Be a Visionary Construction Subcontractor

Be a Visionary Construction Subcontractor

Be a Visionary Construction Subcontractor

Think like a Visionary Construction Contractor

You might think that because we’re construction accounting specialists that we would want you to frame your vision with numbers. And frankly, we often do. Yet, on this occasion we’re suggesting you take a step back from the numbers and look at what being visionary means in a different light.

Setting goals, planning out the numbers, determining profit or loss are all part of what it takes to run a successful commercial subcontracting business. And we don’t take that lightly. Yet, we’ve noticed that among construction business owners, those who are visionary beyond the numbers are those who tend to end up with the best numbers.

Yep, setting your vision, acting with your vision in mind, and spreading your vision is a potent way to strengthen and grow your business.

Put simply, it is a step you can take to set your construction business up for long-term success.

Envision the contribution your construction company makes

It doesn’t matter if your people are pulling wire, laying in pipe, installing the glass, or participating in any other piece of the commercial construction industry because they’re all contributing to the end product. And yes, construction is one industry which anyone can see is greater than the sum of its parts.

It is so easy to see, it is absurd to think about. Can you imagine a GC saying to the client, “Well you know, plumbers are expensive, what do you think about not including plumbing in the plans? That would save you thousands of dollars we could apply to having better electrical solutions.”

The faucets, the drains, the pipes are all items which provide value to the package well beyond the cost of parts and labor. Health, safety, nourishment, and cleanliness all come to mind.

Yet, it is even more than what happens on the jobsite. Leaving the absurd aside, let’s look at the contribution your contracting business makes.

Down and dirty, deep and basic, it provides for you and your family. Yet there is more.

  • The well-being of your employees and their families
  • Provision for your subcontractors
  • Support of your suppliers
  • Contribution to the business landlord or mortgage company
  • Success of your service providers (like us)
  • Adding backing of personal and business associations you’re a part of
  • An allowance for charities or organizations where you and/or your employees volunteer or support financially
  • The cash infused into your community through vehicle purchases, insurance, banking needs, utility providers, and on and on

And! Well, there is always the end of the job. And, there is always the completed project. Plus, there is always the way your construction business contributes to the outcome of the building venture. There is satisfaction in being able to say, “I helped build that.”

Act like a Visionary Construction Subcontractor

Before we go on, take a minute to check out the 8 most iconic Marine Corps recruiting slogans.  You can link over to see the story behind each slogan, and it’s worth the look. Yet, I’ll list them here so you can see what their message is to the world and to themselves.

“The Marines are looking for a few good men.”

“The Few. The Proud. The Marines.”

“Teufelhunden.”

“First to fight.”

“Tell that to the Marines!”

“We don’t promise you a rose garden.”

“If everybody could get in the Marines, it wouldn’t be the Marines.”

“The Marine Corps builds men.”

Now we’re getting to the heart of the matter. These are recruiting slogans which are internalized by the men and women who walk through the doors, sign on the dotted line, and put on that amazing uniform.

There is vision in those recruiting slogans that is a part of the cycle that brings about the loyalty instilled in the Marines.

And, that is the kind of vision which will get potential new hires in the door and potential clients on the phone. It is also the type of vision which will help create loyalty from those new hires and new clients.

Internalizing your vision as well as passing on your vision is a powerful tool.

Tell Your Visionary Construction Story

Your vision must align with your core values and company culture. It should describe what your intentions are. Yet, when you first begin to structure your visionary construction story don’t fret about making it perfect. It could change.

Look at the visions these well-known and successful businesses had in their start-up phases.

Airbnb: “Connecting people who have space to share with those who are looking for a place to stay”

Facebook: “Creating an online directory for colleges that is kind of interactive”

Uber: “An app to request premium black cars in a few metropolitan areas”

Ooze Vision

Yes, there is some amount of future-thinking involved in creating the vision for your commercial subcontracting business. Yet, grounding your vision in the present, in the day-to-day operations makes it tangible and useful.

