Cost-Benefit Analysis

Cost-Benefit Analysis for commercial construction contractors

Cost-Benefit Analysis and numbers

The cost-benefit analysis allows commercial construction subcontractors to compare expected potential revenues to likely potential costs.

In effect, a cost-benefit analysis allows you to minimize risk and proceed only when there is more certainty than uncertainty.

While the essence of decision making in the construction industry often calls for quick reasoning and decisive action, an adept cost-benefit analysis takes time to gather information from trusted sources before a decision is made. Simply put, it is a technique used to bring greater objectivity into the decision-making process.

Keep in mind; this method works best when you consider the possibility of unforeseen events or circumstances.

Prioritizing through analysis

Whether the question concerns projects, new hires, or acquisitions, using the principals involved in the cost-benefit analysis also allows you to prioritize through added clarity.

Using a cost-benefit analysis helps make the implications and impact of potential decisions, something that can be visualized.

For example, you determine you need a new piece of construction equipment. Your choices are:

  • Purchase the big, shiny, new one
  • Buy the used, well maintained one
  • Lease or rent one

The purchase or rental price of the equipment is not the only cost to consider. For example, expected maintenance and upkeep costs, downtime, as well as potential resale value, need to be examined in the process.

Then throw this bit of difficult information into the mix – would your long-term equipment operator prefer something with all the new bells and whistles, or would he prefer equipment more in line with what he is used to using?

Or, if you don’t already have someone in your employ who operates equipment, will finding that new employee be easier because of the equipment offered?

Cost-Benefit Analysis and people

It is important to note that cost-benefit analysis may include intangible benefits and costs or effects. For instance, many decisions have the potential of affecting employee morale or customer satisfaction.

Is it worth it?

The principles concerning this process have been true since humans began making choices. In its purest form, the question being asked is, “Is it worth it?”

Using the data at your disposal and common sense concerning those parts which are more difficult to quantify (for instance, customer satisfaction) allows you to get to the bottom line and determine the values involved.

 

We desire to familiarize you with business concepts, which will make it easier for you to be a better commercial construction subcontractor through our blog posts. Some are new ways of looking at things, and others are refreshers. 

The Profit Constructors Provide Contract Document Management and Advisory Board Level counsel for small to medium commercial construction subcontractors.

So you can Run With the Big Dogs! Call us 866-629-7735

Did You Hear the One About

Coronavirus things to laugh about.

There I was, scrolling through a personal social media account when I saw what I was certain was just one more post telling me how to live my life during the Coronavirus pandemic.

Who needs another set of Coronavirus guidelines? Not me! And, probably not you.

But that word, “maybe” and that question mark in that first line made me pause.

I read.

So should you. It is time for a bit of mirth.

FOLLOW ALL OF THESE, maybe?

Here are the official Coronavirus guidelines:

  1. Basically, you can’t leave the house for any reason, but if you have to, then you can.

 

  1. Masks are useless, but maybe you have to wear one, it can save you, it is useless, but maybe it is mandatory as well.

 

 

  1. Stores are closed, except those that are open.

 

  1. You should not go to hospitals unless you have to go there. Same applies to doctors, you should only go there in case of emergency, provided you are not too sick.

 

 

  1. This virus is deadly but still not too scary, except that sometimes it actually leads to a global disaster.

 

  1. Gloves won’t help, but they can still help.

 

 

  1. Everyone needs to stay HOME, but it’s important to GO OUT.

 

  1. There is no shortage of groceries in the supermarket, but there are many things missing when you go there in the evening, but not in the morning. Sometimes.

 

 

  1. The virus has no effect on children except those it affects.

 

  1. Animals are not affected, but there is still a cat that tested positive in Belgium in February when no one had been tested, plus a few tigers here and there…

 

 

  1. You will have many symptoms when you are sick, but you can also get sick without symptoms, have symptoms without being sick, or be contagious without having symptoms. Oh, my..

