaz Wolfe: Yeah.

[00:12:57] Jeff Rutt: or 300, having a weekly accountability with whoever your team is to say, here's what, here's what I'm committed to do. That's outside the whirlwind this week to move, uh, the lead measure towards that at wildly important goal. So I think that that was important early on, but I do think having, you know, good work, work ethic, really, uh, focusing on loving people.

you know, it's it that it comes through.

[00:13:26] Chaz Wolfe: I think you're, I think you're spot on with that inside of the four steps that you just gave to us. I, first off, super simple. Love it. there's many, operating systems that follow a similar framework, and so I think that that's great. How, how, how have you navigated from each one? Because I think principally it makes sense like, okay, I have a goal.

Then I set some, some trackables. I have a scoreboard and I, I'm drawing a blank on your last one. What was

[00:13:52] Jeff Rutt: Yeah. Cadence, accountability. Yeah.

[00:13:55] Chaz Wolfe: The accountability, having a team meeting and I, I think every entrepreneur, well, I hope that they've heard something like that, but . We both know that they're probably not doing it

[00:14:04] Jeff Rutt: Yeah.

[00:14:05] Chaz Wolfe: And so as simple as it sounds, I, there's a lot of business owners that I know that don't do all four of those or, or any of them. And so for you, maybe as you were learning some of those things, even before you read that book, was there a gap in that for you? Or did, was there something inside of you that kind of led you to that?

Are you just high tenacity? Like how does, how have you been able to do this successfully that they can take away from

[00:14:26] Jeff Rutt: Yeah, Of the principles you can take away is, uh, at least for me, I need to be reminded of some of those things on a weekly basis. I think we're wired to do a lot of things weekly. think it has to be like this huge, you know, uh, amazing meeting, but some kind of a check-in with your team, whether it's, um, it, what works well for us is.

Checking in as a, as a leadership team, but then all of our frontline teams checking in with them, you know, themselves individually, Lencioni, uh, about a huddle. Uh, There's a lot of operating systems that out there, as you said, but 40 x you know, calls it just the 40 x meeting could be 20 to 30 minutes a week.

I do think there's, um, lot of value in . . You know, I know for me personally, our meetings are Thursday morning at seven 30 and every we, if I have to prepare for something for that meeting every Wednesday evening or late in the day Wednesday, I'm like, it can't be Thursday already.

So, I mean, just our natural human tendencies are to just kind of say, oh, I'll get to that later.

Uh, been a while since we had that meeting. Oh, are we still doing that? But if you have it set on the calendar and you say, okay, . No matter what happens, somebody's sick, somebody's traveling, whoever's here, we're still having the meeting. I think there's some value in that. Uh, regular meeting.

[00:15:48] Chaz Wolfe: Yeah.

It happened today. We have our weekly meeting, for gathering the Kings, right, right before this podcast actually, and it happened today, we set some quarterly goals. We're here in the first week of December recording this right now. And so what does that tell us? We've got about three and a half weeks before the end of the year and quarter.

so it's like, okay, we check we're, we're checking in on the quarterly, you know, goals every single week, but it, it was like, oh. If there's three and a half weeks left, I should put some more elbow grease into that one right there. I've been kind of been working over here on this one. I got this one though that I've been kind of pushing on.

I shouldn't push on it any longer. And who, like you said, basically would I have even recognized it if, I mean it could have been January by, I'm like, oh, dang, I didn't get that done.

As opposed to, I have not only a team, but then it written and we're, we're looking at it every single week, and now I'm, now, I'm time sensitive.

I can pay attention. Go, okay, well I, I need to, I need to actually move that up in the priority

[00:16:43] Jeff Rutt: Yeah.

[00:16:44] Chaz Wolfe: if, if it's something that needs to be moved up. Otherwise, maybe we've established that, that it's not meaningful and I need, and I need to let it go. I don't know. But again, it's still the reflective piece there is based on the, the regularity of checking

[00:16:56] Jeff Rutt: Yes. Yes, absolutely. Yeah. And I think that ties . And to almost any business, especially when it comes to, you know, things that you don't necessarily, we, we human, the human nature is, we put things off that we don't really like to do that much, but if there's some kind of cadence of accountability, if we, you know, have been telling our team for the last three weeks, this is my commitment, it's, and we know there's a meeting coming up.

