In this episode, Christina May sits down with Shane Warren of Warren Builds Construction to talk about what happens when a business cycle turns against you. Shane shares how a major downturn left him carrying land, contracts, and financial obligations that took more than a decade to work through. He explains why facing difficult conversations directly, working out payment plans, and staying creative helped him keep moving forward. The experience also changed how he thinks about fixed expenses, cash on hand, and building a business that can adjust when conditions tighten.
Christina and Shane dig into the balance between pessimistic, realistic, and optimistic thinking, and how scenario planning can help leaders prepare for what comes next. At the heart of the conversation is a lesson that applies far beyond construction: disciplined, consistent decisions can give a business more room to navigate hard seasons.
Christina May: Well, Shane, and I'm so happy to have you on the podcast today. You and I have been swapping war stories before the camera rolls, so I am really excited to share kind of our stories of perseverance and how they've gotten us to where we are and, you know, some of those lessons, you know, of grit and getting through it, for some of the choices that we've made. So, welcome to the show.
Shane Warren: Thank you.
CM: Yeah. So tell us a little bit about WarrenBuilds before we dive right in.
SW: Yeah. I mean, I've been an entrepreneur pretty much my whole adult life. I mean, even in college, I was trying to find any type of job to make a few dollars so that I could go out for the weekend.
CM: What's your most creative? I've heard some really creative ways of making a buck early in life.
SW: My most creative way, which was kind of a little bit of a flat, but my friend and I, fancied ourselves. We thought we were kind of fashion people or whatever. I was working for this modeling agency, and we put on a beauty show.
CM: Oh my gosh. Okay. All right. You're a first for that on the show.
SW: I had a friend of mine that worked for a soap opera from my hometown. So I had her as the headline, and came down to New York. She was the headline, for the beauty show. And we ended up breaking even, we didn’t lose money but I was ready to spend the money. I had everything lined up. I'm going to be able to get this or do that. We rented out a big hotel. And, but you know, again, we didn't lose money, we broke even, but it definitely wasn't a payday. But you know, we were always trying to think of ways, we were a lot alike in that way. We were always trying to think of ways to make money so we could go on spring break.
CM: Yeah.
SW: Or, you know, just go out or buy some new clothes or whatever.
CM: So I think it's a really interesting, like, experiment. I think we get away from it the older we get. But just that experiment, I don't have any money and I want X, right. So we had a guest that went to a boarding school type thing where everyone was getting these care packages from mom and dad and these allowances. And he's just like, I'm just happy to be here. And they would eat out every night. And he was like, I really want to eat out. I really want pizza. And these guys are just ordering pizza.
Well, he decided to become an entrepreneur. He was like, I'm going to order that pizza. I'm going to sell ten of those slices. So he started selling his pizza by the slice to hung over college boarding kids. And then his pizza slices were paid for because of that. I think there's these lessons in just creativity. And I always tell people, I mean, it's always about the money, but it's not about the money. Money is a tool, and I can always make more. I always figure out a way to make more. It's never a position of scarcity for me.
SW: Right
CM: But it's always creativity.. It's almost like the challenges that you see. Can you make $100 out of nothing? And I think the opportunities that are out there for that now, compared to when you and I were young like you and I have to sell pizza slices or put on fashion shows or papers or figure something out. Right. But now in a digital economy it's so freaking scary what you can do, but it's also really creative. So all right. So you're a serial entrepreneur.
SW: Yeah.
CM: I will say you are the most put together construction person we have had on the show. No offense to any other guests we've had. So, you learned a few things.
SW: Yeah. You know, I mean, I've been doing construction for 27 years, but I don't own any tools.
CM: Oh, really?
SW: When we first moved into our house that we have now, I needed to do something. And I asked my wife for her hammer, and she's like, are you serious?
CM: Okay, your wife and I would be friends because every weekend, like the staff at Illuminate, they are always asking me, what did you do this weekend? And I'll say crazy things like, oh, I built a walk in closet. I'm framing a drop in the ceiling because I bought this 100-plus-year-old house. There's always a project, you know?. I never have a manicure because I'm working on something.
SW: The difference is that you can do it. I can't do it. I can hire somebody to do it. I can tell you tell them if they know if they're doing it right or wrong. But I'm not a field guy,
CM: You're not a field guy.
