Part 2 – Let Middle Managers Manage

 

 

This is part 2 of a 2-part discussion about growing your business through growing your middle managers. If you missed part 1 which concerns what you as an owner should be doing in your construction contracting business you can go here.

Have you ever gotten a chuckle out of the scene when a three-year-old announces, “I do it myself,” over a task which he may or may not be able to accomplish? What we usually do is allow the child time and space to prove he can or prove he can’t. Either way, the child has learned something. You may have to use the same approach when training the folks on your middle management team. Let them try. They may succeed, they may fail. Either way they (and you) have learned something.

That being said, it is imperative to remember, “I tie my own shoes,” is different from “I boil my own water,” and you’ll, of course, need to be discerning when handing off assignments which are age (or skill-level) appropriate.

Grow middle managers for your construction contracting or service business

You may have any number of different titles for your middle managers. Some which come to mind are:

  • superintendent
  • operations manager
  • project coordinator
  • foreman
  • project director
  • safety manager

Whatever they are called, the people who make up your team of middle managers are important to the lifeblood of your company.

3 important components used to build your middle management team

Communicate with them

Listen to them. Listen to them. Listen to them. Yes, you’ll have essential information to pass on to them, yet it is important to engage them in collaborative conversations. Listen to their concerns, hear their feedback, discern their needs. Think about where they’re coming from, what their perspective is and be prepared to ask questions to define the conversation. When you’re aiding them in understanding they’re a middle manager who is important to the function and goals of the company, they’re more likely to align themselves with the mission and purpose of your construction contracting or service business.

Train them

Develop their leadership skills. It is important to model good leadership skills in your interactions with middle managers. You should also consider providing scheduled training in various areas. The training may take place in a class room, online, at a boot camp, at a conference, or “on the job,” yet is best not left to chance. This article written by Brad Humphrey from For Construction Pros offers valuable information concerning training superintendents. The information found there is good across the board for your various middle managers.

Sharpen them

Maintain a set of questions to use when conversing with them. While the questions shouldn’t be considered ice-breakers, there is a component of “getting to know your people” that will come with asking good questions. Try questions like this:

  • What have you learned this week?
  • When was the last time your routine changed?
  • What are your bottlenecks?
  • Where is the most friction on this job?
  • What isn’t working?
  • How would you fix it?
  • What decisions can I help you make?
  • How is everything going?
  • Which task did you most recently delegate and to whom?
  • What great thing happened to you professionally or personally this week?

Provide strategic input to your middle managers and then allow them the freedom to implement those strategies. Micromanaging them is a waste of your time as well as theirs. Instead, make sure they know and understand their tasks and responsibilities. Finally, give them the power to make decisions instead of bothering you.

Your call to action

The first step you can take is to make a list of everything you can delegate to your current middle managers. Then using the three steps outlined above, begin growing your middle managers in ways that will in turn aid you in growing your construction contracting or service business. Delegate the proper tasks to the right people and be ready to lead them going forward.

Part 1 – Let Middle Managers Manage

This is part 1 of a 2-part discussion concerning growing your construction contracting or service business through growing your middle managers. In this section the discussion will center on what you as an owner should be doing in your business while allowing your middle managers to manage other aspects.  

You’re the boss – own it

You have better things to do than being on job sites all day long. Put your time and effort towards critical, big-picture decisions concerning your construction contracting business. The areas you should consider are:

Operations

reducing cycle times

eliminating waste

increasing on-time delivery

Financial

preparing budgets

reducing outstanding debt

growing profit techniques

Analysis

improving customer satisfaction

discerning inventory turns

identifying repeated bottle necks

Leading

communicating the vision

holding others accountable

gaining new industry insights

instructing or providing instruction for employees

It is your job to clearly visualize the end result of each job and how that job affects your overall goal of company growth and profit building. Therefore, you do well to assign responsibilities and accountabilities to the correct people — the middle managers, thus assuring you get there.

In part 2 we’ll look at what it takes to have an excellent team of middle managers doing their jobs well, making it possible for you to do your job well. You can see part 2 by going here

The Top 5 Critical Problems Schulte and Schulte Solves for Owners of Construction Contracting Companies

 

When you first became a construction contractor or construction service business owner it was pretty simple – get a job, do the job, get paid, see how much money you made. Now, things are different. You have people working for you, people who rely on you in order to make a living.

Knowing the whats, hows, and whys of construction accounting has become much more difficult.

Following are 5 critical problems Schulte and Schulte solves for clients on a regular basis.