It's a, it's a good reminder and a good, uh, motivation to, to make that happen.

[00:17:27] Chaz Wolfe: Exactly what, what do you think, as an individual, you said you're, you're a big reader and obviously accountability with other people is huge. I'm a big part of this. It's actually why gathering the kings exist. Not the reason, but one of the reasons as a peer group, when I say things out loud in front of other entrepreneurs, especially high performers, I know they're gonna do their thing.

And I'm not gonna be the guy that comes up next month and says, sorry, dude, I, I didn't, I didn't do it. There's major power in that. How, how are you seeing that in, in your organization? And then maybe one step further, you're opening up another location, not just down the road, like in another part of the country.

How does that extend now to a another location that's completely remote from you?

[00:18:06] Jeff Rutt: Yeah, well we're, we're still doing those, uh, those meetings now, I think it, and we do 'em, you know, virtually. However, I think it starts with having, you know, as . Jim Collins talks about in good to degree, you know, having the right person on the bus, in the right seat on the bus, you think it's really important to, and we haven't always gotten that right, you know, through the years we've made some, uh, know, we've, we've made some wrong turns.

Uh, I think continually looking for ways to, improve your team so that you have the best possible. a probability of surviving the downturns and also, uh, advantage of the opportunities in, you the good markets. So I think having the right person in, in the right places is, important.

Um, you know, Lencioni talks about the hungry, humble, smart, and. Not all of us are gonna be, you know, 10 out of 10 on all three. Hungry, humble, smart. I do think humility is super important. Um,

[00:19:11] Chaz Wolfe: Yeah,

[00:19:12] Jeff Rutt: you know, I think, uh, intersection of authority and vulnerability.

And where, where do those two things intersect? Uh, we, if we have authority, but we're not vulnerable. We're not a good leader. If we are really vulnerable, but we have no authority, we're not a good leader either. Either. And if you really, if for me, if I look at the most incredible example of the intersection of those two is Jesus Christ on the, on vulnerable, on the cross, having all the authority to.

To completely take change history, but deciding to move forward with that. But we're not there, but we have that example to follow and to to be the light of Christ. I do think the hum. Humble, hungry, smart is where you, I think it's really important whether you have two, you're a two person business or you have 2000 employees, the more team members you can have that have the combination of those threes.

Three, starting with humility. think you're, you're gonna be on a good track.

[00:20:16] Chaz Wolfe: Yeah. Yeah. To get more information on that. that's a deal. Team player by Patrick, Lin, you know, you, you say his, his name like I used to Lynn Cone. It sounds awesome. and I was, I was on a training with him not that long ago because, uh, uh, COO uh, and on of our team and myself got certified and his working Genius program, and he introduced himself as Patrick Lynch.

[00:20:38] Jeff Rutt: Ney. Okay, well I learned something new today,

[00:20:41] Chaz Wolfe: I'm like, your name. Sorry bro. It's not Lin. Everybody else out here we say it. Lencioni. Okay. So anyway, you're, you're spot on. A ideal a deal team player, is a fantastic book. Hunger, hungry, humble, smart, super good lens to be able to hire through. We use the culture index, um, as well to be able to kind of give us some additional insights, before hiring somebody, making sure that they are that right person in the right seat, on the right bus or on the bus in the right seat.

All this is super good. You've, you've lent a couple of, little drips here that I wanna kind of sneak into. You're, you're in an industry where, right now, I'm curious about your thoughts, but I wanna go back because you said you started, you know, eighties, nineties, and that, which means you've been home building through a couple of downturns.

Now you kinda mentioned that. So let's talk 2008, 2009. where, where were you? What was happening? What was your mindset? What'd you learn? And then I'm gonna apply it to what's happening in the

[00:21:33] Jeff Rutt: Yeah, Yeah, Some of the, uh, biggest, uh, mistakes we've made and we took advantage of a lot of opportunities. Uh, in that the end of that cycle from 92 to 2006. thought we were really smart and we were just gonna go up into the right, you know, everything was just gonna be up into the right forever.

and then 2007 hit and, uh, had bought a little too much land. Fortunately we kept our one-to-one debt to equity ratio. But we did have a banker sit across the table from me and pushed a file across the table and said, oh, hey, by the way, we'll be needing those loans that we gave you for those 25 models in your 25 communities.