SW: Like she was like you're the one who owns the construction company. You should have the hammer. It's not me, you know? But, yeah, I mean, you know, I, I've learned how to kind of manage things over the years. I've learned how to figure out, you know, make sure things happen the right way or or happen at all. And I can see stuff and I can see that, hey, this is not being done right or this is being done right. Because when I first started, I didn't know anything about construction, I mean, I was a mechanical engineer. We did calculations on a piece of paper. Things like I didn't know one thing about building.
CM: You started out at GE right?
CM: Yeah. I was at GE doing technical vibration analysis calculations and then I started doing construction really like just a switch and now I'm setting I found myself you know, building these large 6,000 square foot homes and I did it on my own. My father kind of helped finance me a little bit.
CM:Okay. The friends and family around. Yeah.
SW: Yeah. He was like hey you want to start this business. I was like he's like you can make X amount of dollars. I think at the time it was like, well you can do four homes a year and you can get $50,000 a home and you can, you can make $200,000 a year. And I was in my early 20s, this is fantastic. Yeah. I'm like, that'd be great and have some flexibility in my schedule. But really,I didn’t realize it's not that simple.
CM: What schedule? No day is exactly the same.
SW: Yep. They're always calling you weekend night like it was always, always. And I joke when I say I want to. Like when people ask, why did you start a business? Because I wanted to be my own boss. But, like, as, like I was saying earlier, like, every customer is my boss. Yes. I had people call me. This woman. We had finished her home. It was a house on the water.
Her husband was in the Navy, he was working abroad. And the smoke alarm went off and it's on the two story level. So she called me like three in the morning on a weekend and had young kids and she couldn't get to it. So I had to go down there. It was like an hour drive at three in the morning on a weekend. She was not my wife at the time. She's like, are you serious? What am I going to do? Am I going to have an unhappy customer or a good referral? I mean, the project was done, but still, I mean, you want those, you know.
CM: Maybe next time, like, bring that smoke alarm, like a little closer in. Maybe so, like, you can be at least like on that landing or something to get to it. Maybe even a broomstick or something. And so two lessons were learned there. So you and from mechanical engineering and you jumped into construction. And when did you do that? When was that jump?
SW: 1999
CM: 1999. Okay. So, you know, dot.com bubble didn't get you at all. Right. You know, they made their money. You could capitalize on that. Whatever. But if I remember correctly, because I lived through it two couple years later, a little bit more in a couple. It's famous for anyone that's not used to it. The housing industry has its ebbs and flows. It's not little you're talking about vibrations. You don't look like this. It looks more like this. So we caught a big downturn, you know, in the 08,09 bubble. So I know it's almost like saying, where were you during a significant event, you know, in the industry. So at the time, I hadn't started my firm, but I was working in a construction land development firm at that time. And I just remember how we were all just on edge all the time with what was happening. We went from literally feeling like the building version of Silicon Valley where like Wolf of Wall Street, there's just money to, you know, crickets. Nothing. And it almost felt like it was overnight, even though it wasn't.
SW: There were signs. I mean, it felt like overnight to me. Yeah. You know, I was in my 20s. Yeah. It felt like overnight. Because to your point, like, I mean, at the time, like, you could, we could walk outside and you have another contract. I couldn't handle the contracts. Like I had to turn things away because I was, you know, ahead of myself and maybe one other person. That’s really managing these, you know, estate homes and I was probably doing 3 to 5 a year, and we'd have just one project after another, but then all of a sudden, it literally felt like overnight, or over the weekend you come, and we had land. The big the bigger problem was that we also were developing land.
CM: You got in the development game.
SW: And then trying to build houses and products on that and then sell the land and the houses. So speculative building. Okay. That was the bigger problem. So we had a number of land developments going on during that time. So not only do we have customers that have completed their projects, I was getting swallowed up by these land development projects that, you know, I couldn't then turn around and pay, that we had, we had, contracts that there were that folks backed out. We had a builder on one that was going to take down the lots once we got to record plaque and they backed out. And so I'm holding all this, you know, basically land nets you had.
CM: Yeah, huge mortgage payment basically.
SW: Knocking on my door saying where's the money? And I didn't have the money.
CM: Did any of them try to call the loan because that usually it will get to that point where they'll just be like, no, we're going to call the loan.
SW: Yeah. Well, I mean, what got even crazier is that some of the banks went out of business. They gave us the loans. So we had a couple of projects where, I forget the name of the bank, but they went belly up and then we had I mean, it was kind of a little bit of a hiatus because we didn't have it.
