Solution Building: Recent Episodes
Mark Eastman
Helping construction contractors and customers FIND SOLUTIONS for building dreams with better business systems, quality construction projects and life lessons through coaching, consulting and constructing.
The Difference of Labor and Work
Labor Day is one of my three favorite holidays each year. Christmas being my favorite. (This is no big surprise). Labor Day and New Year’s Day are tied for the second spot. These two are not typically ranked in most people’s top three.
As I was looking forward to the upcoming holiday, I began thinking about the reason behind the celebration. Labor Day was started to show appreciation for the hard-working labor force in America in the late 1800’s.
We often forget the reasons behind holidays.
They are the Foundation of Your BusinessI was having a discussion with a sub-contractor. They were venting their frustrations with a general contractor they had worked for. This GC bid the project low to get it. Then after getting it, continued raising the price through change orders.
The sub-contractor felt this was dishonest and unethical.
Core values are the building blocks that make up the foundation your business is built on.
Working on the Business is Not The Same as Working In ItEven after being in business for more than forty years and all that I’ve learned over that time…there is still more to learn. Delegating is one of those areas where I need to do better.
I’ve just recently finished reading the book The Highest Calling by Lawrence Janesky. This novel is about business struggles and success. It’s a story of helping others and learning how to do the right things in order to succeed. It shares important and powerful business principles.
It reminded me of things that I know but haven’t done well.
And You Never Know Where Those Connections Will Come FromThe first couple of years as a self-employed construction contractor were a lot different than Gene expected. He’s beginning to wonder if owning his own business is worth it. It certainly isn’t what he expected.
All the headaches and problems that he’s encountered are causing him to have second thoughts about his construction job and going into business.
Working long days doing construction and late nights doing paperwork feels like being stuck in a rut. With help not showing up and Gene having to do more work, the rut just gets deeper.
As a Contractor What Did you Expect?As someone who has been in construction for more than forty years, I’ve worked for my share of hard customers. This does not mean that they are bad customers. On the contrary, more often than not the opposite is true. They are the best customers because they have a high standard and expect high quality.
There are, however, those customers that are difficult. Ones that perceive the process of a construction project to be more of a battle that they need to win.
These aren’t the kind of customers that I’m referring to when I’m talking about customers being hard work.
Flexible Rigidity Is a Good PlanToday (7/26/24) was one of those days. You know the ones. You have it all planned and then…everything gets turned upside down.
Here’s how my day was planned:
Recurring 9:00 daily virtual meeting with my assistant, Emily. Writing this week’s solution. Follow up on construction projects. Friday’s week ending deposits. Pay some bills. Weekly review meeting. Shopping before going home. Family coming over for a movie marathon.
This is not how my day actually went.
…And What Does Etiquette Even Mean?It means treating others the way you want to be treated.
I had a conversation with a friend once about an experience they had with a plumber. While they were standing in the kitchen talking about the project…
The plumber spit tobacco juice in the kitchen sink.
Not once mind you, but 3-4 times! At least he had the courtesy to turn the water on and rinse out the sink.
I wonder if his wife let’s him spit tobacco juice in the sink at home.
While I was talking with this friend, I thought out loud, ‘What has happened to contractor etiquette?’ The more I’ve thought about it, more examples of this kind of ‘bad contractor behavior’ have come to mind.
The Bottom of the Rut is GoneIt’s been a tough few weeks. With the truck transmission needing to be replaced and the customer shorting Gene $1000 dollars for the garage windows, Gene has felt like he’s stuck in the bottom of a muddy rut.
Even with all the problems, Gene has had a lot of work to do for his first year of self-employment.
Some of the projects have been very profitable.
Having a lot of construction projects is rewarding. It’s also one of the reasons he’s struggling to get proposals done and keep up with the paperwork.
To add to the busy, it’s time to get the tax paperwork gathered up. Gene needs to get it to the accountant so income taxes can be prepared. One more thing on the to do list that needs done.
Or You Can Just Keep Doing What You’ve Been DoingThe definition of insanity is doing the same thing over and over again expecting different results.
This common quote is attributed to a lot of different people. It doesn’t matter who said it. What matters is what it says.
I think this quote is so popular because of the truth that it represents.
I recently shared how change is hard. This seems especially true for people in construction but isn’t limited to them.
Without intentional action, nothing is going to change. Things will just continue as they are.
This is Where Delegation Comes inHaving too much to do and not enough time to do it is a common situation. This is especially true for people in construction.
Chasing my tail and trying to keep up is a good description of how this past week was for me. There were four different construction projects being done at the same time. This involved organizing multiple subcontractors and materials.