We'll, we'll need those paid back. In the next 60 days? yeah, like right now. Um, some tough times. Fortunately, we had built a lot of good relationships with bankers and, had enough equity to survive. About half the builders in the country did not survive that 2007 to 2010, uh, timeframe. So There was a lot of, fine tuning and really looking at, okay, here's where the market had covered up some process and some procedure, and some, some things we really need to refine and get better at as a, as an organization, uh, that time. Yeah, that was a, that was a big, a big, big downturn for I think the.

[00:22:57] Chaz Wolfe: yeah.

[00:22:57] Jeff Rutt: I think the start starts in the country went from, you know, over 2 million starts of new homes to under 500,000.

It was just went off the cliff in one year.

[00:23:06] Chaz Wolfe: Yes. Yeah, it was a dramatic deal and, and I think it's even more incredible because of that, the fact that you not only hobbled through but then

survived and then have continued, and obviously it's upward and, and to the right, not all the time, but. You zoom out far enough

and it is.

and so, okay, so inside of that little timeframe, I heard you say that, well, maybe not the most important thing, but the one thing that you said, maybe it is the most important thing, is that that debt to equity ratio, one-to-one, is what helped you survive financially through probably one of the hardest things financially in our lifetime.

[00:23:39] Jeff Rutt: Yeah, I, I, think that's one of the things I do think the, the combination of having the right people in the right seats. And, and that have that hungry, humble, smart attitude are, are gonna 'cause you're, there's a lot of things that come at you, uh, during the downturns like that. And You, need the right people around you to, help,, you, uh, survive and to serve your customers well.

Even though, hard, it's super challenging, uh, those times.

[00:24:07] Chaz Wolfe: Okay. And so in, I was gonna say, your, your second piece there that you said earlier kind of ties in with what you just said around people, but you took a downturn, and instead of freaking out and, and basically going out of business. It was a great opportunity to tighten up process, really refine and go, Hey, what?

Okay, so what actually matters here? Let's get rid of the things that don't move the needle. Let's really, really dial in and focus. Would you like to add anything to that little portion

[00:24:33] Jeff Rutt: Yeah, we actually were able to, because of the ability to fine tune and, and dial in, uh, our processes and procedures and also, one-to-one, you know, debt equity. We were able to . purchase a lot of land opportunities in that, the, the second half of that down cycle. So from about, I'd say oh nine to 13, 2013, 2014, you know, we picked up probably 150 different land positions, uh, were anywhere from, you know, two home sites to 50 home sites.

But they were, they were good opportunities that, uh, us grow through that process.

[00:25:15] Chaz Wolfe: , someone else who hadn't planned properly like you, you in essence, I guess, were helping them to get

whatever they could for it at that time, but it was just a great opportunity for you to capitalize. And, and I wanna use that actually as the parlay here because, there's been this looming thing that's coming now for, I don't know, we've been talking about it for almost two years, you know, really since Covid has had been around and, and it just hasn't really happened. Even though rates have gone up. Demand is still very, very high. You're building 500 plus a year.

Tell us what, what's it look like? What's 2024? What's your projections look like? What do

[00:25:48] Jeff Rutt: I no idea.

[00:26:40] Chaz Wolfe: I love that answer. I so love that answer. Thank you.

[00:26:44] Jeff Rutt: I have no idea. And I mean, we're, we're, we're working as hard as we can to prepare for the, know, expect the best, but be prepared for the worst. That's my mantra.

[00:26:54] Chaz Wolfe: Yeah. How are

[00:26:55] Jeff Rutt: So, I mean, we're, we're doing everything we can to be conservative. Uh, the very best people, train as, as best we can. Um, it's a, it's a struggle.

Uh, mean, there's, if, if, if you really look at it, speaking of, you know, vulnerable, every time we look at a land deal in today's market, I mean, it just, it's, it's just crazy. You know what, what we have to, you know, we basically have to bet the farm for every project that's coming up, knowing that . , there's a good chance we're, we're headed into a downturn.

that's, that's part of our, that's part of our business, but it's part of, in, in some ways, that's part of almost every business. So if I think about, if I go back to the nonprofit side, if we go back to the Hope International side, um, about one of our first clients, it was a lady in Ukraine.