Not knowing how to maintain cash flow

“Projecting future cash flow is something I’ve never understood how to do.”

Solution: Once the system is implemented you’re “in the know” daily concerning all the angles of cash flow.

Not having proper records for the IRS and for other potential needs – like proving credit worthiness

“I’m not even sure what I should keep, much less how to keep it.”

Solution: Your records are brought up-to-date and kept current so you’re always ready for both the IRS as well as for investors or loaning institutions.

Constantly having to chase work to build revenue

“It seems if I’m going to make money I always have to find new work (some I don’t even want to do) and it drains my time, energy, and capital. There’s got to be a better way.”

Solution: You’re taught smarter ways of maximizing revenue rather than the eternal work chase.

Not understanding their job costs

“I know it is more than just what I pay my people and how much I paid for supplies, but I’m not sure what all goes into job costing.”

Solution: You know what the job costs are for each job and for each type of job, giving you valuable insight concerning future jobs.

Not having enough time in the day to do it all as a small business owner

“I don’t hardly have time to breathe, much less time for figuring out all the ins and outs of construction business accounting.”

Solution: You’re relieved of trying to “figure it out.” The Schulte and Schulte pros take away much of the “drudge” of bookkeeping while informing you regularly about the financial health of your construction contracting or service business.

Solution: Maximizing Your Profits.

Now that you know we offer solutions for your critical problems, it is time to stop messing around and trying to figure it out yourself. Reach us through this number 480-442-4032 or get in touch here.

A Dozen Reasons Construction Contractors Use Job Costing

You’ve already figured out that when you own a construction contracting or service business your world is colorful. Some of the myriad of “things” on your mind are job sites, retainage, percentage completed, purchase orders, prevailing-wage rates, payroll, change orders, subcontracts, AIA billings, and equipment usage.

But did you know about the contractor’s friend called Job Costing? Did you know job costing is really designed to make all the above “things” take their rightful place in maintaining the overall health of your construction firm?

Look at job costing as a way to Measure and Monitor, to Weigh and Watch, to Quantify and Qualify.

Getting it all out in the open

The information gathered through job costing is invaluable to you as you grow your construction contracting or service business. And here are a dozen reasons:

  1. Job costing will help you identify the most and least profitable areas of your construction company.

 

  1. Job costing is one of the best ways to develop an accurate budget for your construction firm.

 

  1. You can use the information concerning labor and materials costs to aid in determining overhead costs.

 

  1. You’re able to carefully analyze job costing reports for completed jobs as well as jobs-in-progress.

 

  1. Job costing allows you to put into action a billing system that is tied to actual and committed costs.

 

  1. With job costing you can learn which types of jobs are your bread-and-butter jobs.

 

  1. Using job costing will allow you to see the division of labor and labor burden.

 

  1. Job costing allows you to analyze where you’re spending so you’ll know more about what works and what doesn’t.

 

  1. Through job costing you’ll obtain information that will allow you to be more precise concerning billing.

 

  1. Job costing shows you what margins you’ve been sacrificing on past estimates.

 

  1. Through job costing you can factor in overhead expenses in order to get a better understanding of individual job profitability or loss.

 

  1. A mature job costing system gives you the ability to categorize every single expense your construction contracting business incurs.

Don’t work in the dark

Without job costing information you’re working in the dark.

Using job costing reports is an important way to improve your business as well as a way to improve the way you do business.

The Schulte and Schulte team is excellent at helping construction contractors make heads or tails of job costing set-up and use. Want to know more? Give us a call 480-442-4032 or Toll Free: 866-629-7735

What Your Potential Clients See When They Look at Your Construction Contracting or Service Business

A construction contracting company or construction service business is a reflection of its owner; it is also a signifier for where the owner is going.

The ideal construction contracting company reflects the owner’s skills and competence built on a foundation of hard work and integrity.

With thanks to Jeff Foxworthy, I submit the following:

You might own an ideal construction business;

If you’re Competent in your trade and in running your business.

If you’re known in your social and work circles as being Credible.

If you’re Experienced in both your trade as well as business ownership.

If you make it a point to stay informed and monitor changes within your industry. If you’re a Life-Long Learner.

If you’re Reliable over and over and over.

If you’re Detail-Oriented, Observant, Meticulous, let’s face it – a Persnickety person.

If you’re just plain easy to be around. If you are (in other words) Personable.