In addition to this, there are six construction projects that are either waiting to be started, need to be scheduled, or need change orders done.
Oh, and don’t forget the proposals that need to be made, payment applications and invoices for the week, and record keeping.
Sounds like a pretty normal week in construction, doesn’t it?
It’s Important to Know This Because Your Money Can Move with ItIt’s that time of the year again; temperatures on the thermometer are creeping near the 100-degree mark. This raises the issue of keeping the heat outside and the cool air inside.
This issue is even more relevant if you live in a home that is 40 years old or older.
A home built before the mid-seventies is more likely affected by outside temperatures. Not enough insulation, single-pane windows, and air infiltration are all issues that may need attention.
Understanding how heat moves in and out of your home can help you determine what projects to consider undertaking to minimize the heat. It can also help determine which projects are most important.
There is a difference between heat and hot air.
Pretty Deep When the Bottom is Mud
It’s been a few months since Tony pulled his stunt leaving Gene high and dry without any notice. Gene moved on…what else could he do?
Gene replaced Tony with Darin. Darin is less experienced, but at least he has shown up so far. Of course, this may be because Darin doesn’t have anything to drive, so Gene picks him up and takes him home every day.
Gene has been very busy. He’s had a lot of construction projects to do, not to mention trying to keep up with the paperwork. Things seem to be getting busier and busier. Maybe things are going to turn around for his business.
As Gene was on his way to pick Darin up this morning, the truck began to make a grinding noise and it was hard to shift the truck into second gear. It didn’t get any better after picking Darin up and going to the job site.
Then it happened…the transmission went out.
And the Rut Just Keeps Getting DeeperIt’s Sunday afternoon and after getting home from church, Gene is back at his desk (the dining table) working on the third construction bid. He would rather be watching the NASCAR race, but there’s just not enough time for both.
Some people would say that getting three of the four bids done is pretty good. There are a lot of people in construction that wouldn’t sweat this, but it bothers Gene to not follow through on what he said he would do.
It’s getting late and the family has already gone to bed as he starts the next bid.
At 1:15 AM Monday morning, Gene decides to go to bed even though the bid isn’t done yet. He needs to get up in a few hours and do some actual construction work.
You need a plan if you’re going to build a successful business.
STUCK IN A RUT
It was late on a Saturday night and Gene was sitting at his desk in his home office (otherwise known as a dining table). This was the office of his construction company.
He was working to get at least one more construction proposal done before going to bed. He had promised four different customers proposals this week. If all goes well, he’ll have this second one finished before midnight. As Gene crunched numbers, he worried that he might have forgotten something. This had happened before.
He asked himself, “Why am I doing this? I could make more money and work less hours working for someone else. Heck, I’d be better off flipping burgers. This sure isn’t how I pictured my construction business five years ago when I started.”
This Seems Especially True for ConstructionChange is the biggest issue that the construction industry faces. Why are people in construction so bullheaded? They are some of the most stubborn and headstrong people.
This starts at a young age. As children, we have fewer external experiences to draw from. This restricted resource limits our view. This is why young people think they already know everything.
This narrow perspective then becomes our standard and we see no reason to change.
If You’re Like Most People in Construction, You Don’t Know…Last week we discussed how 96% of construction companies go out of business within the first 10 years. This is a problem if you’re in construction.
As I was discussing last week’s post with a friend, he asked me why I do construction. Why would anyone want to start a construction company with odds like this? This question started me thinking about it.
Why is anyone doing construction if the chance of staying in business is so stacked against them? This question prompted me to reach out to some people in construction and ask them.
Why am I doing construction and how did I get here?
How Can You Change the Odds in Your Favor?
According to the US Department of Commerce, 96% of construction companies fail within the first 10 years. This is a higher failure rate than any other kind of business.
If you’re in construction…this is a problem.
Having been in construction for more than 40 years, I became aware of the problems and began to understand them. I gathered information and learned how to implement it into my business.
That’s why I beat the odds.
I’ve learned a lot over those forty-plus years and here are 7 reasons that construction companies fail.
A Plan is Only Good if You Use it.
The past couple of weeks we’ve discussed how important the Production Tracker tool is and how it can help you see the future of your business.
Building a construction business is no different than building a building. If you don’t have a plan, you won’t know what to do. You will just be guessing.
If you don’t have the right tools and know how to use them, it will be a lot harder to build anything.
The Production Tracker is one of those business building tools.
Trust me, it doesn’t take any magic.
Last week we talked about what the Production Tracker is and what makes it an important tool to have in your business building toolbox. I also pointed out how most people operating construction companies hate paperwork, but how important paperwork is to build a successful business.
It’s amazing how people in construction will use all sorts of power tools and equipment but not paperwork.