Her name was Nadia. And she wanted a small loan, less than $500 to start a clothing store. she did, she was sent. S kind of successful, but not like hitting and hitting it out of the park. But she saw an opportunity to expand into a department selling Portland cement. Now Chaz, you and I can't make this stuff up.

Like you, you, you do normally don't go from clothing to. Portland Cement. But she noticed that the, uh, guys that were selling the Portland Cement were in the back part of the market, and these guys were, had to carry their bags out the whole way out to the curb, to the pickup trucks that were picking it up.

She opened a stand up selling Portland cement right on the sidewalk, like right next to the right next. And these guys are like, yeah, we're gonna buy it here. Same price. We're gonna buy it here. Here's the, the cool part of that story is as a side note, she came in, this was early on, she came in to to talk to our loan officer and she said, this is my last payment.

I won't be needing any more loans because I'm not poor anymore. I. I mean, it was just like, that was one of the things that, uh, said there is a lot of, there's a lot of ramp here. Uh, I think, I think the, the hungry, humble, smart, you, we just need to look at it and say, we can listen to every.

Economists in the world, we can study every possible chart, every possible piece of history, but nobody really knows what's gonna happen in the first quarter of 2024. We just have to be, expect the best and be prepared for the worst, and that that means having the best people, being prepared, having the best processes in place, uh, we can.

[00:29:29] Chaz Wolfe: I think that that's a wise answer, really. It's not just in preparation for a recession. That just should be how we operate our business, right? we should always be hoping for the best and planning for the worst. I think that there's, there's real tactics in there. The thing that, that I pulled away from the example that you gave of the gal, who, who did the loan with you guys in another country, is that even in a downturn, if your product is what people need and you know how to market it, It solves the problem. So make sure that you've got something that somebody needs and you know exactly how to, how to get their attention. housing's not gonna go away. We know that for

sure.

will your creativity on how to get in touch with the people that need a house need to grow?

[00:30:15] Jeff Rutt: yeah, yeah, yeah. For us, a little bit of of it has been over the past, uh. Few years especially, we've tried to differentiate ourselves from, you I'm sure know, the, the national home builders, uh, public home builders are like taking over the market. They own, you know, a majority of the market now, and they're buying up a lot of the regionals and smaller builders, and they're building shelter and, uh, it's, it's needed.

There's, there's a, there's a need for shelter. Um, but there's a little bit of a niche in that. An area between that shelter and the custom home builder, I call the two-liter two letter builder that builds, you know, five, 10 homes a year. So we're kind of in between there saying, you know, we can build hundreds of homes at scale.

We can do that more efficiently and economically, still give buyers choices. So we have tens of thousands of choices that we offer online. . customers can go on and choose, you know, their go, just like their shopping cart on Amazon. Choose any, you know, just about anything you can think of. Uh, have as an option that they can put in their home so they can personalize it.

So that's our niche. As we try to carve out, you know, our, our unique selling proposition, uh, the, the big Publix, which is kind of a race to the bottom on price. And then the, the custom home builders will build, you know, you bring in a newspaper clipping, they'll build almost anything. So we're, we have, you know, 50 plans to choose from and then tens of thousands of options that are pre priced, plea pre-planned, pre-drawn that you can point and click and, and put them into

[00:31:52] Chaz Wolfe: Yeah. I think that speaks to your process, you know, that you just described, you know, you don't have 50 plans with 10,000 options and a website to be able to add things into a cart without amazing people and incredible process to follow. So I think even just that little answer that you gave kind of just casually speaks to the very thing that we were just talking about.

What do you think, um. You know, we've talked about maybe how you survived the, the downturn or what you're doing to prepare. I asked you kind of maybe some things that you've done well in the business, hiring, great people. We've used a couple of examples there. been the moment where you just were bad decision, not your greatest hour, maybe a, a vulnerable moment, you where you got exposed?

I don't know. Tell us about that, that situation.

[00:32:34] Jeff Rutt: Yeah, so probably a couple things that I would think about. Um, mentioned earlier I kind of joked about I bought the farm before. I knew what that meant. I do think that

[00:32:41] Chaz Wolfe: Right.