Here’s a personal example. My cousin, who lives in Oklahoma once wrote a visionary statement on the back window of her pickup camper shell. It turned heads. Then made people smile. And caused conversations. You see, she and her family were headed back to New Mexico to spend time with her parents, siblings, aunts, uncles, and cousins for the holidays. Her simple, poignant, and to the point vision read, “We’ll be home for Christmas!”

The beauty of this next example can be found in the punctuation. “Working for a safer tomorrow . . . ” Verona, Wisconsin fire department. Think about the options and promise in those three little periods suggesting there is more to the picture.

And, here is an example of Boring! “We are a family owned company, committed to becoming the contractor of choice, pursuing excellence through dedication, experience and disciplined employees with an ongoing passion to deliver quality, timely and profitable projects.”

Not only is it boring, you’d have a hard time getting your employees or your clients to find the heart of what that company does. Remember it? Not a chance!

Check out these visions to get an idea of what works.

“A world where everyone has a decent place to live.” Habitat for Humanity

“That people everywhere will share the power of a wish.” Make-A-Wish

“A world without Alzheimer’s.” Alzheimer’s Association

“To make people happy.” Disney

“To revolutionize the way people do financial work.” Intuit

Visionary ideas for reaching General Contractors

Want to be noticed by the GCs in your area? Here are a few succinct visions I thought of. Feel free to copy, reshape, or adjust any of these for use in your vision building exercises.

“Helping General Contractors look like heroes to their clients.”

“Making our clients plumb happy.”

“Partnering with General Contractors to be sure the lights are bright for their clients.”

“We dig deep to provide solid foundations for our clients.”

“Joining forces with General Contractors to exceed THEIR client’s expectations.”

These are designed with these things in mind:

  • Likely to get the attention of your target audience
  • Makes it easy for your employees to see the essence and capture the heart of your vision
  • Is bold enough to stand out from the crowd

Your vision should be big and bold. It should be engaging yet simple enough for your employees and your clients to remember – and live by. (Remember those Marines?)

If it is honest, turns heads, and gets people asking questions, then you’ve found a winner.

What do fiercely successful businesses have in common? They have a culture built on a succinct and memorable vision.

Visionary Construction service provider

So, what does the vision for an accounting firm whose clients are small to medium commercial construction subcontractors look like?

Helping our clients Run With the Big Dogs. [bold]

Want to know how we do it? Get in touch here or give us a call Toll Free: 866-629-7735.

Thanksgiving and Virtual Accounting and More

Thanksgiving is incomplete without pumpkin pie and giving of thanks.

Thanksgiving and Virtual Accounting and More

Thanksgiving and the presidents

Speaking of Thanksgiving, what kind of content creator misses the opportunity to wax poetic about a seasonal holiday? I mean, it is on the calendar and all, right? Pretty hard to miss a day that has been set aside by two very popular American presidents.

Two? you ask. Yep, two!

Thanksgiving and tradition

Then, of course there is all the jazz about food and family, food and football, food and festivities. Who would pass up the opportunity to grab some attention concerning one’s business and how it relates to turkey, stuffing, potatoes, gravy, dinner rolls, veggies, pumpkin pie and . . . uh, you know Pilgrims? Or, was that Puritans? 

Thanksgiving and content

Not to mention, there is all this talk about “evergreen content.” And, if you don’t happen to see this article until sometime in . . . say . . . I don’t know, maybe August of 2019 there is a very real possibility you won’t be all that enthralled about turning on the oven to cook up some fancy (and secret) accounting specialist’s audacious turkey recipe. Uh-huh! You know I’m right!

“So,” ye asks yourself, “how is she going to pull this one off? What is she going to do about the fact that the weekly blog post is scheduled to fall the day before Thanksgiving in the year 2018?” Read on, dear one, read on.