Because it Helps Keep Your Business Balanced.
Recently we discussed the importance of keeping your construction business from getting out of balance. Achieving a balanced business requires paperwork and we know how construction contractors feel about paperwork.
I know, I know, paperwork is not a very exciting topic, but neither is concrete. And we all know how important concrete is in supporting a building. The same is true for paperwork and your business.
One of the three foundational piers in business is administration and finance. One of the building blocks in that pier is a Production Tracker. This tool provides valuable information for forecasting the company’s financial needs and production plans.
You Have the Power of Choice.
There’s a saying, “A rut is a grave with both ends kicked out.” Too often we get in a rut and don’t even realize we’re there.
This is how operating a construction company can be.
Plodding back and forth, doing all those things that need to be done, never looking up to see where we are or where we’re going. If we’re not careful the rut will get so deep that we’ll never get out.
This feeling of being stuck can be overwhelming. If we wait too long to do something, that’s when it becomes a grave, and we give up and go out of business. It’s just not worth it.
That was never my plan.
Most people in construction would not consider themselves entrepreneurs. They see themselves as self-employed.
There’s not a huge difference between the two, but it is significant.
It’s the difference between working in your business or working on your business.
Wow, a lot more than I thought!
Recently I’ve been extremely busy and working hard trying to get things done. I know that the length of my list is my choice. Busy lives are nothing unusual, especially for those of us working in construction.
So, how can we be more productive and decide what things on the list are the most important? The answer to this question will be different for each of us, but it’s something we have within our control if we just do something.
Listen to this week's podcast to learn more about how to prioritize your schedule!
To build the business of your dreams you must take action.
For years people have asked me where I came up with the business system and procedures that I use. As I thought about it, I realized that early on my business and life had developed without much intentionality.
I was a dreamer at an early age. I had big ideas and plans for my life. Then there was a portion of my life where I became disillusioned and accepted that my dreams were just that…dreams.
Listen to this week's podcast to learn how to take action in building your business!
Be careful with short legged tables.
Have you ever felt like your business and/or your life were out of balance? It’s a little like a three-legged table with a short leg…kind of wobbly.
Listen to this week's podcast to hear about how easily your business can get "out of balance" and what you can do to fix it!
Time to protect your biggest investment! As I was looking at the calendar, I noticed we’re already well into March and rapidly approaching spring. This got me to thinking about home maintenance and I realized… It’s time to get out the Home Maintenance Plan. Your home is a sizable investment and regular home maintenance will help extend the life of your home and that investment.
Why does everyone tell you it’s easy when it’s not?
Helping people in the construction industry build their businesseshas been a real struggle. They say they need a better way of doing things but won’t take the time to do anything about it. They struggle with construction proposals, change orders, payment applications, saving money, communication, etc.
I know because they tell me this all the time. Not to mention, I was there too once so to totally understand!
It’s like quality construction, it sets you apart as a professional.
Gene’s getting excited as he pulls up to the SMR Construction Company office. Today they are going to put all the pieces together, creating a finished proposal!
Listen to this week's podcast to see Gene's proposal go from blueprint to reality!
It all comes down to dollars and cents.
It’s week six of learning the Building a Better Proposal system. As time consuming as learning new things is…Gene is beginning to see the benefits this proposal system will provide.
Just like building a house uses repeated actions to reduce the need to think about how to do things, this proposal system does the same thing when bidding construction projects.
Listen to this week's podcast to hear the final steps of the Building a Better Proposal!
Clear communication is critical to happy customers.
Last week John explained to Gene what project information needed to be gathered… This week they’re going to take the information gathered and turn it into a Scope of Work. This will be the foundational form of communication between everyone involved in the process, i.e., customer, contractor, sub-contractors, employees, etc.
Listen to this week's podcast to learn more!
It starts by asking the right questions!
Another week has gone by and Gene’s looking forward to today’s meeting. As they wrapped up last week’s meeting, John indicated that they would “actually” learn the first step in the proposal system today.
Listen to this week's podcast to walk through the first step of the proposal system with Gene and John!
So wouldn’t you like a plan for doing construction proposals?
It’s Saturday, and today will be Gene’s third meeting with John. Even though there’s been no change in Gene’s overwhelming workload, today is the first time he’s not considered canceling. He knows the value of this information and is looking forward to the opportunity to learn more from his mentor.
Listen to this week's podcast to hear Gene and John explore the steps of the Building A Better Proposal system!
This is the first step in Building a Better Proposal. Even though Gene was still overwhelmed, and his schedule was packed, he knew the only way to ever get control was to keep his upcoming appointment with John. Listen to this week's podcast to hear about Gene's second meeting with John and learn about the top 7 bid mistakes that contractors make!