CM: Right, right.
SW: But eventually someone showed up because they bought all the notes.
CM: Yeah. That's when the bank consolidation really started.
SW: Yeah. So then they eventually showed up. Where is the money? You know, you're that much more accumulated in debt and it just was just like just one thing built, you know, on top of the other. And it was, it was a struggle. It was stressful. It's probably hardest from a business standpoint. It was the hardest time of my life. To dig myself out of that.
CM: And wasn't a short dig.
SW: No, it was well over ten years?
CM: That's a long time. I always tell people, at least from my experience, from, you know, being because we have cycles in businesses. I don't want to say you're a unicorn, but it's not common for you to have a business that just perpetually grows every year over year over year over year over year over year. At some point, the market's going to come and you're going to experience some turbulence, right. Whether it's planned turbulence because you're having to invest to grow. Or it's, you know, something completely out of your control. So like what you were experiencing. COVID's an example. For some people, tariffs can be incredibly disruptive. Supply chain issues can be incredibly disruptive. Can throw off your whole entire business, but I always let people know for the time that you're in it, it takes twice as long, at least twice as long to get out. Because that's about what it takes to get back to where you were at least in my experience. But ten years is a long, long, long haul. So, you know, a lot of a lot of people would have just thrown it in. So what did you do when you found yourself in a place like that? What are some of the things that you did because you had to get creative? Yeah, yeah, the engineer had to get creative.
SW: Yeah, he had to get really creative. I mean, I had a couple of, really come to Jesus moments with myself, like, do I want to keep doing this? What am I going to do? But at the end of the day, like, I just would be a terrible employee, you know, myself. So I was like, I would like my options here, I have to keep moving forward. And, you know, I kind of feel like I do have the temperament of never giving up. I had some folks that said things to me that I just took to heart, like an attorney that said this is not personal.
This is business and you have to just make business decisions along the way, and you just can't take things personally. I just deal with things head on like things are going to be hard and so that's what I really just did. I just kind of I called each vendor and I just dealt with it just head on.
And, and I said we're all in this situation. I don't want to not pay you the money. Sometimes I was like, you know, there's no way I can pay this full amount, but I can pay you something I don't want to just walk away from, which I could. Right? But I don't want to file bankruptcy. If I file bankruptcy, you're going to get nothing, right? So they're incentivized to work with you.
CM: Yeah. People don't realize that, bankruptcy, when you're not getting paid, you're not getting it. The banks are getting paid. Period. The end.
SW: Correct. So, you know, I just did that one after the other after the other. And I set up payment plans. And, you know, some of them were 5 or 6 year payment plans. I was scraping and scraping. Some like a couple thousand dollars a month on $100,000 bills or whatever it was, you know, $50,000 bill. So I just kept every month and eventually, ten years later, they all paid off. I mean there were some big silver linings in it all. You know, one, I realized through all this craziness that I kind of wanted to get into a more technical industry. So that's why I gravitated to commercial.
CM:Oh, so you moved back, to full circle.
SW: Yeah, yeah. Something more technical where I felt like it was more predictable. Sometimes I feel like, you know, that that residential market was.
CM :It's more volatile.
SW: More Volatile Yeah.
CM: Commercial is less volatile, I think. But it's still volatile. It's a different animal, but doesn't have the quote unquote mood swings. That I think the B2C market has right now
SW: That’s right, 100%. And you don't necessarily have to, sometimes you may, but very few and far between are you going to have to change that smoke alarm on a Saturday at three in the morning.
CM: Well, nobody's going to be in the building on a Saturday at three in the morning. Once its 5 or 6:00 people are going home to their families, they don't want to think about the commercial industry. On the other side, they're thinking about it when they're at home because they’re not at work, right? So that was a silver lining that I really moved it to, to over to commercial on and pretty much have been commercial ever since then. And then I also went to business school. I went to Northwestern, and got my MBA.
Good for you.
Because I didn’t know if I'm going to be able to maintain this or do this. So I wanted to give myself something to fall back on. That was a tremendous experience to go through and a confidence builder that I carried forward as well. So there were some silver linings and the perseverance it took to go through something like that and make it through. Makes me feel like, you know, I can make it through most things, or anything until I am six feet under.
CM: I agree with you on that. It takes grit and perseverance to do this. I don't think it's something that everyone has in the same way that an entrepreneur has. You have to balance being, almost pessimistic, optimistic and realistic at the same time. All the time.