 

  1. In order not to get sick, you have to eat well and exercise, but eat whatever you have on hand and it’s better not to go out, well, but no…

 

 

  1. It’s better to get some fresh air, but you get looked at very wrong when you get some fresh air, and most importantly, you don’t go to parks or walk. But don’t sit down, except that you can do that now if you are old, but not for too long or if you are pregnant (but not too old).

 

  1. You can’t go to retirement homes, but you have to take care of the elderly and bring food and medication.

 

 

  1. If you are sick, you can’t go out, but you can go to the pharmacy.

 

  1. You can get restaurant food delivered to the house, which may have been prepared by people who didn’t wear masks or gloves. But you have to have your groceries decontaminated outside for 3 hours. Pizza too?

 

 

  1. Every disturbing article or disturbing interview starts with “I don’t want to trigger panic, but…”

 

  1. You can’t see your older mother or grandmother, but you can take a taxi and meet an older taxi driver.

 

 

  1. You can walk around with a friend but not with your family if they don’t live under the same roof.

 

  1. You are safe if you maintain the appropriate social distance, but you can’t go out with friends or strangers at the safe social distance.

 

 

  1. The virus remains active on different surfaces for two hours, no, four, no, six, no, we didn’t say hours, maybe days? But it takes a damp environment. Oh no, not necessarily.

 

  1. The virus stays in the air – well no, or yes, maybe, especially in a closed room, in one hour a sick person can infect ten, so if it falls, all our children were already infected at school before it was closed. But remember, if you stay at the recommended social distance, however in certain circumstances you should maintain a greater distance, which, studies show, the virus can travel further, maybe.

 

 

  1. We count the number of deaths but we don’t know how many people are infected as we have only tested so far those who were “almost dead” to find out if that’s what they will die of…

 

  1. We have no treatment, except that there may be one that apparently is not dangerous unless you take too much (which is the case with all medications).

 

 

  1. We should stay locked up until the virus disappears, but it will only disappear if we achieve collective immunity, so when it circulates… but we must no longer be locked up for that?

 

I do not know the original author. But thank you!

How to take this

My wish for you, dear reader, is that you have enjoyed this jaunt into the comedic side of the unrelenting onslaught of information as well as misinformation concerning COVID – 19.

Now, wash your hands (the proper way) and get back to work. 😉

 

We desire to familiarize you with business concepts, which will make it easier for you to be a better commercial construction subcontractor through our blog posts. Some are new ways of looking at things, and others are refreshers. 

The Profit Constructors Provide Accounting Guidance, Contract Document Management, and Advisory Board Level counsel for small to medium commercial construction subcontractors.

So you can Run With the Big Dogs! Call us 866-629-7735

Being Profitable

Being profitable even during COVID - 19

Every Monday morning, The Profit Constructors’ social media posts are routinely filled with something akin to an Irish blessing. They vary slightly week to week, but typically they look like this, “May your coffee be strong, your influence be ever-growing, and your week be profitable.”

It is that last portion of the “blessing” we’re discussing today. That part about being profitable – because it never varies. Those are the same words week after week.

Even during the Coronavirus pandemic, we wish profitability on our clients and social media followers. And we mean it! We’re not just sticking with the old words. We haven’t lost our minds.

Profitability wears many hats

One way most look at profitability can be measured in dollars and cents. You know that making more than you spend is how profits come into existence. But there are other ways to measure profitability.

For example, a genuinely profitable week would include personal growth. A week spent in strategic planning could prove to be very beneficial. Adapting to changing conditions while maintaining core values gives you the opportunity to show your customers, your employees, and the community at large your grit – and that is very profitable.

And of course, helping others without thought of gain gives an immeasurable profit.

Following is a six-point list of ways you can work toward profitable endeavors during and after the mayhem surrounding COVID – 19.

Remove “woe is me” thinking

Look around – see the big picture. Yours is not the only construction contracting company affected by the circumstances in which you now find yourself. It isn’t as if you’ve been singled out.

Plus, you may find it useful to look at history. Here is a list of some well-known construction companies that are in existence today that made it through the ten years known as the Great Depression (1929 – 1939) as well as other ups and downs in the economy.