[00:32:42] Jeff Rutt: remember thinking a couple years after that, that was not a good decision. This was a lot of money and I was really young.

Payments were really high. Now would I trade it for anything? No. Would I go back and do it again for anything? No

[00:32:58] Chaz Wolfe: No.

[00:32:59] Jeff Rutt: but I, I learned so much through the process. I think another, uh, of phase would've been in that, you know. Too much, too much believe in our own press, in that oh two to oh six and thinking, oh, everything's just gonna go up into the right and we're amazing.

And you know, it's, um, we were fortunate. Praise God. We didn't get too far over our skis, but we, we definitely, I. Got a little too aggressive on, uh, purchasing land and expanding too fast. Uh, so we paid for that, you know, in that downturn. But, so those are things, and I think we learn from those, uh, experiences, uh, as we, uh, you know, as we continue to, uh, mature and hopefully learn from our mistakes.

[00:33:44] Chaz Wolfe: Yeah. And I think, I think that that's, that's the ultimate, right, is to be able to, you know, reflect back and go, okay, how do we do it differently for, for somebody who hasn't, you know, had the opportunity to, to live through a, a recession like that or, or really just make major, um. You know, bad decisions, I guess.

'cause we both, that, that moment, that feeling of like, oh, I would never wanna do that again. I would

never wish that on my enemy. But it, except for that, it gave me some really, really key components of what I have now as a human, as a thinker, as a entrepreneur, as a leader. And so I, I, I received that. But I guess my question is, is, you know, I guess maybe more tactically in inside of what you're doing on a regular basis now, is there anything that you're. Doing to, to not be as aggressive? Or is it as aggressive really? Was that the problem or was there other me maybe metrics that you were blowing out, like what was really over getting over the skis and what does that look like? Because it does take a, take some conquering and aggression to grow a business and so kind of maybe teeter that line for us a little bit,

[00:34:48] Jeff Rutt: Yeah, and I don't, uh, really, there's so many unknowns because you can go too far the other way and just never grow and never, you know, just if, if you're not aggressive enough, . You'll just gradually go out of business because you don't have, you know, you don't have that inventory. I think some of the things we learned were to really do, you know, your hurdle rates, your, your metrics, really following, um, guidelines that you set up for yourself or as a, as a team, very, diligently and making sure that you're disciplined in, in following those, uh, metrics and never

Believe too much in your own press. Like always, you know, keep that humble,

[00:35:31] Chaz Wolfe: There's that

[00:35:32] Jeff Rutt: that humble attitude like, yes, it can happen to me.

[00:35:36] Chaz Wolfe: Yeah. That gives us ideally, some perspective in that moment, right? Like, maybe you haven't experienced being humbled, but by being humble, uh, maybe you can stay away from from that. It's the pride before the fall, analogy. What do you think is practical? Because it's, it's difficult what you're saying. You guys are winning and when we win as entrepreneurs, as competitors, it feels good to, to celebrate.

It feels good to, you know, even for guys that maybe are a little bit more conservative, I would put myself in that category, but I still like to win. I still like to like. Did that check, it like, makes

me feel good, even though I quickly move on to going back to work and not trying to, you know, read the press.

There's still that moment, and, and I know that that's healthy to a degree, but talk about how do I, how do I kind of fight off the, maybe pride before the fall, that inevitably might come if I don't have this humble spirit. But yet still, I'm, I'm, I'm an entrepreneur. I'm, I, I love to win. I want to get after it.

I want to, I want to, you know, I wanna celebrate my wins. How, how do I do this?

[00:36:37] Jeff Rutt: Yeah. Yeah. I forget who, who I'm quoting, but you know, you've, you've heard the quote, um, . . Humility is not thinking less of yourself, it's thinking of yourself less. And I, I think, you know, we can have a strong self-esteem, we can have confidence, we can have that, know, a belief that we were made by the creator and we, we are, you know, um, made to be honoring the king, the real king.

And I think that's, that's an important thing to remember, but yeah. who's the author of Ego Is The Enemy? You probably know.

[00:37:15] Chaz Wolfe: Oh yeah. Not off the top of my head, but I

[00:37:17] Jeff Rutt: Yeah. So,

[00:37:18] Chaz Wolfe: We'll, we'll put

[00:37:19] Jeff Rutt: yeah, another great, a great book, uh, I think the, uh,

[00:37:23] Chaz Wolfe: Yeah.