Thanksgiving and virtual accounting

We’ve already covered the “Thanksgiving and More” part of what this post is about. So, now we’re getting to the part about “Virtual Accounting.”

That is what we do.

We do the accounting for our clients in that all so important way – virtually.

And, if you’ve been around for a while, you may have seen or heard us mention that we have virtual morning meetings weekdays with our Schulte and Schulte team.

What you may not have known (until now) is that we open our meetings with prayer.

Yep, each morning one of us offers up a brief prayer. And, almost without exception the prayer begins with Thanksgiving. We thank God that we are part of a great accounting firm called Schulte and Schulte. Our thanks giving varies, yet it can include the means we have for meeting, our families and homes and so on. And, we often offer thanks for our vendors, or our clients, and the clients of our clients. Is that considered trickle-down praying? 🙏

Thanksgiving and our accounting clients

The gratefulness we have concerning our clients is part and parcel of who we are. If you are one of our clients, of if you’ve come across our radar as a potential client we give thanks for you, plus we ask for a blessing on you.

It is actually rather heady. We pray in gratitude for our chance to be a small part of the construction contracting industry. We watch how contractors shape the buildings, roads, bridges and more where we reside, work, shop, travel, heal, worship, and play and we are astonished by their accomplishments.

And, we are always thankful for our clients!

Schulte and Schulte is a virtual accounting firm which specializes in meeting the back office needs of  commercial construction subcontractors. From bookkeeping to company-wide systems building and a few things in between, we give our clients services that improve their businesses.

Plus, we are grateful for them and we pray for them. Want to learn more? Get in touch here.

Service and Your Construction Business

Service is the way you set your construction business apart.

Service is paramount

Service is what distinguishes your construction company from the others. You know it is true. Those working for you should know it’s true – but some won’t.

And, the sad part is, some of those who offer up poor service while representing your construction business will be the loudest protestors when they receive poor service elsewhere. Some people just ain’t got no manners! 😲

Just as Supreme Court justice, Potter Stewart could, while explaining pornography, say, “I know it when I see it,” we all know excellent service when we see it.

When you develop a company culture which goes beyond “be nice” you develop a company both potential clients and potential employees will seek out.

Let me put that another way. When your construction business is built on integrity, dignity, and courtesy clients will want to work with you and tradesmen will want to work for you.

Service is more than a word

It is an attitude. Passing on an attitude of excellent service to your employees and subs is your only defense from poor-service-syndrome. Be clear. Make sure everyone who represents your construction business (and uh, that means everyone in your employ or under your supervision) understands this is a bottom line issue.

Think about it, the thing your clients are most likely to remember is the direct interaction they have with you and those who represent your company.

Bad service example

Sometimes you can see it headed your way. Sometimes you’re blindsided.

Recently, my son-in-law made an appointment to have his truck serviced by the dealership where he purchased it. He showed up at the appointed time only to find he wasn’t on the schedule. Although that was an irritating moment it could have been soothed over in a number of ways.

But. It. Wasn’t!

Rather than saying, “Oh no, we’re sorry, we made a mistake,” the answer was “You didn’t make an appointment.” When my son-in-law used his phone record to prove he had indeed made an appointment the follow up answer was delivered dead-pan (with no emotion) and went like this, “You’re not on the schedule, we can’t fit you in, you’ll have to make an appointment.” While that last statement was (in all likelihood) true, it was also an example of customer service gone awry.

Good service example

This one is easy. It is what we typically receive on any given day and at any given business. You’re greeted when you approach the clerk. Someone asks if you want your items packaged a certain way. The wait-staff offers a refill on your drink before it is empty. You’re asked where you can be directed to find what you want. You transact your business and you move on.

You’re neither angry, nor inspired to write a glowing review of the great service you just received. It is normal. Almost every person or business rises to the level of good service.

Exceptional service example

Disney.