And Gene’s not sure he can squeeze it in. It’s Friday, and Gene is in his normal state of overwhelm. He’s supposed to be meeting with John tomorrow afternoon to go over the Building a Better Proposal system, and he doesn’t know how he can fit it in. There are still so many things that need to be done.
Sound familiar? Listen to this week's podcast to hear about Gene and John's first meeting and their discussion of the Building A Better Proposal system.
That’s a luxury I just can’t afford! Here we are, already a week into the new year, and I’m not done with my annual planning yet. This is something that every year I intend to do before the end of the year, but it rarely gets done on time. I know I’m not the only one struggling to get everything done, and I get it. The question is, how can we be the most productive with the time we have?
As usual, Gene had been on the go, nonstop, trying to keep construction projects moving forward, collecting money, paying bills, and meeting with new potential customers when he realized he still had six projects needing proposals. As he thought about this, he realized it had been more than two weeks since he had talked with John about how he did construction proposals.
Listen to this week's podcast to hear how John helps Gene prioritize building his construction business; and how you can too!
You start with a plan.
Once again, Gene was alone at the office late on a Saturday night working to get at least one more proposal done, before going home. He had promised four different customers their proposals this week. If all goes well, he’ll have this second one finished before midnight.
Listen to this week's podcast to hear how Gene finds "the light at the end of the tunnel" in his construction business; and how you can too!
If not, why do so many do it? This is the million-dollar question. And it actually may be. The amount of dollars lost by procrastinating is costing money and a lot of it. Decisions have consequences. Every decision we make every day comes with consequences. Some of those consequences may be good, some may not.
That’s a question that’s going to take some research! Have you ever noticed how stubborn people in construction are? From my experience, they are some of the most headstrong and obstinate people you’ll ever meet. It’s like they are so bullheaded that they’re not willing to make any changes. Why is that? We get into this in detail in this week's podcast!
Trying to spin too many plates at the same time can make you dizzy.
The number of things we’re trying to get done just increases around the Holidays. I know the last couple of weeks I’ve have felt like I had a lot of plates spinning.
Most construction companies operate this way, they’re trying to do too many things at a time. Just like the performer who keeps putting more and more spinning plates up on the end of sticks, we keep trying to do more and more.
Dreams don’t magically build themselves. This includes a dream business.
I had a wake up call through my accident in 2012. That was when it became clear to me that my business and life had been on autopilot without much intentionality.
There was so much more that I wanted to accomplish. I had been going through the motions of living without acting on the plan.
And there’s more to the right tool than you might think.
There is a tool out there for every job, usually more than one. As cool as they all are, they’re worthless if you don’t have them and don’t use them.
The biggest “tool” problem is…the lack of “business BUILDing tools”.
Don't miss the Holiday Special on our Business BUILDing Toolbox beginning on Black Friday, Nov. 24th, when the toolbox will be half off it's original price. But this sale won't last long!
It’s like opening the perfect Christmas gift.
Make your construction project like opening that gift on Christmas morning that you’ve always wanted. It doesn’t have to be a stocking full of coal.
Finding the right builder is like doing a construction project, in that it’s not as scary as it seems if you know what questions to ask and have someone you trust guiding you.
And I don’t mean getting a stocking full of coal! It’s a little like a home construction project. Different people have had different construction experiences…some good and some not so much. The problem with construction is that there are more bad experiences than good, and it shouldn’t be this way. A home construction project should be like Christmas.
You would think so, but construction companies do it all the time.The reason most construction businesses are stuck here is fear. They are afraid that trying something different might not work. They choose the discomfort of the known over the unknown.
It doesn’t have to be this way!
Do you think the construction business of your dreams is worth it?
One of the biggest issues in construction is that most people in this industry are willing to do the hard physical work of building a building but will work even harder to avoid the work of building the business.
Building the business of your dreams is a choice.
If you would like some information about tools to help you build the construction business of your dreams, check out the 5-step Business BUILDing Process. Or if you need some tools for building that dream business, check out the Business BUILDing Toolbox. If you have any questions, you can schedule a free 30-minute consultation here!
It’s really not that hard…it just requires a change of perspective.
There are countless reasons that businesses fail, but just because other businesses fail, doesn’t mean yours will too. Being aware of and understanding these statistics increases your chance of survival.
You can’t succeed if you don’t try.
If you would like to learn more about BUILDing a successful construction business, you can schedule a free 30-minute consultation here.
Because your company is too important to just roll the dice
Why is it that people operating construction companies are willing to gamble with their business? This random hit and miss business model is an all-too-common practice in the construction industry.