[00:37:24] Jeff Rutt: there's a higher, uh, probability of going too far that way of believing your own press. But it doesn't mean that we shouldn't have a, a, a quiet confidence, a, a humble like belief in ourselves.

But that can go too far the other way.

[00:37:44] Chaz Wolfe: Yeah. I wanna talk about this just for a quick second here before we kind of wind down, because you're, you're spot on with this in, in my opinion. Um, it, it's, it's identity is what you're referencing and the identity of who do I believe that I am. And, and I can still have a humble approach when I step into a, a podcast with a gentleman like you.

Or when I step into a sales call or when I step into a meeting with my wife, or hanging out with my kids like . The, the humility is, like you said, making it not about me all the time, being selfless, as opposed to self-focused. And so the, I guess the, it, it's, it's humility. I'm, I'm, I'm, I'm trying to bring a couple points together here in my mind, and I'm, and I'm twisting 'em up, but the, the humility is good. I guess the identity of who I believe that I am, it supersedes that. And so I guess the thing that's coming to my mind is if I believe that I'm a son made by my creator, or, believe that I'm a builder, like I don't build homes.

But if I'm a builder, then I'm building my marriage. I'm building my children, I'm building my businesses, I'm building my teams, I'm building kings.

I'm, you know, all the, like I can have an identity of Who I am and, and be confident in those things. And that's what I'm hearing you say. So I, I would love your, your comments or your thoughts on what I'm saying as far as identity, because that's what I'm hearing you say is really, that's the

[00:39:05] Jeff Rutt: Mm-Hmm. . Yeah. Yeah. So you're, you're a . your identity. So starting with your identity and your, your faith in Christ, your, like you said, your, your marriage, how important your family is to you, what you, what you really want your legacy, uh, to be. Um, we didn't really talk about this before, but about five years ago, almost five years ago, uh, company

or donated about 89% of the non-voting stock in our comp, in our Keystone custom homes and all its affiliates to, uh, National Christian Foundation Charitable Trust. So our company's actually about 90% owned, uh, charity. Actually, we're gonna, uh, another 1% this year, so it'll be 90 10.

So

one of the things that happened during that transition, it was really clarifying for me in that . 'cause I wasn't sure exactly, but I had a mentor, Alan Barnhart, who had done the same thing a few years ago with his company, had a large crane company in Memphis, Tennessee, and you could find it on, find his story on YouTube.

Uh, I kind of followed in his footsteps. But one of the things you're never really sure how are you gonna feel like the day after you make that transfer? And for me, it was like I had the exact same amount of drive, if not more. kind of, that passion for profit, for purpose as a as, and it was very clarifying, um, for me.

So, so kind of getting outside of yourself, uh, think can be, it's just really life giving. Um, I think the other thing for me is, you know, I have seven grandkids now. My wife and I are, uh, married 43 years and have seven amazing grandkids. Our kids. Our kids are great too, but, uh, love our grandkids

[00:40:47] Chaz Wolfe: grand. Yeah. I say the grandkids are

always better.

[00:40:49] Jeff Rutt: they're, they're, the best.

And just really trying to speak into them, you know, what's that next, what's that legacy gonna be? What's their look at some of the things they're facing? You know, my

[00:41:00] Chaz Wolfe: Yeah.

[00:41:00] Jeff Rutt: six-year-old grandson, what's he, when he's, uh, our age, you know, what's he gonna be facing in, in, in the world around him? So how can he best be prepared for that?

Both in his, you know, all areas of life. How can, how can he be hungry, hungry, humble, smart, and have, you know, that heart, that leaning into Jesus and leaning into using the gifts that God gives him in the best possible ways to honor those around him.

[00:41:28] Chaz Wolfe: Yeah, I, I, I resonate with that, so thank you for sharing that. I think that, that it challenges everybody listening, giving, you know, 90% of your, your company to, to a, to a charitable source and, and then thinking of your grandkids like that. I actually, you know, I don't have any grandkids yet. . I have, I have four littles under the

[00:41:48] Jeff Rutt: There you go.