You’ve heard it before and from your own experience have likely encountered the exceptional service provided by Disney employees. I mean, just think, they even have the Disney Institute where business owners and organizations go to learn about providing exceptional service. How cool is that?

Oh, by the way, here is something that should be near and dear to the heart of every construction contractor – safety is the first priority when employees are being trained in “the Disney way.” I didn’t know that, did you?

Good and exceptional service compared

Good – A few weeks ago, I was with the family at a bar-b-que restaurant where I noticed my grandchildren had chosen side dishes of macaroni and cheese. It looked good to me and I commented on it. A few minutes later one of the wait staff put a small, plastic container in front of me with enough mac and cheese in it for me to decide that, yes, I would order a dish for myself.

Exceptional – Not too long ago, several family members gathered at Disney World for a reunion. One of the family members noticed that another of the group had a bowl of soup which looked good to her. She mentioned to the person eating it she would like to try it sometime. Within minutes a bowl of the soup was placed in front of her by a member of the wait staff courtesy of Disney.

Both were small gifts, one was simply better than the other.

Develop or update your service policy

Pay attention when you’re with your clients. Solicit their feedback before, during, and after each project. Ask questions. Try to understand their needs and goals and then do your best to make them your own.

Be prepared to always step to the plate. Never wait, hide, or sugar coat a problem. No matter how bad it is, deal with all issues with honesty and integrity. After addressing a problem, be ready with a solution. Let your client know how your team will deal with the problem. Your reputation depends on it.

Empower your employees with a flexible  approach. Devise guidelines for your team members that allow plenty of freedom to handle customers on a case-by-case basis. Include information concerning priority solutions and “go-to” fixes for common problems. Define the service principles and standards which guide all interactions within your construction business.

Service givens

Providing excellent service is a matter of having good excellent manners.

You and everyone working for you are a part of your Service Department.

Customer service supersedes skill levels and product delivery.

Poor service on any level reflects on every level.

Your employees will only work to the level of your personal standard.

You can take your place on our waiting list by getting in touch here. Simply state you want to be added to the list.

Our Clients Are Savvy Contractors – Take a Peek

Our clients are construction subcontractors.

Who our clients are

Our clients are construction subcontractors. Yet there is more to the picture. They’re ambitious, smart, determined, enthusiastic, resourceful, industrious go-getters.

We understand the position many of our clients are in when they come to us. They’re splitting their time between:

  • returning phone calls
  • developing new products or services
  • going on sales calls
  • hiring or firing employees
  • managing social media
  • doing the bookkeeping
  • answering email
  • checking the jobsites
  • invoicing
  • dealing with payroll
  • marketing
  • keeping employees motivated and happy
  • networking
  • and . . . well, simply putting out fires which are often left still smoldering.

This list from OSHA describes Construction Special Trade Contractors. And, it does a fair job of identifying the types of businesses our clients own.

How our clients are served

At Schulte and Schulte, we are advisers and consultants, not just bookkeepers or accounting specialists.

Why do we consider the difference important?

Bookkeeping is a component of a construction company’s financial health. Yet that is not the only component. We provide counsel and advice on financial and business issues. Advice that goes beyond the scope of entering the right numbers in the right place. It is our intention that this approach provides value to our clients in both visionary and in-the-moment ways.

It is important to us to help our clients get meaningful metrics and systems in place so they’re no longer flying blind.

We work with established construction subcontractors who have invested time and money into finding ways to grow their businesses. Subcontractors who are ready to take the next step. Subcontractors who must get familiar with and in charge of their numbers in order to grow their business and be profitable.

We partner with our clients on a long-term basis to ensure they get results from the work we do together.

Peek at our ideal client

Our ideal client is a construction subcontractor – but not “any old” subcontractor.

Here are the other things our ideal client is:

  1. Accountable and responsive
  2. Willing to listen to and act upon our advice
  3. Tech savvy or willing to learn
  4. Determined to scale their business
  5. Inclined to offer referrals

Peek at us

We provide accountability (beyond simple accounting) and hold our clients’ feet to the fire. The fire of staying on task, putting the right systems in place, and of understanding the metrics.