  • Sundt Construction, Inc. founded in 1890
  • Bechtel founded in 1898
  • Fluor Corporation founded in 1912
  • The Turner Corporation founded in 1902
  • Peter Kiewit Sons, Inc. founded in 1884

And, check out this list from Mental Floss about other Great Depression success stories.  

Use time wisely

Whether your pace has increased or slowed, maximizing the use of your time to accomplish much is imperative. (We know different states have taken different stands on whether or not construction workers are essential.) That means, for some, it may be making sure the crews have the correct PPE and are practicing proper safety measures. For others, it may be taking advantage of your time to create better-documented systems. For still others, it may be time to take an online class or to teach one.

You get the picture. Take the time to determine the best use of your time. Now do it!

Forget about safety – be daring!

Wait! Don’t think for a minute I’m talking about on-site safety. Keeping those guys and gals safe has never been more critical.

I’m talking about stepping out of the norm, being daring in ways you may not have thought of in the past. Things like:

  • Set up an appointment with a general contractor you may have formerly thought was out of your league.
  • Pivot – do something differently.
  • Create a new division that will take on the new opportunities afforded when the crisis is over.
  • Buy that piece of equipment you know will be necessary for your construction company’s growth in the future – especially when you find a good deal.

Note: I’m not saying that doing any of the daring things in the above list will make you more profitable. I am saying these are the types of things you should consider.

Write a book

Yes really. Do it. Hire a ghostwriter if you need to but write a book about how you not only survived COVID – 19 but how you flourished during and after the crisis. There is nothing wrong with a secondary income stream. And, even if you never see it in print, at least you will have thought of ways to accomplish it.

Advertise

Get serious about your mailing list. Call your past and present customers. Let them know what you’re doing and how you can help them. Use your social channels to help others. Let everyone (including the general public) know you’re here now and will be in the future.

Work together and help others

There is possibly no better way to create channels of profitability than to help others. Sharing the load, working through a dilemma, and resurging afterward are hallmarks of great business leaders who survive the test of time.

One last thing

May your week be profitable!

 

We desire to familiarize you with business concepts, which will make it easier for you to be a better commercial construction subcontractor through our blog posts. Some are new ways of looking at things, and others are refreshers. http://www.schulteandschulte.com/blog/

The Profit Constructors Provide Advisory Board Level counsel for small to medium commercial construction subcontractors.

So you can Run With the Big Dogs! Call us 866-629-7735

Trust and Risk Mitigation in Construction

Trust and Risk Mitigation in Construction

Editor’s note: Our social calendar (including blog posts) is scheduled weeks (sometimes months) in advance. The following post was written over a month ago and “calendared” at that time. In other words, we did not plan this post to coincide with the Coronavirus scare and reaction. But it has proven to be well-timed.

Trust is about taking risks

I learned of some folks who took in a young foster care child who had been abused by his parents. He was unwilling to trust. He couldn’t trust anyone or anything in the world he inhabited. His mistrust of life was so deep-seated it even included simple addition. No matter how many times his care family showed him that two apples plus two apples always equaled four apples, his response was, “What if it doesn’t equal four the next time I try it?”

This story broke my heart when I first heard it, and thinking of it now still saddens me.

Trust is a basic tenant on which we all make it through each day. From the floors we stand on, to the chairs we sit in, to the mugs we pour our hot drinks in, we trust they will continue to do their jobs. Yet, there are those times they don’t.

For example, you trust that when the traffic light is green one way, it is red the other. Further, you trust that when the light is red for the cross-traffic, the drivers in that lane will stop. And this sometimes leads to trusting that the ambulance drivers will take you to the nearest (or best) medical facility.

Every day, we get up, and without thinking about it, we trust. But sometimes we realize we must verify before we continue to trust.

Verification is about risk mitigation

From the products you purchase to the services you take advantage of, to the people you hire, there are ways to verify if you’re likely to receive that which you desire. A prudent verification process is essential.

It can be as simple as looking for the number of stars other users have given a retail item or as difficult as checking a doctor’s background and credentials.