[00:41:49] Chaz Wolfe: so this is a little odd that I'm thinking about grandkids, but I, I get so excited.

About doing deals with my kids. One, that's coming very soon. we're already starting to tickle that one. But, doing deals, whatever deals look like, whether it's businesses or, you know, teaching, growing, leading, you know, inspiring, all those things that you're just got done talking about with your grandkids.

I, I am, I'm looking forward to those days because it's legacy. It's not necessarily my name. You know, a lot of, a lot of times when people say legacy, they think like, well, I need you to remember me. And, and actually Alex Ozzi, gives a great example on this, how he's like, look man, my, his actual grandfather was a Persian king.

[00:42:28] Jeff Rutt: Hmm.

[00:42:28] Chaz Wolfe: 400 wives, 1200 children, like real deal Persian king. And maybe it was his great-grandfather, but he's like, I don't even remember his name.

You know, ,you for sure don't

know him. And I don't know him. And he was like an actual, like king, like a world leader.

[00:42:44] Jeff Rutt: Yeah.

[00:42:45] Chaz Wolfe: It is like, so, so really are you gonna be

remembered? And, and that's, that's tough because legacy is like, man, wow is my, is my life meaningless? Then it was like, no, I don't think that's his point. I think it's more of along what you're saying, which is, look, how do I be really, really intentional about who. Is being left behind, not necessarily what or my name or, you know, it's more of a how can I equip, you said, how can I prepare my grandson

for when he's been married for 43 years and he's, you know, succession planning for his business and thinking about his grandkids.

Like, how can I prepare him best for that? Like, that gets me

[00:43:19] Jeff Rutt: mm-Hmm. .Yeah. Yeah. And it might not be the easiest. Uh, you know this with, uh, under 10. Sometimes you know the things that, uh, that are the most . Uh, you know, that, that seem to make them the happiest, aren't necessarily the same things that prepare them most for, and I'm not talking about, you know, making it miserable for them.

But we've always had the philosophy that, uh, know, manual labor's not the president of Mexico. Man, this is a, this is, this is a real thing. Uh, so let's, let's learn it early

[00:43:53] Chaz Wolfe: That's right. Yeah, let's get on that dairy farm and you just don't have to

buy the farm. You can learn it. You don't have to buy it. Jeff, I got one last question here for you. I, I wanna wind this down with, with some reflection. You've, we've already, we're right here in this vein of, of legacy and thinking and, how to, how to, maybe influence the next generation.

So I'm gonna try to pull your answer out for the audience and, and hopefully they can be impacted by it. But if we could roll back the clock, I want you to think about the younger, Jeff. I'm not gonna give you an age. I want you to pick the age, but I want you to, to visualize, the younger Jeff and you're gonna tap him on the shoulder. And you're gonna lean over and whisper in his ear. How old is he and what do you say?

[00:44:31] Jeff Rutt: Yeah. I think one of the things that I would say, I'm not sure the exact age, but uh, would say definitely kind of leaning back to, or going back to one of the things I said earlier, . don't believe you're own. Press stay. Stay humble. Keep leaning in to, you know, the, using the gifts that God gave you. I think one of the things I would do differently is the, the transfer that we made five years ago.

I would've done that 20 years ago. just like a really, clarifying and, and we're able to continue to grow our business.

[00:45:11] Chaz Wolfe: Yeah.

[00:45:13] Jeff Rutt: we can't pull it out personally. Uh, but I, you know, I really believe some of the best things in life are free and, uh, uh, there's a lot of joy in, in giving.

So

[00:45:23] Chaz Wolfe: I think that, those, that it's a, it's a refreshingly conservative. You know, low humble, uh, response. And I, and I think that, there's a lot of fast hustle and, hurry in today's environment, especially in entrepreneurs. And, there's, there's poise, you know, coming from wisdom, you know, of decades of doing this,

[00:45:46] Jeff Rutt: Yeah.

[00:45:47] Chaz Wolfe: you know, that, that tell us just to, hey, like, it's actually gonna be okay.

Even if I only had 10% this whole time, it would've been just

[00:45:54] Jeff Rutt: Yeah. Yeah. And there's just, uh, a lot of other benefits, you know, and as I think about, you know, the next 20, 30 years, it's valuable for me to say, okay, if I'm sitting here, you know, 30 years from now, assuming God, God gives me breath that long, and I look back, what would that. And everything went perfectly.