Working with you to keep you at the top of your game

If you’re a part of the Schulte and Schulte Client Family you already know we do much more than “the typical bookkeeper;” we work with you to help you reach your goals, scale your business, and be as profitable as possible.

If you’re not yet part of the circle and you want to find out what the Schulte and Schulte Client Family already knows, give us a call. We’ll get you on the schedule to learn more about what we do, how we do it, and how you can get in on it.  480-442-4032 or Toll Free: 866-629-7735

Dancing into a Leadership Role in Your Construction Contracting Business

While it is apparent learning to dance takes time and effort and mastering the moves takes practice, we sometimes forget that being a good leader also takes time, effort, and practice (and it doesn’t hinge alone on how much innate talent you have.)

Knowing you have the skills of powerful leadership

As the owner of a construction contracting or service business it is imperative for you to take the time, make the effort, and be willing to practice the skills involved in leading your team. So, how do you know you’ve got it? Step back, listen, and see (really see) what your team members have in their minds when they see you, think about you, or (suck it up) talk about you.

[Note: I know some of you are male and some female, yet I don’t want to go through the language gymnastics of switching between genders while writing, so please understand I will use the words “he, him, his” in their age-old concept of mankind which encompasses both male and female.]

While your team may not recognize the bare, basic fact that you’re good at communicating and motivating they will be likely to say these things about you.

  • He listens to what I and the others tell him.
  • He handles dissent or even polite debate well.
  • He’s good at understanding strategy.
  • He has an ability to execute plans.
  • He’s good at project planning and gets the concept of following timelines.
  • He connects with all sorts of different people.
  • He is good at getting people to learn and grow.
  • He takes responsibility even when he has been wrong.
  • He has credibility and integrity.
  • He’s someone you can count on.

Making your vision become everyone’s dream

Be a leader who is confident enough to hire people you can trust, people you let do whatever they do best with a minimum of oversight.

Allow your mentors, advisors, and trusted employees to share their opinions before you make decisions.

Establish habits, structures, and procedures that help you and your team keep your vision in sight.

Take time to acknowledge (in big ways) your employees and team members for their effort or accomplishments.

Putting on the right dance shoes

Whether you wear work boots, tap shoes, or some other footwear keep in mind growing your construction contracting or service business, scaling into a profitable position will include time, effort, and practice at leading well.

5 Simple Ways a Tradesman Makes the Mental Change to Become a Scaling Business Owner

 

Before we get to the 5 simple ways to work through the mental change let’s look at an example of how mental changes or growth require process.

Teaching your kids kindness

A friend of mine once commented she would like to be able to add “kindness” to a list of traits she could teach her young children. She would like to be able to jot “Teach Kindness” on the list, teach the kindness trait, then check it off.

If you have young children, or if you’ve simply been exposed to the darling little monsters, you probably already know teaching “kindness” is a long-term endeavor. Heck, sometimes as adults we find we must pick up where our parents left off, teaching ourselves to be kind, reminding ourselves of the merits of kindness. Somewhere along the way we find the teaching of kindness is a process.

Scaling your construction contracting or service business

Turns out, scaling your business is also a process – it isn’t something you can put on a checklist and then check off after it is completed. It isn’t a destination you can point to on a map.

Yet, scaling requires a purpose and a vision. As a matter of fact, in order to scale your construction contracting business, you must develop a scaling frame of mind. You’ll need to make the mental change from being a tradesman, to being a business owner, then to being a business owner whose business is profitably scaling.

5 simple things to practice through the process of becoming a scaling contractor.

  1. Set an example of trustworthiness for your employees and crew. Integrity – it goes a long way.
  2. Be flexible, very flexible – except when it comes to your core values.
  3. When new ideas, solutions, or concepts come your way practice thinking “maybe” rather than jumping directly to “no.”
  4. Begin instilling your “company culture” into your own thought processes as well as those of your employees. “Company culture” is how you pass on the “values” of your construction contracting business.
  5. Get in the habit of surrounding yourself with other successful and goal-oriented people. For example, join your trade association, hire great people, and select your service vendors well.

When you develop a scaling frame of mind you move beyond the bounds of your craft to the realm of successful business owner.

Owning then Scaling a Construction Contracting or Service Business

In the beginning you had to:

  • Figure out the legal, financial, and operational aspects of your business
  • Understand how to communicate and negotiate
  • Learn how to promote your business, yourself, and your products or services
  • Comprehend how to keep the accounts, stay organized, and run the office
  • Grasp the responsibilities of entrepreneurship

Now, you’re ready to scale

Not simply running with the big dogs – being a big dog. You’ve mastered so much already and the time has come to master even more. In fact, you’ll need to hone the above-mentioned aspects of starting a construction contracting or service business to a greater degree.