In the end, verification allows you to eliminate, reduce, or control the impact of known risks.

Because our practice consists of management accounting, we advise commercial construction subcontractors to protect themselves from data fiascos through the process of risk mitigation.

Risk mitigation through contingency planning

There are multiple ways to lose data, such as fire, storms, cyber-attacks, employee theft, and beyond.

The key to developing a good plan is to focus on possible losses rather than events.

 

Think in terms of which data takes priority. What would cause the most pain if lost? With this understanding in mind, here are a few items for you to consider while developing your data contingency plan.

 

  • Rank which data are most important
  • Review data back-up and storage procedures
  • Find back-up service providers (you may find this article helpful)
  • Develop a back-up procedures manual
  • Secure outside support for payroll or other financial issues

 

Remember to include client and employee management strategies to be used during a crisis when developing your back-up procedures manual.

Risk mitigation through back-up

The goal is to establish data back-up systems to protect critical documents.

Remember when someone pointed out you were comparing apples to oranges rather than apples to apples? Yep, that sometimes happens. And the simple solution is to remove the oranges as you make your decision based only on apples. If only it were that easy when trying to determine which method or service to use for backing up your data.

It turns out that deciding between your back-up options is more along the line of comparing tacos to tacos. Do you prefer street tacos? How about deep-fried tacos or fast food tacos? Do you want to sit and enjoy handcrafted tacos?

The plethora of options can tend to get in the way until you determine the specific needs of your construction company’s data back-up and recovery needs. Which tastes better to you? How much time do you have available? Does location matter? Does the price make a difference?

Further, back-up is not the only piece of the equation. Fast recovery of all that backed up data is important. The point is to quickly put everyone back in touch with the information that’s needed.

Risk mitigation through insurance

You already insure your building, equipment, vehicles, life, and health. It only makes sense that you use insurance for the data you have stored in the cloud. In an article posted on The Balance Small Business, it is stated, “Cyber liability policies protect your business from claims and expenses resulting from a data breach.” The article, What Does a Cyber Liability Policy Cover? explains various components and aspects you need to look for and consider when purchasing this type of insurance.

You can check to see if your present provider offers cyber liability protection, or you can purchase this insurance as a stand-alone product.

Risk mitigation through checks and balances

Finally, as management accounting specialists, we advise contractors to mitigate risk with the simple process of checks and balances. Following is a list of checks and balances you may wish to consider for your construction company.

  • Use a system of double-signature requirements for checks, invoices, and payables.
  • Make use of the services of an accounting firm and the different services of a tax preparer.
  • Provide multi-department authorization for final figures.
  • Separate handling responsibilities from record-keeping functions and purchasing responsibilities from payables functions.
  • Before payroll preparation, require supervisors to approve employees’ timesheets. (Or automate time tracking for accurate timesheets using an app such as ClockShark)

A couple of other ways you can mitigate internal risks are:

  • Require accounting department employees to take vacations.
  • Make use of independent audits.

In conclusion

If you define risk as being the probability of an event attended by the possible consequences, then risk mitigation is the practice of using various tools to manage the risks.

Keep in mind; risk management is not a one-off exercise. Continued monitoring ensures that risks have been correctly identified and assessed and that appropriate controls are in place.

Editor’s note 2:  We are working hard to see to it that our clients weather the storm. Definition of “weather the storm” from Merriam Webster — to deal with a difficult situation without being harmed or damaged too much.

We desire to familiarize you with business concepts, which will make it easier for you to be a better commercial construction subcontractor through our blog posts. Some are new ways of looking at things, and others are refreshers. 

Schulte and Schulte Provides Accounting, Contract Document Management, and Advisory Board Level counsel for small to medium commercial construction subcontractors.

So you can Run With the Big Dogs! Call us 866-629-7735

Weathering Financial Storms in Your Construction Business

Preparing for financial storms in your construction business

Financial storms in varying sizes

Financial storms can be minor or they can be devastating. Think of  the way dust devils and tornados create different levels of damage. However, even a dust devil can grab and keep your attention when you’re in the heart of it.