Are you ready to take the next step in growing your construction business? You can take your place on our waiting list by calling 866-629-7735 or get in touch here.

How to Know if Your Office System is a Mess

Office systems to keep you from having an office that is a literal and figurative mess.

Office systems – they’re no joke

Office systems could be funny, right? Let’s step back a moment and look at where this post came from.

As per my own advice, I keep a Squirrel List of ideas that have crossed my path.

Occasionally I scan through it when deciding what to write that will benefit our subcontractor clients. A while back I had written what became the title to this article (How to know if your office system is a mess) with a following note which said, “It requires a new file cabinet.” Yeah, I thought is was funny in my own off-the-wall way. You see, we often work with our clients to help them move towards a paperless office for the sake of both security as well as efficiency.

Next, I thought what other “funny” things can I add besides the file cabinet “joke” to come up with a lighthearted post for this page. Turns out office systems are a pretty down-to-earth item not to be tampered with – much. With apologies to Jeff Foxworthy I present the following guide.

Your office system might be a mess if:

Your cleaning crew can’t find your desk

The neighbors complain about the weekly trash overflowing – every week

You would rather be anywhere (including the dog-house) instead of your office

Your biggest business goal is to determine where in the office you left your mobile phone

It requires a new file cabinet

Your office system is important

Office systems in your subcontracting business are just as important as the systems you use in the shop, during the service call, or on the construction site. Get your office systems right and you are a step ahead of your competitors – a giant step ahead.

The absolute, down in the trenches, give-away that your office systems aren’t functioning well is this – you don’t have time for the important stuff.

You don’t have time to work on the things that will grow your business, such as:

  • identify new business opportunities
  • formulate ways to form strategic partnerships
  • find new ways to provide extra value to your clients
  • provide mentorship or training to your valuable employees
  • pursue continuing education concerning tools, supplies, techniques, and best office practices
  • enhance field productivity
  • meet with potential clients
  • develop an effective and evolving organizational structure

Your office system IS a mess when

In no particular order there follows a list of clues showing your office system is a mess – and these aren’t all that funny. If you check off too many of these, you need to rein in the chaos and begin getting your office systems in order. (And yes, the team here at Schulte and Schulte is good at helping our clients pull on those reins.)

Your systems are all and only in your head

There is no backup plan for when things go wrong

You have too many daily goals

Your website is stagnant

Your email inbox is multiple pages long or (worse yet) your physical inbox is over-flowing

People keep quitting

Your few documented systems include names rather than titles concerning who does the work

No one knows where to look for lost information

The phone ringing isn’t a pleasure but a disturbance

You haven’t created (documented) repeatable systems for all your processes

You’re unsure of your costs and expenditures

You don’t know who owes you nor how much they owe

You’re unwilling (or don’t know how) to remove non-performers

You spend too much time putting out fires

Neither you nor your employees can describe your company culture (learn how here)

The physical layout of your office doesn’t lead easily to next-step tasks

You don’t have clarity of purpose

You don’t have a growth-through-systems mindset

And last, but not least . . . it requires a new file cabinet 🤡

If you like having accounting and office systems that work to make you more efficient and effective, therefore making you more profitable, then you can get in touch here or by calling 866-629-7735 to set your place on our waiting list.

Work in Progress Accounting

Tonya Schulte – Construction Accounting Specialist

Recently Tonya, one of our founders, was asked by CCAN (Construction Company Advisor Network) and Knowify to present a webinar on the basics of Percentage of Completion Accounting. The webinar is for those who need to understand the concepts behind the method, whether they are contractors or accounting advisors to contractors.

It all boils down to . . . well that is what the webinar is all about.