Somewhere along the way as we grow into the routine of life and business, we stop asking questions.
UNDERSTANDING starts with asking questions.
Schedule your free 30 - minute construction company consultation here!
It would be so much easier if there was only one problem to deal with.
As complicated and overwhelming as the physical on-site construction portion is, the business part is equally daunting. Listen to this week's podcast to learn more about the top problems in the construction industry and some solutions that can help!
How to know what your number is and what you should do with it.
A construction company's bid-hit ratio is vital to the health of their business. This statistic provides a clear look at the type/price/size/etc. of projects that are most valuable to the company.
Written communication is really the only way to avoid this problem.
Whether it’s subcontractors or customers, the communication responsibility lies with the general contractor.
Verbal communication leaves too many things open to interpretation.
Wielding a power tool gives us a sense of control and respect. The feeling of that power in our hands is amazing. We are in control, but the machine can never be tamed. We have to respect it, or we will regret it. We pretend to be in charge of the “power tool beast”, but we know better.
Change can be scary; it might not work. We know our routines, and we like them. “We’ve always done it this way”, isn’t a very good plan for building a better business. Too many construction companies find themselves in a rut, and “rut thinking” doesn’t allow for building your dream business.
So how do you get out of that rut and build the business you always dreamed of?
Knowing this could be the difference of life and death for your business.
There are so many things trying to get on the “to do” list and each one is competing for the top position. Deciding which one should get that spot is tough.
It’s easy to say that we have limited time but hard to actually spend it that way.
The best way is to have a Home Maintenance Plan! It’s easy for the busy activities of everyday life to consume us, and home maintenance gets overlooked. This is why I prepared a Home Maintenance Plan and Check List. It’s available for free at our Solution Building website. Just follow the links and download it for free.
How can I sort through all of them and get them in the right order?
Over the past several weeks we’ve discussed the importance of having a plan when it comes to building anything successfully. Part of that discussion was focused on having a clear and implementable business operating plan.
It became pretty evident that designing, building, and implementing an SOP is a pretty big project. It’s a lot like building a big construction project, if you don’t start, it will never get built.
The same thing is true for your business…if you don’t start, it will never get built.
How an operating system can help your construction company navigate the business fog.It takes thousands of pieces to construct a building. If these pieces aren’t put together in the right place and in the right order, the end project is not what was expected. It might even lead to the building collapsing. This can be avoided with a clear plan and good communication.The same is true for a business. There are thousands of pieces that need to be put together in the right place and in the right order if the company is going to survive and become successful.
Like everything else in your business, the answer to that question is up to you. This week we'll be taking a closer look at SOPs and discussing the specifics of what you could choose to include in your company's standard operating procedures.
Why building a successful construction business requires having a plan. Over the past few weeks, we’ve discussed how building your business is critical to the success of your business and the importance of keeping your business in balance. After more than forty years of construction experience, I tend to view most things from a “building perspective". Today we’re going to compare once again building a business and a construction project. One of the most important parts of the plan for building a good building has nothing to do with physical construction. It has to do with processes and systems.
So, if it’s worth it…why is it not done?
You probably guessed it already; this week’s topic is COMMUNICATION and the all-too-common lack of it. Because poor communication is such a big issue, I’ve written about it a lot.
In a production meeting with a customer yesterday I was once again reminded of the importance of clear communication and…the lack of it.
It’s amazing how things become clear with a limited amount of time. What is productivity? Now there’s a question for you to answer. We have a limited amount of time in a day, a year, or a life. Productivity generally refers to the ability of an individual, team, or organization to work efficiently within that time in order to maximize output.
It’s hard to keep your business in balance without a plan. Most of us who are self-employed spend way too much time feeling like our businesses are out of control. We started our businesses with grand ideas and dreams. Then one day we woke up and wondered what in the world we were thinking. I recently finished reading the E-Myth Revisited by Michael Gerber. As I read through the book I was reminded and encouraged to review and improve our business and the operating procedures. If we don’t have a plan and aren’t intentional about implementing it, we are doomed to failure. Business is like a three-legged table. If one leg is short, it gets kind of wobbly.
Like the construction of a building – you need a plan for your company.
If you own your own business and aren’t being intentional about the organizational operation of your company, it is likely that you won’t make it past your 5th year. This is according to the Bureau of Labor Statistics.
Starting a business without a plan is not a very good plan.
Learning about business tools isn’t necessarily fun, but it is necessary for business success. I found that out the hard way! Last week we went through the process of getting started with a blank Payment Application and getting it filled out so that it is ready for the customer’s first payment. Now let’s look at preparing the Payment Application for recurring progress payments so that our customers know exactly what they are paying for with each invoice we hand them.