Financial storms are real

Joe, Tonya, and I were having a chat. Consequently, this post was born. I mentioned  I had come across another wayward piece of information. In short, the owner of an accounting service declared he could make his clients audit proof. 

It would have been laughable, except . . .we weren’t laughing. We wondered how many people might think becoming audit proof is a possibility. To clarify, it is not.

In other words, it ain’t gonna happen, Baby.

When a tornado hits your town or business, there is likely to be damage.  That is why the wise folks who live in Tornado Alley have built storm shelters.

Consequently, they are tornado prepared.

Likewise, when the IRS comes your way, the best safeguard is to be audit prepared.

Financial storms to prepare for

However, the IRS isn’t the only possible storm on the horizon. Commercial construction subcontractors need to be prepared for other inevitable financial storms. Because, there is every likelihood one or more storms are just around the corner from your construction business it is wise to be prepared. Be on the lookout for these possible financial storms.

  • A downturn in the economy
  • Job shutdown due to weather (yeah, the real weather)
  • Natural disasters
  • Owner or general contractor bankruptcy
  • Pre-bid reviews by general contractors
  • Loaning institution reviews
  • Bonding and insurance requirements
  • Equipment failure

Some of the above items are more akin to dust devils which cause you to duck and protect your eyes.  However, others are more like tornados, and being in a safe place is called for.

3 financial storm preparedness measures

Controlled operational systems

You can set yourself apart as a savvy contractor by getting all your operational systems documented and in place.  You become a savvy contractor ready to make the best of the good times. Furthermore, you’re known as the wise contractor ready to hunker down in the stormy times.

Remember all those little signs posted on the wall which direct you to the nearest exit or safe place where you can take shelter? That is to say, documented systems tell you which path to take.

Construction contractors with a well-designed organizational structure are better prepared and more likely to complete work on schedule. Don’t think the GCs in your area won’t notice.

Financial documentation

My cliché bell is ringing. Yet, having “all your ducks in a row” concerning financial documents is imperative in both good weather and bad. They’re in place to serve you. Having your financial reports and documents ready and up to date means you can be better prepared for the future.

For instance, it is likely the general contractor considering your bid will want to assess:

  • income statement
  • balance sheet
  • statement of cash flow
  • backlog levels in relation to working capital
  • available bank funds or financing options
  • lien history
  • past credit problems

Having all your financial documentation ready and accessible gives you peace of mind for day to day operations. More importantly, those documents act as a buffer when a financial storm hits.

Dedicated save/spend accounts

A good start is to have a savings account for your commercial construction contracting business. However, there is more to it than having a savings slush fund.

Dedicated save/spend accounts put you ahead of the game. This method is similar to Dave Ramsey’s personal financial recommendations concerning envelopes. Using this system helps keep you from making spending mistakes. You know how much is available in each account.

More importantly, you know what it is for. As a result, you don’t buy equipment or perform tenant improvements with your personal tax liability funds.

Some categories which you should consider are:

  • Profit*
  • Owner’s Personal Tax Liability
  • Equipment (and/or Vehicle) Repair, Maintenance, Replacement
  • Customer Satisfaction Program
  • Real Estate or Tenant Improvements

For example, take a look at the equipment account.  You know that big shiny piece of equipment will need to be repaired, replaced, or removed at some point in the future. Setting aside a percentage of real income (real income = revenue – cost of doing business) puts the equipment-storm at bay.

* Your Profit account should be built up and not touched until it contains at least 6 months of operating expenses just in case. A fund of 12 months of those expenses is even better.

Closing thoughts

In conclusion, being audit prepared makes sense. What makes no sense at all is thinking you’re audit proof.

Being prepared to weather financial storms allows you to walk in confidence as well as gain peace of mind.

 

It is our desire this article (among our growing library of construction-centric informational articles) is helpful in assisting commercial construction contractors build better building businesses. 

Providing Accounting, Contract Document Management, and Advisory Board Level counsel for small to medium commercial construction subcontractors.