SW: All the time. Right.
CM: There's something that is called. It's a terrible term. I hate it, but it's something. It's called having a morbid mind. Have you heard of it?
SW: No
CM: Okay, so a morbid mind means. And I think a lot of us do this as entrepreneurs. We think through every single version of a scenario of something. We will ruminate through it, and play it out. And I think that's what I'm trying to allude to when it comes to being pessimistic, realistic and optimistic. You run through your worst case scenarios, right? We've lived them. Hopefully I don't get any worse this, but it's that experience that you draw on when the next one comes. You work through the realistic, which is usually what happens, and they work through the optimistic which usually become goals, later of like, oh, maybe I can or maybe this will or, you know, but it's that kind of scenario building, that I think comes down to it, you know, something interesting you and I were touching on how we both feel very strongly after being in situations, I'll never be in that situation again. So you were mentioning from the downturn like you were never going to get caught, especially after ten years of a dig out. That being the lesson learned, you have this conviction of I will never be here again, right. What are some of the things that you've done and put in place from that experience that you're moving forward, that are obviously propelling your success, but also with that in mind, I'm not going to be here again?
SW: I mean, the biggest thing and I think it applies to the personal as well, is the technical accounting term, fixed expenses. Basically it means don't go buy that big old car, big house, because you're making money during an upturn of the market because a downturn is going to come.
CM: Yep. It's inevitable.
SW: It's inevitable. I've seen so many of the companies that were just making money hand over fist during the building boom, and now they're out of business. So I told myself, don't ever let myself get in that situation. It's hard, you know, because you work so hard and you want to get some nicer things or always thought you were going to have those things.
I mean, every year it was it for me. I want to buy this nice watch when I'm 30, I want to buy this when I'm 40. I'm going to buy it when I'm 50. I still don't have that watch.
CM: You still have that watch?
SW: I can't get myself to do it. Because I'm afraid symbolically if I do it, then I'm giving in to, you know, allowing myself to get ruled by these things that are fixed expenses or, you know, or not having cash, available cash on hand, to stomach the downturn or to navigate or mitigate the downturns that are inevitably coming.
So like when Covid hit, I'm ready. You're not going to get me again. I'm now that older guy that was saying, how did they let that happen to them when they have already been through recessions before? Right. You know, so I'm like, all right, I'm ready, but it didn't really hit the commercial industry.
CM: No. Not like hospitality. Not like a lot of travel, hospitality services, restaurants. They're not even close. Not even close, you guys.
SW: So ours is coming, who knows, maybe in the next five years or so, but I think it's coming. So, I mean, you know, really just minimizing those fixed expenses, and establishing more variable costs of, say, fixed costs. So minimizing fixed costs and then establishing things more as a variable cost. Meaning that when you want to pull the lever up and ramp things up, you can just up those variable costs or then pull them back because things are getting tighter you can pull them back. So focusing on that. And then I mean, at the end of the day like Warren Buffet it's like, you don't have to be the smartest person in the room. You have to be the most disciplined person in the room. Yeah, I have that on my wall in my office because it really speaks to me, of just having financial discipline and fiscal discipline. If you do that and you're always focused on that, then I think you'll always be able to navigate a downturn or any kind of bad moment.
CM: I think you could take that advice and even pull it out further. Every great athlete talks about not just showing up, but showing up consistently. I think a really great example, you know, is whether Tom Brady is one, you know, there's others where they talk about if you really look at my stats, I'm not that much more outstanding than anybody else. I'm more outstanding because I consistently tried more than everybody else did. And I we bring that even into our practice here where we talk about CRM, we talk about data, we talk about marketing, we talk about sales. And the number one thing that we run into with clients is that they don't do any of it consistently.
If you do things consistently and predictably, people know you will show up. They're not looking for you. That's not the cover off the ball experience. It's actually easy in life and in relationships, regardless of business or personal. Yeah, it's that discipline of being consistent and if there's just more that you have means the greater chance of success. And it's not rocket science at the end of the day, is it? But I love that. That's, that's really great advice for anybody, not just the fixed versus variable costs, but just being consistent in what you do. Yeah. So well thank you for being on today.
I really enjoyed digging into this with you. And, you know, I think, I think your next career is going to come all the way back when you're done building and go right back into fashion. Just saying, all right. Thanks, everybody.
SW: Thank you.