This is one of the most important tools in the construction Business BUILDing Toolbox. Communication between construction companies and customers is one of the biggest problems in the construction industry. The Payment Application is a business tool used for tracking project progress payments. It’s a way to communicate the financial expectations to the customer…and it’s only fair to let them know what to expect, when they’re the ones writing the check. Construction customers don’t like surprises.
This tool helps the construction companies see their cash flow ahead of time. Concerns about cash flow is one of the biggest struggles construction companies and contractors face — and for good reason. These businesses typically lay out large amounts of money for project-related expenses. Waiting to get paid until the job is complete is a sure way for a company to go out of business. An alternative approach is for businesses to be paid when predefined stages or percentages of a project are complete, a model called “progress payments.” Progress payments benefit all parties involved.
If so many issues come from not doing change orders, why are they not done?
A Proposed Change Order is another very important tool that should be in the business toolbox of every construction company. However, it’s probably used less than almost any other business tool. Its lack of use causes as many, or even more, problems than any other tool.
If it’s that important, why is it not used?
We’ve discussed multiple times the reasons for doing Proposals for construction projects and the importance of communication with construction customers.
Proposed Change Orders are just as important.
Putting a period at the end of the construction proposal.
The discussion of “Building a Better Proposal” began with the problems that arise from poor communication. We talked about this being the responsibility of the contractor and some of the reasons this is a problem. Previously we laid out the “Blueprint for Building a Better Proposal” going over the different parts of the system, and putting all of the pieces together into a proposal so that it's ready to be presented to the customer.
Once you have a signed Proposal, you should conclude with a Contract.
The Contract completes the Proposal process and covers things beyond construction. Things like funding, additional documents, property boundaries, time within which the project will be started, and terms and conditions.
The thing to remember about tools Is…they’re only good if you use them.
Over the last couple of weeks, we have discussed why it’s critical to save money for those big irregular expenses and unexpected emergencies. Next, we began the process needed to start building a “Rainy Day” fund by determining how much and for what. The Savings Transfer Sheet is like any other tool, it doesn’t do you any good if you don’t use it.
As is the case with everything that’s worth doing, starting is the hard part. Saving money is no different. It’s like digging a hole.
A shovel is a simple tool that’s easy to use. It can fix a problem before it gets too big, but only if you use it. If you don’t, the outcome can be devastating.
This is one of the tools you should have in your Business BUILDing Toolbox. Last week I wrote about the importance of having savings, both individually and in business, and the high percentage of people who don’t. The tendency to spend everything you have is a problem when the unexpected happens. I’m not saying that after you pay the bills every dollar should be saved. What I’m talking about is having money ready for big, planned purchases or unexpected emergencies. This way you can use your own money and don’t have to pay someone else to use theirs.
Setting up a “Rainy Day Fund” for your business can help keep it afloat.
We’ve just passed a painful time of the year…INCOME TAX SEASON. This can be stressful but doesn’t have to be if you’re prepared.
It’s common for people to spend everything they earn and not save anything for future investments or emergencies. For the most part, as a society here in America we have become comfortable.
We have forgotten how important it is to save money.
The question is, how do you know if you have the right one or not?
If you’re not careful, building the home of your dreams can become a nightmare.
The number of times I’ve heard people say that building their new home was the worst experience of their life is too many. This is not how construction projects should be remembered.
So, as a construction customer, how can you avoid this from happening to you?
I recommend using the 5-step BUILD process.
That’s why it’s important to know who your builder is. Building a new home is expensive, but the same is true for remodeling. Let’s face it…construction of any kind costs a lot. The final price comes down to what you want in your home.
The final building blocks in the 5-step foundation of your business.
Learning to build a building isn’t instantaneous. You don’t show up on a job site your first day knowing everything about building. You come back the second day and learn more and the third and the fourth. And years later you have learned how to build.
Building a business is the same. You can’t just wave a magic wand and have your business running like a well-oiled machine. It takes time and effort just like building a building does. This also becomes a part of who you are.
After Becoming aware of and Understanding your problems, next you’ll need some INSTRUCTION on how to IMPLEMENT this INFORMATION.
The amount of information it takes to run a successful construction business can be overwhelming. Asking someone for help can be scary, not to mention time-consuming. Ultimately, it comes down to you making a decision. You can decide to keep doing things the way you’ve always done them or…
You can decide to do something different and change things.
This Requires an UNDERSTANDING of your Problems and Having Solutions to Fix Them. Last week we talked about the high number of construction companies that fail and some of the reasons this happens. So why is it that construction companies fail so often? We discussed some of those reasons last week. They included things like – a lack of funding or poor cash flow, poor production performance on projects and not having a good business plan. If you want to BUILD your dream construction company, you need a plan…a Blueprint for BUILDing a Better Business.