We are dedicated to serving you rather than merely performing obligatory functions.

So you can Run With the Big Dogs. Call us! 866-629-7735

Be the Best Bidder

Best Bidder practices for construction subcontractors

Best Bidder not lowest bidder

You know there are those who only choose the lowest bidder. No matter how detrimental that practice often is. It happens. This story from ENR tells the tale well.

And, here is another low bid fire station disaster.

If you wish to remove “lowest” from the criteria general contractors might use when considering your bid here are a few things for you to consider.  Because price shouldn’t be the only determining factor in a winning bid.

The Best Bidder will bring

 

  • Outstanding trade expertise.

 

  • Proof of required licenses and insurance.

 

  • Confirmation of past performance with comparable projects.

 

  • Excellent safety records.

 

  • Good equipment.

 

  • Demonstration of well-tended financials (including cash flow capabilities and good qualifications for meeting your vendors’ payment terms.)

 

Soft qualities of Best Bidders

While the following qualities are harder to quantify, they often fit in the make-it or break-it category for GCs. General contractors looking for the best bidder rather than the lowest bidder will watch for:

  • Responsiveness – responding to all forms of communication in a timely manner.

 

  • An excellent attitude – includes understanding how to respond to problems with creativity and a can-do attitude.

 

  • A dedication to teamwork – within your own company, with other trades, and with the GCs representatives, demonstrating your desire to create a mutually beneficial partnership.

 

  • Cleanliness – keeping the site as clean as possible at all times.

 

  • A reputation for integrity – honesty and sincerity, including owning up to your own or your team’s mistakes.

 

And, it is in these soft qualities where you have the most opportunity to promote your value as opposed to focusing on price.

Think about it — when your bid is close to other bids, often your reputation is all it takes to assure you get more than a passing glance.

Who you gonna call?

It is just as important to choose a general contractor worth submitting a bid to as it is to be a subcontractor worthy of consideration.

Here are questions vital to your pre-bid decision.

  • How long has the general contractor been in business?

 

  • How many subcontractors have they worked with? (Contacting past subs may give you an idea of how easy or difficult it is to work with this GC.)

 

  • Do they have procedures for handling conflicts?

 

  • How many levels of management do they have in place?

 

  • Who will be your point of contact?

 

  • What paperwork will be required? And how frequently?

 

  • When will the job begin?

 

  • What is the estimated time of completion?

 

  • What is the scope of the work required?

 

Best Bidder practices

Putting your best foot forward before the bid is called is only the first step. Take every opportunity to let GCs know why your services are better.

And finally, be sure to manage your bid processes well. Determine to focus on bidding projects that will result in profitable returns and repeat business.

 

It is our desire this article (among our growing library of construction-centric informational articles) is helpful in assisting commercial construction contractors build better building businesses. 

Providing Accounting and Advisory Board Level counsel for small to medium commercial construction subcontractors.

So you can Run With the Big Dogs. 866-629-7735

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.

Grow an Established Construction Business – Part 2

Construction management of project risk and adopting new technology

Construction business growth

Construction, at its very heart, is exhilarating. Being part of an industry that manufactures the clients’ desired product on site is challenging, stimulating, and fulfilling.

Growing a construction business is hard work and requires more than wishful thinking or hoping things will fall in place. In part one of this three-part series we looked at one area, “dealing with changing regulations” which contractors must heed in order to succeed. If you haven’t read it yet, take a moment and jump over to see where this post originates.

In this second part we’ll be look at “managing project risk” and “dealing with new technology.”

Manage construction project risk

Many subcontractors find themselves dealing with insufficient management of project risk. This article from ConstructConnect, titled Identifying and Managing Construction Project Risks deals with identifying, managing, avoiding, mitigating, and accepting risks. It is well worth the time it takes to read.

There is more to scrutinize. Sometimes, the things which we don’t think of as a risk (such as paying your employees for each full day of work) can be rather a risky business after all. One of our fellow accountants shared a story about how one of her clients was very hesitant to purchase a recommended piece of software. He eventually did follow her recommendation.