What would that look like? And in order to achieve that, what are the, the things that I should be focusing on now, make that happen? So I think it is, it's a valuable exercise to really think about, where, we prioritize our time. Is that really what we want long term? is that if we're, look, if we're sitting here 30 years from now, no matter what age you are, uh, that look like to, to lean into the things that will be important, then as you look back and reflect on it.

[00:46:44] Chaz Wolfe: Yeah, it's big. I posed a question on social media just a couple of days ago. In this vein, I said, does your self-control and discipline match what you say or does it match your commitment to what you say that you want? And we can say that we want things we can even commit. To them, but it's in those moments that you're talking about, like really deciding like, does this actually get me what I want?

And if it doesn't, don't

[00:47:15] Jeff Rutt: Yeah.

[00:47:16] Chaz Wolfe: Right. And if it

does. To Jeff's point,

I lean in hard. No excuses. And so anyway, Jeff, you've been incredible here today. How can the listeners find you, number one, if they happen to be in the Pennsylvania, Maryland area and they want to b buy, an incredible home or maybe in South Carolina, how can they find you?

Or if they're just an entrepreneur, they wanna learn more about maybe your, your nonprofit or the things that you're doing in business, how can they connect with you?

[00:47:39] Jeff Rutt: Yeah, so our website, keystone custom home.com or feel free to email me. Uh, email is just jeff@keystonecustomhome.com. Or jeff@hopeinternational.org. So, and, uh, would love for anybody globally that's listening to this message, to, to learn about Hope International, uh, more. I know that's not what this podcast is, was, was about, but, uh, looking to continue to grow that.

Uh, we've, we've raised, uh, that started super small as well, but we've . We've raised, uh, about $275 million through the years, but we've loaned out about $1.6 billion, um, through because of the 97% repayment rate. And, uh, leader, our president, Peter Greers, talk about the ultimate hungry, humble, smart, um, in incredible president, CEO of, uh, International's.

Been there almost 20 years. And, uh, yeah, check us out@hopeinternational.org.

[00:48:34] Chaz Wolfe: That's incredible. What, what's a specific ask there? Like, how can they get involved or what would be like, what would you, what would you call them to, as far as

[00:48:42] Jeff Rutt: I would say, yeah. Yeah. Real quickly, three things. Pray, involved on a go, on a trip. See that, uh, know, talk about taking your young kids or teenagers, um, talking about taking the, the wind out of their not fair speech. Take 'em to visit one of the 24 countries we, in the developing world that we work in and

Visit Nadia Anastasia, you know, visit some of, uh, the, uh, clients that are, that we serve around the world. So, and then the third is fi, get financially involved. It's a 5 0 1 3 C. So Go give.

[00:49:16] Chaz Wolfe: I love it. Love it. We'll put all that in the show notes as well. Make it super easy for folks to get involved with that and or just connecting with you. You've been incredible. You have, an amazing business and a history. Thank you for sharing the ups and the downs with us here today. Blessings to you, your family, the organizations that you're leading, all the people that you're impacting in your kingdom.

Thank you so much for being here,

Jeff. Appreciate you.

[00:49:34] Jeff Rutt: Thank you, Chaz.

Join Host Chaz Wolfe as he interviews Jeff Rutt, a dairy farmer turned home builder who constructs 500 homes a year operating in South Central Pennsylvania, Northern Maryland, and Charlotte, North Carolina. Jeff also started a Christian-centered microfinance organization 'Hope International.' Listen as they delve into business strategies, processing, historical economic downturns, lessons learned, and Jeff's philanthropic efforts. Also, hear how Jeff balances humble confidence with conscious preparation for potential business downturns. Stay tuned to the end where Jeff talks about Hope International and how YOU can get involved.

Jeff Rutt:

Email: Jeff@keystonecustomehom.com

Website: hopeinternational.org/

linkedIn: https://www.linkedin.com/in/jeffrutt1/

Website: https://www.keystonecustomhome.com/about-us/

Facebook: https://www.facebook.com/keystonecustomhomes/

Youtube: https://www.youtube.com/user/KeystoneCustomHomes

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