While it doesn’t hurt to know how to pick up the tools of your trade and apply them to good use what matters more is understanding the tools inherent to being a successful business owner.

Consider this

Which is more important?

  • Knowing how to cut a short board or knowing how to cut a meeting short
  • Knowing how to paint a room or knowing how to paint the picture which your potential customers need in order to purchase a painted room from you
  • Knowing how to twist the wrench or knowing how to twist out all the information necessary so you’ll be able to go above your clients’ expectations
  • Knowing how to celebrate your personal achievements or knowing how to celebrate the accomplishments of your crew
  • Knowing how to build then install a cabinet or knowing how to build then scale your construction contracting business

Mindset matters

It is perfectly acceptable to be proud of the skills you have and your ability to accomplish the various tasks associated with your particular trade. Those skills have likely played a great part in getting you where you are now.

And, if you’re going to scale your construction contracting business now is the time to build on the additional skills you’ve been learning all along. Not every carpenter, electrician, plumber, painter, or other tradesman has the where-with-all to become the owner of a business within their discipline. But, you do! Congratulations!

Because you’ve already accomplished much, it is only a small degree of difference to begin your journey of scaling your construction contracting or service business.

Let’s put it this way, we at Schulte and Schulte don’t believe in mumbo-jumbo about wishing or thinking your way to success. We do believe it takes hard work and the proper mindset. We further believe that, while “thinking you can” doesn’t always accomplish the task, “thinking you can’t” will always achieve its goal.

There is more to learn

In an earlier article, I talked about some things you should be doing when working ON rather than IN your business.

  • Planning
  • Hiring
  • Training
  • Leading the management team
  • Delegating
  • Presenting
  • Selling
  • Negotiating
  • Tracking results

If you’re not proficient at any of these skills, begin learning and practicing. Being the leader of an enterprise which is scaling is not an easy job, but it is certainly a rewarding one and one worth putting your best efforts into.

We at Schulte and Schulte are happy to stand beside you and work with you to aid you in scaling your construction contracting or service business.

10 Qualities Needed for Scaling Your Construction Contracting or Service Business

10 Qualities Needed for Scaling Your Construction Contracting or Service Business part 1

Being an entrepreneur in the construction field comes with a few challenges other entrepreneurs don’t face.

There are a lot of ideas concerning what it takes to be an entrepreneur. For example, you’ll hear things like:

  • You need to be motivated by challenges
  • You’ll have to be tenacious
  • You’ll need the support of your family and friends
  • You will be one who loves new ideas
  • You must see and fulfill needs
  • You should notice how things can be improved

And, those are all good ideas about entrepreneurship, (you’ll do well to heed them) yet there are 10 very specific qualities it takes to be an entrepreneur in the construction field, to be a construction contractor who is ready to scale.

  1. You need to get “shower ideas” – and act on them

Even if it means you need to bolt from the shower to call your superintendent to tell him the solution you’ve discovered concerning the nagging problem you been having with [you fill in the blank.]

Perhaps you need to keep one of those gizmos in the shower meant for writing on in wet conditions – although you’re more likely to make a few drawings then add a note to get true measurements.

Or, it could be you create a mantra in your head as you’re driving down the freeway, so you’ll still remember your great idea when you reach home. Therefore, you’ll have the basics of the good idea, and you can put it into action.

The main point is, no matter when (in the shower or not) you get ideas you’re willing to put the idea into action in order to make your construction contracting or service business better tomorrow than it was yesterday.

  1. You’ll have to love growth – in oh so many ways

The unique position in which you as a construction contractor find yourself is one in which growth; your own, your businesses, your employees, your community all meld together into one cohesive unit that turns out to be rather stunning.

As you and your employees work together to grow your business while being a part of the growth of your community there comes a moment when you can stand back and say, “I did that!”

It can start at the level of being able to say, “Because I and my team had the right system in place in my construction business, I took Joe Right from apprentice, to craftsman, to master craftsman, to supervisor.”

It might take the shape of understanding that because you and your employees showed up there are more families across your city who need not worry about how to stay cool or warm or protected.

Or, it could be you drive past the latest of your builds and see the finished project knowing you had an integral part of making sure that location houses a family, or provides a place of employment for many, or allows a space for medical personnel to care for patients, or improves the infrastructure of your city or state.