The software she suggested is used for employee time tracking and scheduling. Within the first month of use, her client discovered (among other things) that he had one long-term, trusted employee who was checking into the jobsite in the morning, getting the crew set up, then leaving the site and spending most, if not all of the day on side jobs. Yeah, sometimes what you find out, stinks!

Other risks to consider

  • Seasonal slowness
  • Injuries to third parties
  • Faulty work by the crew
  • Missed deadlines
  • Employees providing less than stellar customer service
  • Not adopting tech soon enough to keep up with the competition

Using your own (hard won) experience and information from the above linked article, you can begin putting together your own list of possible risks then begin defining ways you can manage, avoid, mitigate, or accept them.

Plan for and adopt new technology

The list is long concerning the technology available to today’s construction subcontractor. So long, it can be dizzying. In one of our recent articles, Technology Isn’t the Focus, Business Is, we dealt with the “why” of choosing the right tech for your subcontracting business.  In the end, just as with all your other business choices, the reason for choosing certain technological solutions is to better serve your clients.

Yet, there is more

Having the best tech in the world won’t mean anything if you’re unable to get buy-in from your employees and subs. This article from Forbes offers excellent information concerning how to get employees to really use new technology.

For your employees, understanding why the new technology is an improvement from what they had before is paramount. And, part of that understanding must rest in the portion of the brain that always asks, “what’s in it for me?” Plus, your workers and subs are likely to have a few follow-up questions, like “How does this affect me?” and “How will it change the way I work?”

An example

Say you want to introduce GPS tracking to your crew. Some of the perks you can mention to your employees are:

  • No “he said – she said” with clients. GPS provides employee proof of service.
  • There will be a cut back on paper work giving your team more time to focus on serving the client.
  • They will be paid for all hours actually worked.

Your job is laying out “a vision for the future” and providing an explanation for how the new technology will improve the business, thereby improving the lives of your people.

Improve the lives of your employees and subs

Technologies that require multi-day training programs and hefty user manuals are more likely to cause employee rebellion and perhaps even stalled adoption. You do well to remember that while functionality is critical user-friendliness is hyper-critical.

Customize training for individual users. For example, some may want a day long, in-house demonstration, while others would prefer online training to be done at their own pace. It is best to get influencers from your company onboard as quickly as possible. They will help others understand the how of using the new tech as well as the why for the sake of the company as well as the individuals involved.

There’s no time to waste

It is no longer a matter of waiting around to see if the new tech is “worth it.” The tech available today allows you to provide better organized projects, reduce onsite accidents, and stay competitive.

While you may think there is some risk involved in adding technology to your company, it is time to realize, there is even greater risk if you don’t.

Look for this next

Next week, we’ll take a look at preparing for financial needs in advance and creating documented, sustaining processes.

We’ve created a waiting list for those who are prepared to work with us in growing their construction contracting business. To get in on “the good stuff” call 480-442-4032 or get in touch here.

Build standardized processes – Prepare now for the future

This is the fifth in a five-part series concerning Steps to Scaling Your Construction Contracting Business. You can see the introduction to the series (with links to each article) by clicking here.

In his article for Forbes magazine, Eric T. Wagner, shares some insight gleaned from Kelsey Ramsden who is the president of Belvedere Place Contracting Ltd.  In 2012 and in 2013 Kelsey Ramsden, was awarded Canada’s #1 Top Woman Entrepreneur by Profit Magazine – a very prestigious award for a young, entrepreneurial, woman in the Construction Industry.

While Wagner’s entire article is worth reading, today we’ll focus on the fifth of eight tips on successful entrepreneurship shared by Ramsden — Establish Systems To Mesh With Your Goals.Smart entrepreneurs not only set goals — they build systems to support those goals. Ramsden admitted she started out doing it ‘totally wrong.’ Most of us determine what we want to accomplish, establish the time frame to get it done, and then work backwards to spread out the workload. But what’s missing is our system (a defined set of time set aside with the necessary tools to work toward the goal). It’s like wanting to lose 30 pounds (goal) by summer (time frame) and signing up for the gym membership (a tool); but not scheduling the one-hour daily appointment (your system) to do the workouts.