Before you jump in, I want to alert you to the fact that shortly into the webinar (at about 4:23) there starts to be a little bit of technical difficulty. Tonya’s voice is sketchy and cuts out a bit here and there. Hang tight – the slides are still there and quickly enough the voice issues are straightened out.

You’ll be able to hear her just fine before she gets to the deep dive of explaining how to use the principles involved in Percentage of Completion Accounting.

Now you can see why this method of accounting can be so useful for construction contractors.

The team here at Schulte and Schulte are trained in using this method for our construction contractor clients. If you’re interested in joining our successful contractor clientele, be sure to get your place in line on our waiting list by calling 480-442-4032 or Toll Free: 866-629-7735.  Simply let the person answering the phone know you would like to be added to the waiting list.

5 Mistakes Construction Contractors Make When Trying to Scale

Mistakes construction contractors make when trying to scale

Mistakes construction contractors make when trying to scale

Trying to do it all

Superman you’re not. KAPOW! Nor are you Wonder Woman. SNAP! So, as we say in our office, DWI (Deal With It.) We also say LIF (Life Isn’t Fair) but, that’s another story for another time. Now, we’ll concentrate on the fact that if your intention is to scale your business, you must have key employees and advisors in place in order to think strategically and focus on growth.

From the back office, to the front office, to the shop, and in the field, having people in place who can help you carry the load is the difference between wishful thinking and decisively moving forward.

And, if you wear all or most of the hats in your construction business, your goal is to replace yourself one position at a time. Finding every task you presently perform yourself and delegating them to your employees and freelance advisors is a sound business tactic that will move you forward more quickly.

In addition to your lawyer, your insurance provider, your bonding agent, your tax preparer, and your loan providers you do well to consider having excellent freelance advisors on board. Everything from virtual assistants, to human resource experts, to accounting advisors, (That’s Us!) will free you up to find ways to work on your business rather than in it.

When you’re able to delegate, (in-house or out) you have the precious commodity of time. Time to spend judiciously planning for the next steps that are about to take place.

Chasing squirrels

Dug, the dog in the movie “Up” is delightfully fun, because he is the ultimate squirrel chaser. And, because he is so easily distracted he is the perfect example of what it sometimes feels like to be the owner of a construction contracting company. You know, there are squirrels at every turn.

It is downright hard not to chase idea after idea and change after change. Squirrels make it difficult to settle with one (good enough) option. Perhaps it is business objectives, marketing strategies, client types, or even (hold your breath) other business ventures.

And, the squirrels can be as subtle as offers for business trainings which seem attractive but don’t really push you forward in meeting your immediate goals. Another insidious squirrel can be found in the purchase of tools or technology that aren’t needed.

One way to deal with squirrels crossing your path is to take note of them. If an idea, thought, or offer attracts your attention, write it down. In other words, keep a squirrel list. Then quickly decide (use your leadership powers to be decisive) if they are good, mediocre, bad, or future squirrels. Sometimes the simple tactic of “sleeping on it” will help you decide. Other times you may wish to visit the people from the above section, (your in-house and outside advisors) before making a decision.

One last thought on squirrel chasing – don’t become befuddled by the off chance you should have followed that one “great” squirrel. You’re in the construction industry, there are tons of squirrels in the construction forest. Another will be along soon enough.

Neglecting to think like their clients

Clients focus on the end product, not the process. Construction clients don’t like the changes you force on them. They do not want to be disrupted. They simply want what they want when they want it. Yet the very nature of the beast we call “construction contracting” means you’re disrupting the lives of your clients, be it for only a day or for many months.

Try putting yourself in their shoes. Suppose when you went to buy a car you were told that for the next six weeks you would have to figure out another way to get to work, to the grocery store, or to the movies because your car would be out of commission. Not only that, you would have to spend some time daily watching as piece by piece your new car was assembled . . . in your driveway. Not a pretty picture. Yet, depending on your trade you may be asking your clients to endure something very similar.