It Has More to do With Business and Less to do With Construction. We’ve all seen construction companies get started and then go out of business. The real factors that brought about construction company failures are internal and within the owner’s control. The good news is, that the next generation of construction businesses can learn from their forefathers’ mistakes and avoid failing for the same reasons. Owning or managing a construction business is a hard thing to do. And to do so successfully is especially hard. The solutions to problems that can put construction companies out of business may not be easy. It takes a lot of planning, production management, hard work, and discipline to keep the business running successfully.
Back in December we started discussing the importance of building your business on a solid foundation and why people in the construction industry avoid doing it. Then we talked about how a reporting process like the “Job List” can be an important building block in a construction business foundation. Last week we looked at how the “Job List” can help us plan for the future. Today we will focus on how a business won't stand long if it's not built on a solid foundation by looking at the final five areas of the job list.
That’s a question we’re going to continue answering in this week’s solution. The Job List provides us with financial information that helps us gauge how we are doing campared to our annual financial goals. When we look at the total project bid amount and the total signed amount we can see where we are in relation to our financial goals for the year.
This is How the Construction Contractor Evaluation Works in the Real World.
It’s time to bring this process of evaluating construction contractors to a conclusion. Like most things needed to run a successful business, this process of evaluating and holding the construction industry to a level of excellence isn't as simple as we’d like it to be.
This evaluation system will give us some clear and concrete information to help us make better decisions regarding construction projects.
How else are we going to know how high the bar actually is? This week we're going to look at the hard part of the process…putting numbers to performance. The number of goals made or correct answers given provide a numerical value of a person’s accomplishments. Evaluating performance is harder, it's about expectation and perception. The variation of perception is one of the main reasons this process gets left undone. What's acceptable to me, may not be acceptable to you and vice versa. This is why a system for giving a fair evaluation is important.
How Do We Get the Bar Raised to the Level of Excellence?
Over the past couple of weeks, I’ve talked about the need to raise the bar of what is expected of construction contractors and how at Timber Creek Construction we’re working on a process to accomplish that. I used to believe the ultimate goal was achieving perfection. Then I was informed by my wife that striving for perfection was a bad thing because perfection is impossible. The fact that perfection is unattainable leads to disappointment. I struggled with this for a while before determining that... EXCELLENCE is the goal, not perfection.
The First Step is Raising the Bar High Enough So an Earth Worm Can Get Under ItI talked last week about how poorly the construction industry is viewed and the contractor’s unawareness of how low construction standards are. It’s pretty sad when the bar is so low that an earth worm can’t get under it.
As a general contractor I’ve allowed myself, sub-contractors and laborers the latitude to leave the bar where it is. When this is permitted as acceptable, it leaves the bar laying in the dirt.
Standard is just average. Average should not be what we’re striving for. Currently the industry average needs to be raised. Let’s work together to get the bar out of the dirt. We need to determine what acceptable standards are and then incorporate a process to evaluate performance as compared to the standard.
We should be working to achieve more than average. We should be striving for excellence.
Construction Contractors need to prioritize their customers, and in order to do this in every aspect of their construction work, their expecations of themselves need to change.
The topic of virtual construction consulting came up several months ago when I was talking with a friend, who lives more than a thousand miles away, about his construction project. He and his wife bought some property that belonged to an older lady and the buildings had fallen into disarray. As we talked, I found myself wanting to go help him fix things.
A couple of weeks ago we talked about a construction problem and what to do about it. This problem involved rafters not being attached to the ridge beam properly and a possible solution. That solution required the rafters to be long enough…which they aren’t.
So, now what do we do?
Link to the blog post that has helpful photos to go along with the podcast: https://www.solutionbuilding.net/the-job-list-is-one-of-the-foundational-building-blocks-of-a-successful-construction-company/
Now, What’s the Purpose of This Building Block and Why Does it Matter?
Recently we discussed the importance of building your construction business on a solid foundation and how paperwork is outside of most contractor’s comfort zones. I know, I know paperwork is not a very exciting topic, but neither is concrete. And we all know how important concrete is in supporting a building. The same is true for paperwork and your business.
As we discussed previously, one of the three foundational piers is administration and finance. One of the building blocks in that pier is a Job List which offers valuable information for forecasting the company’s financial needs and production plans.
Just Knowing That There’s a Problem is More Than Half the BattleAs we go through the daily actions of living our lives, we become oblivious to things on the periphery. This is especially true of things outside of our expertise. This lack of awareness includes things like construction if you’re not actively involved in the building industry. When there is a situation that catches the attention of someone who is not a construction professional, it begs the question of…what do I do?