This is how (insert your company name here) gets it done

In its most basic form, establishing systems, building standardized processes means you’re saying, “This is how (insert your company name here) gets it done,” to your crew, to your staff, to your customers, and to your potential customers.

Think about it, flexibility can be the enemy of growth. Using an extreme example, suppose you hired a new guy to help in your painting business and he refused to use the spraying equipment which makes your painting jobs run more effectively and efficiently. What if he told you he is only willing to paint with a brush? If he was truly handy with a brush he could probably get the job done, but at what cost?

Standardized and repeatable

If you’re going to scale, you need to implement standardized and repeatable processes, with proper delegation. Yet, doing so is awkward, time consuming . . . and oh so worth it. We, at Schulte and Schulte, LLC are blessed to have an app which helps us build our growing library of standardized and repeatable systems for our accounting business. We use Aero which is a process building tool as well as a repository for each of the written systems we’ve created, are in the process of creating, and will create in the future.

But what about you, the general contractor, subcontractor, service and supply contractor, install specialist, or construction related entrepreneur?

There is an app for you too!

Knowify is what you need. It is a SaaS program for small to medium contractors to use to systemize their over-all processes.

Want to know more? Our Knowify Certified Advisors will work with you to garner the best benefits associated with using Knowify to aid in scaling your construction business through the use of standardized processes.

Your call to action:

Give us a call. We will help get you set up for a phone appointment, so you can get in the Know about Knowify. Toll Free: 866-629-7735

Job Close Out – Map a superior customer journey

This is the second in a three-part series about using a Job Close Out system to enhance your construction contracting business. If you missed the first part, you can go here. You’ll find the third part here.

Start at the finish line

Rather than getting close to the end of your project and finding you have an Easter egg hunt for what’s incomplete or unacceptable (including the dreaded punch list) working from the beginning of the project through the completion with Job Close Out in mind makes better sense for both you and your customer.

Speaking of punch lists: There has been a lot of talk lately about striving for a zero item punch list. When I first heard of the idea, my reaction was “that’s impossible.” Then I began researching the ideas and thoughts associated with the concept and discovered it is not only possible, but actually the industry as a whole is moving toward that reality rather rapidly.

So, whether your particular segment of the construction industry typically relies on a punch list or not, there is still that moment in time when you reach the finish line at each of your jobs and you close out with your customer.

Who benefits from a well-planned, systematic Job Close Out process?

Your customer

Your team

Your bottom line

Whether or not your particular customer has ever heard of the language found in the American Institute of Architects’ AIA A201-2007 document is beside the point.

“Substantial Completion is the stage in the progress of the Work when the Work or designated portion thereof is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Work for its intended use (2007).”

Think like your customer

The fact that your customer can “move in” isn’t enough. No matter how much they’ve enjoyed your company for the past few hours, months or years they wish to fully occupy and fully use whatever you’ve built, installed, or repaired for them.

No matter where you are in the contractor, subcontractor chain you still answer to your particular “customer.” Your ability to scale your contracting business is greatly enhanced when your reputation is for closing out your job without repeat call backs, for monitoring even the “little things,” and for finishing your project with no loose ends.

A well designed Job Close Out system will keep your team from missing vital yet routine tasks which can sometimes slip through the cracks because you or someone else on the team assumes they’ve already been carried out. Another important benefit of using a good system is that by assigning close out tasks to a specific person and having the tasks verified by different team members sets up a communication path which often leads to more information, therefore better close out.

Your Job Close Out system is an internal checklist which in reality is a customer service tool.

Jeff Bezos, CEO of Amazon, makes an excellent point when he says, “We’re not competitor-obsessed, we’re customer-obsessed. We start with what the customer needs and we work backwards.” Making your Job Close Out system customer-centric is a wise investment of your time and is important to scaling your construction contracting business.

The next article in this series will discuss how to create a useful Job Close Out system which will serve you, your customers, and the members of your team.