And your clients who (remember?) want what they want when they want it, are probably not all that prepared to have you disrupt their lives. You can help them get over that hurdle through constant and honest communication before, during, and after the project.

Oh yeah, don’t forget this part. Clients HATE surprises. Clients will be more understanding of a temporary defect or delay if communication comes first from you.

It doesn’t matter if you’re a service provider, a general contractor, or a sub; it doesn’t matter if you’re on a commercial site or a residential site, there is always a client and you must always consider ways to think like your client.

Failing to document their processes

You may have heard someone joking on one of your social channels that if there are no pictures – it didn’t happen. That is fun and funny. Yet the truth is if there are no documented systems there is no scalable business. If you want your business to grow, you must have systems in place with written instructions concerning how the processes work in order to maintain the system. If it is all in your head, then by golly, it is all in your head that you own a viable construction business.

Wendy Tadokoro from Process Street tells Why You Need to Document Business Processes. If you don’t know, check out the article, it’s eye opening.

Now that you know why, it is time to learn a lot about how (and more about why.) Sam Carpenter wrote a book titled Work the System. You can find the book and other helpful information on his website. It is worth the time it takes to check it out. He offers insight into how to build a successful business through the use of documented processes. His story of how the business he was about to lose was turned around from the brink of disaster is captured throughout the book. If he can’t convince you how important the process of process capture is, then probably no one can.

Forgetting that trimming fat is part of scaling

Much like starting up, scaling up requires some belt tightening or fat trimming in order to make it through. It isn’t simply a matter of hiring more hands, finding more work, and making more money. If your additional labor, travel, or equipment costs eat up the additional money you make on a variety of jobs you’ll find all you’ve gained is more headache.

What scaling really means is finding a way to increase your profits. Increasing your profits means finding ways to earn more money while not spending more money.

Inefficiencies exist in your present organization. Some systems are in need of repair or should be eliminated. Other systems need to be developed.

You may even have some people who will no longer fit into your company for any number of reasons. Perhaps they don’t want to grow, can’t see your vision, simply don’t gel with the rest of your staff.

Focus on operational efficiency.

Then focus on motivating your team towards a common goal of scaling up and being relentless in achieving it.

Is your bookkeeper stuck in the old way of just doing the books? Then we would love to show you what modern bookkeepers do. As accounting advisors, we help you drive profitability. Give us a call to set up a consulting session. 866-629-7735

Change Orders

how to deal with construction change orders

how to deal with construction change orders

In a perfect world war, divorce, and change orders wouldn’t exist. Sorry, we live in an imperfect world. As for war and divorce – I got nutten. Yet, I can provide some information concerning how to deal with the inevitable change orders that are going to arise during many construction projects.

Change order basics

Construction change orders are used for altering a construction contract. They are contract documents both parties agree to, signifying they understand there is a change to the original agreement. Further, a change order defines the costs and time factors which will affect and alter the original construction contract. That being said, it is well to develop a proactive change order management strategy.

The first way to diminish the use of change orders is to create the best initial contract. And, because unforeseen conditions, designer error or omission, or a change of heart can all be starting points for change orders it will serve you well to have a formal change order request process addressed in your original contract.

Building your change order process

These 5 steps are a good foundation for building your change order process.

  1. Develop the timeframe requirements concerning initiating a change order request

 

  1. Determine what specific information and documentation will be required

 

  1. Note who the authorized agents will be concerning the approval of the change order

 

  1. Lay out how communication between all parties involved will be handled

 

  1. Negotiate terms concerning scope, costs, and timeframe

It is also a good idea to let your clients know that submitting a change order request does not immediately cause work to change. There can very well be time involved in your research concerning the costs of labor and materials as well as other factors.

Other change order considerations

If one phase of the construction must be torn out in order to accommodate the requested changes the costs and time constraints are likely to be considerable. That is probably the easy part for your client to understand.