Growing your business is important to you, partly because you know you’re growing more than “just” a construction contracting or service business. You’re growing, your people are growing, your community is growing. Stunning!

  1. You need to understand you’re a leader – and lead the way

Whether or not you awaken in the morning thinking, “I’m a leader,” you really must possess the qualities of a leader if you’re going to pull this off. If you own a construction contracting or service business you’ve already taken a lot of steps in the leadership role.

Being THE leader means you’re the one with the vision of how your construction contracting business fits in the industry now, how it will look a year from now, and what it will look like in the long term.

You also have to be able to communicate the vision in ways that enlighten your potential customers, enable your employees, and empower you as well as your team to each next level.

You are the one who is creating the work culture for your employees, delegating, making decisions, encouraging your team, and (bottom line) working on your business, not in it.

It doesn’t matter if you know how to pick up and use the tools necessary to build for or provide a service your customers. You can and should get someone else to do that. It does matter that you know how to be an entrepreneur, how to use your financial reports to lead into the future, how to see the big picture and take the necessary next steps to scale your business.

You may wish to join a structured entrepreneur group where other members will be available as mentors or advisors concerning the specific issues you face as a business owner.

  1. You need to network with your colleagues – for their sake as well as your own

Let’s face it, people like doing business with people they like. Beyond that, when can you ever have too many contacts in your chosen field?

Join your trade association

Most trade associations host various conferences, events, and meetings on a regular basis. By getting involved you have an excellent place to make new connections. It takes more than just paying the membership fees, it takes becoming a recognized and trusted face. When you become known as the “go-to person” it just makes sense that when business opportunities do arise, so will your name.

Yet, if you live in a location where regularly attending meetings of your trade association (think – more than a 2 hour drive) requires too much time and travel you may want to consider the next option.

Join or develop a private group

I recently read about a fellow who had formed a private group which he said included eight to nine other subcontractors, developers, and a land broker. They call their group The Meeting of the Geniuses, and they get together every six weeks at a favorite (in his words) “watering hole to discuss what is going on and what we are working on at the time, and football, and cars, and…….”

The crucial aspect is they can support one another, discuss their problems or issues then talk about possible solutions.

Attend networking events sponsored by large contracting firms

When you’re invited to attend an event sponsored by a contractor for whom you’ve worked GO! It is a great opportunity to spend time getting to know other subs, suppliers, and vendors. Besides, there is usually food and drink on hand at these events.

Network on the job site

Don’t overlook the construction industry’s unique ecosystem of enmeshed, intertwined, and overlapping network of professional connections. Take time when you’re on the job site to check around for other subs. Who knows when a brief chat on a job site may lead to another job or a relationship which adds value to your construction company.

Maintain contacts

Having good relationships with former employers, coworkers, and subcontractors with whom you’ve worked in the past is a networking tactic worth the time and effort.

And, because most people do genuinely appreciate it when you seek them out with questions you have concerning their area of expertise you’re likely to get a good response when approaching them with your needs. BUT, more important than seeking them to solve your problem you may approach them when you have a connection you think they may be interested in or you’ve come across a solution you know they would appreciate seeing.

Your main networking goal

Your main goal when thinking about networking should be finding ways to help your new contact! Miss this important aspect of networking and the truth is you miss it all.  Don’t become the guy who interrupts conversations, thrusts business cards on everyone, talks incessantly about himself, and annoys the heck out of everyone.

Instead, be the guy who focuses on how he can help those he meets. The simple equation is when someone needs a contractor in your field and you’re the one he thinks of because he has been helped by you, and has seen what you’ve done for others he is most likely going to give you the call.

  1. You’ll have to surround yourself with advisors – who mean business

Getting the right business advisors in place as soon as possible helps any business grow. Getting the right advisors in place for your construction contracting business can make the difference concerning whether you live in the paycheck to paycheck lane, of if you move into the lane where the big dogs are running.

Some of the advisors you’ll need to consider are:

  • Attorney
  • Banker
  • Accounting Advisor
  • Information Technologist
  • Insurance Agent
  • Marketing Guru
  • Tax Preparer

Surround yourself with good people who offer good solutions to your bad problems.

Surround yourself with good people who are honest and have integrity.

Surround yourself with good people who aren’t afraid to stand up to you and let you know when you’re missing an important part of the picture.

There is more to come

Part 2 coming soon. We’ll present 5 more Qualities Needed for Scaling Your Construction Contracting or Service Business.