Because Admin and Finance are Out of the Contractor’s Comfort Zone
Most trades people like doing physical work, not paperwork. They like building things, not sitting at a desk making proposals or putting numbers in spreadsheets. Avoiding paperwork is one of the biggest reasons construction companies struggle to stay in business.
Because If You Don’t…It’s Likely to Come Crashing Down Around You
If you own or operate a business, I’m sure you’ve experienced the feeling of your world crashing down around you. There are a variety of different reasons this happens. A few of them may be due to things out of your control. But, more often than not…it’s because of bad decisions we made.
Most of us that are self-employed started out learning our trade as an apprentice working for someone else. This is how I got started. The problem with this is that while I learned how to build a building, I wasn’t taught how to build a business. This is a critical part of why so many businesses don’t survive.
Like Any Project That Has Some Size…It Takes Some Time to Build
A few weeks back I told you about my plans to convert my blog posts into podcasts. We started by discussing the why question. We came up with the answer of – being able to help more busy people find solutions for building their dreams.
Next, we talked about how we would ever get blog posts turned into podcasts. It was determined that if I was going to do this…I was going to need some help, i.e., Nic at AdWise Creative. Nic’s help has made a huge difference in what we were able to accomplish.
As business owners, entrepreneurs, hardworking employees of companies, and active people, we find ourselves busier than ever during this time of the year. As we approach the end of one year and begin preparing for next, there just isn’t enough time to get everything done. Add to this the Holiday season and everything that goes with this…it can get overwhelming.
As busy people we struggle trying to get everything done. The thing we need to remember is…We don’t have to get EVERYTHING done.
Instead, we should prioritize our actions and focus on the first next thing. What is the most important thing currently on the list? At the same time we need to remember there is a limited amount of time available.
Too Often Once the Goals Are Planned…We Forget the Achieving Part. This is like having plans to build a building and once you get the blueprint drawn…you stop. You have a picture you can hang on the wall, but the building never gets built. Having a plan before you start is good, but it’s not enough. If you don’t dig some dirt and drive some nails, nothing is accomplished.
The third part of a Construction Contractor Story. Applying the tools of Building a Better Buisness Proposal System.
The second part of a Construction Contractor Story. Applying the tools of Building a Better Buisness Proposal System.
The first part of a Construction Contractor Story. Applying the tools of Building a Better Buisness Proposal System.
The eighth lesson in the Building A Better Buisness Propsal series. Once you have a signed Proposal, conclude with a Contract. The Contract completes the Proposal process and covers things beyond construction. Things like funding, additional documents, property boundaries, time within which the project will be started and terms and conditions.
The seventh lesson in the Building A Better Buisness Propsal series. If you’ve ever done a jigsaw puzzle, you know how frustrating it is to get to the last piece…and you can’t find it anywhere. This is the same frustration a customer feels when they don’t have the full picture of what is to be included in their construction project. Giving the customer a complete and thorough proposal gives them the full picture.
The sixth lesson in the Building A Better Buisness Propsal series. The next step in the “Blueprint for Building a Better Proposal” is to determine the price for the project. We’ve talked a lot about the importance of communication to provide a clear description of the work to be performed. Now we’ll go through the process of determining consistent and accurate prices.
The fifth lesson in the Building A Better Buisness Propsal series. What is a Scope of Work? A Scope of Work "clearly defines the project requirements, milestones, deliverables, end products, documents and reports that are expected to be provided by the vendor. It helps in the smooth functioning of a project/work contract wherein both parties can avoid ambiguities and situations leading to dispute. It is the first step to building a mutually beneficial collaboration between a vendor and his customer."
The fourth lesson in the Building A Better Buisness Propsal series. Gathering important information as you begin the proposal process.
The third lesson in the Building A Better Buisness Propsal series. This is the third post in the Blueprint for Building A Better Proposal series. The first focused on the importance of communication between contractor and customer and the problems that can happen without it. The second listed the foundational pieces of the proposal system. In this post we’ll take an overview of the process and how the different pieces fit together.
The second lesson in the Building A Better Buisness Propsal series. Small and medium size construction companies struggle with preparing detailed and arcuate proposals. This problem isn’t restricted only to small companies. It begins there, but only gets worse until they either get big enough to absorb the costs of guessing at project costs or give up trying and quit. Preparing accurate proposals that communicate clearly doesn’t have to be a roll of the dice.
The first lesson in the Building A Better Buisness Propsal series. Every contractor, at some time, has had an unhappy customer. This is almost always due to poor communication and/or a lack of understanding. It may have been some small misunderstanding or might have been major enough to result in being fired or going to court.