What they may not know is the other costs you’ll be considering concerning what must be changed. I asked our team here at Schulte and Schulte to give me some ideas concerning what monetary factors you, the construction contractor need to consider when negotiating a change to your original contract.

Depending on which trade you’re a part of, all or only some of these items may be factors.

  • Labor
  • Materials
  • Equipment usage
  • Restocking fees
  • Shipping costs
  • Taxes

Be sure to include each item in your calculations concerning the costs associated with the change.

Change order forms

You can get a general idea about a change order form here.  Of course, this site offers this disclaimer should you choose to use their form. “The forms on this site are provided ‘As-Is.’ By using these forms you agree that you are using them at your own risk. Most of the free forms are not prepared by an attorney and may need substantial modification.”

You can see another example of what your change order form could contain here.

Better yet, (and, this is what we recommend) if you’re using Knowify, there is a simple way to deal with the change order form. Check out the video here.

We’re able to provide information concerning the use of Knowify in your construction accounting process as well as your change order process. Get in touch here or give us a call 480-442-4032 or 866-629-7735.

5 Strategies to Retain Your Best Employees – Part 4

Retain construction employees through the use of traditions, rituals, and fun.

Retain construction employees through the use of traditions, rituals, and fun.

This is the fourth in a 5-part series about specific strategies you can use in order to retain your best construction employees. You can find the first installment here, the second here, and the third here.

Have fun!

Of all the things that make you a Construction Industry insider, one of the most overlooked is knowing how much fun it can be. Just one of the many reasons to be in the construction trades is the camaraderie which tends to be a part of the scene. The guys and gals who are “in the ranks” often participate in good humored horseplay, fun “competitions,” and silly banter. Turns out, according to this study, having fun is good for them and good for your business.

And, you can set apart your construction company as an exceptional place to work by strategically implementing fun activities for your employees. Part of that process becomes building traditions and rituals into what your crews will experience in their day to day activities. Repetition is the key.

Think about the fellows who stand on a stage with the express purpose of getting folks to laugh. Comedians are taught and understand that repetition of certain key words or specific ideas will often send their audience into fits of laughter before the words are even out of their mouths. (If you doubt me, check with Tonya, one of our founders, who used to be one of the actors in this comedy crew at Marriage can be Murder, in Las Vegas, Nevada.)

Traditions and rituals

From your own experience both as a family member and as a part of a professional team, you know traditions help create a sense of shared history and close-knit teams. Not only that, traditions and rituals can give employees something to look forward to on a day-by-day basis.

While it is possible for you to create certain traditions, they’re often best when they come about organically or spontaneously. For example, when “George” describes himself as “a high walker and a smooth talker” add those words to his name each time you speak with him, or give him a reward, or mention him in meetings. Help the happy accident circumstances which give the crew a laugh on the job become part of the rituals your crew can tell the newbies about.

Creating workplace rituals and traditions is a good way to give your employees something to look forward to. Want some ideas? This article from Michael Kerr presents a variety of options to consider.

The icing on the cake

Lastly, the icing on the cake of employee retention is that happy crews attract happy clients.

There is a Cold Stone Creamery store in the Phoenix valley which has a young crew of people who our family watched chant and sing their way to a generous offering of tips one busy ice cream evening. I’m not suggesting your construction crews learn a few songs together (but, if you find they have the talent . . .) What I am saying is that when your people can demonstrate to your clients that your company is a happy place to work, they also demonstrate it is a good place from which to purchase goods and services.

Here is another example of how Southwest Airlines (a company known for having fun) encourages their employees to bring some humor into the lives of their customers.

Like I said, of all the things that make you a Construction Industry insider, one of the most overlooked is knowing how much fun it can be. Making sure your crews are experiencing the pride that comes with building is great. Making sure they are having fun while they do it is even better.

Your turn

Think of some simple ways you can encourage your team to have fun while still doing a great job for your clients.