3 Construction Business Lessons from a 3-year-old

Business Lessons concerning 3-year-olds and french fries

Business lessons from unexpected sources

The business lessons a 3-year-old passes on are pretty cool, partly because they’re so memorable.

I recently teased my cousin’s son about an incident which happened when he was only 3 years old. (He is now the daddy of a 6-year-old.) You see, his mom and I had agreed to meet at a restaurant for a couple hours of let’s-get-caught-up-time on a day I was passing through their town on a business trip.

While his mom and I slowly sipped our soft drinks, he (it seemed to us) took his straw in mouth and sucked down his entire drink in one fell swoop. Then . . .

The 3-year-old:

  • knew we were in a restaurant
  • made it abundantly clear he was likely to die of starvation if food was not ordered soon
  • wiggled and waggled his way to food-ordering-compliance from his mom

Because we hadn’t planned to have a meal, yet the 3-year-old was near death from starvation, his mom placed a French fry order for him.

We were all a bit surprised when his order came. A dinner plate piled high with French fries was placed in front of said wiggle-wort.

Business lesson #1 – Let it cool down

Our busy boy reached immediately for the fries in front of him, stuck one in his mouth and began crying.

Sometimes you must let things cool to the appropriate temperature before you can touch them. Fresh from their hot oil bath those fries were much too hot for tiny, tender fingers and mouth.

Make sure the temperature is correct – be certain you have a signed contract before beginning.

Those with whom you need to have a written contract include:

  • General Contractors
  • Your own subcontractors
  • Business partners
  • Service providers

Starting work on a verbal agreement or letter of intent means the appropriate temperature has not yet been reached. Fries which are too hot will bring tears.

Business lesson #2 – Don’t fixate on one French fry

During the course of our chat, my cousin reached over to the large plate of fries, scooped up one, and stuck it in her mouth.

Then, all hell broke loose from the 3-year-old.

His mom tried to sooth him and reminded him he had a large plate of fries still available for his meal. “Besides,” she said, “I only ate one.”

His immediate retort, “That is THE one I wanted!”

While it is easy to laugh at the exploits of a disgruntled 3-year-old, it is often the case, we as full-grown functioning adults, are much too worried about someone taking one of our fries, or one of many jobs available.

Save yourself the headache of worrying about the loss of one fry or one job. Taking the time to throw a fit about THE job you wanted (and someone else took) only means that the large plate of fries in front of you is cooling to the point it may soon not be palatable at all.

Business Lesson #3 – Don’t forget the ketchup

My cousin knew her little wiggle-wort was going to be crying out for the topper, the real reason for eating fries, the ketchup. So, she dutifully applied the condiment in order to forgo the impending upset.

BTW, just for fun – did you know you can learn what kind of person you are according to how you put ketchup on fries. Check it out. You’ll have fun.

A French fry is just a French fry – until you add the ketchup. Then it becomes real food worth conveying to your mouth. (Or at least that’s the way I see it. 😉)

So, what is the ketchup you can bring to the table? Let’s consider it is likely there are other specialty trades providers in your area who offer the same expertise you do. So, if they’re all bringing the same fries you are . . . time to add the ketchup.

Most of your competitors will likely be able to provide about the same skill set, manpower, equipment, and so on. You can set yourself apart by the simple act of being proactive before, during, and after the job is complete.

Be on top of your contracts

Take responsibility for knowing all aspects of upcoming projects by:

  • visiting job sites early
  • staying in touch with project superintendents
  • being certain your materials are approved and available
  • asking the GC what it will take to make the job run perfectly for them

 

During the contract time, stay on top of the job by doing the expected work and:

  • keeping the site clean and organized
  • providing for your crews’ needs including temporary facilities if called for
  • repairing damage or mistakes without “being caught”
  • being sure safety is a true priority

 

After the job is complete enhance further opportunities by:

  • staying in touch with the GC
  • sharing leads
  • asking how you can improve

Recap

Let fresh fries cool down, don’t fixate on one French fry, and by all means don’t forget the ketchup.

 

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.

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

Indirect Costs in Construction Contracting

Indirect Costs are important to the health of your construction company

Indirect Costs can cause hair loss

You know what I mean; trying to figure out what amount goes into which column can be a hair pulling adventure. And, making matters worse, indirect costs can mount in a hurry.

At first glance, it would seem differentiating a direct cost from an indirect cost would be somewhat intuitive. And, in one respect it is. Because, you can name the labor cost and the materials cost per job and you’ve got the foundation for your direct cost column.

Therefore, the rest should be easy, right? Anything on which money is spent and which isn’t a direct cost is quite obviously an indirect cost. Well . . . not so fast.

Indirect Costs accounting methods

There is more than one school of thought concerning how to handle job costing for indirect costs. They vary from “don’t do it” to “create several accounts depending on X factor,” and a few between. Of course, if you’re a commercial subcontractor and your bonding agent wants to see indirect costs on your job reports, and you say, “Oh we don’t mess with indirect costs,” you’re in for a rude awakening.

[In case you’re wondering which method we at Schulte and Schulte use, the answer is, “Which ever is the most appropriate for each individual client.” Yeah, we don’t believe in the one-size-fits-all method of dealing with our clients’ accounting needs.]

How it comes together

Dealing with indirect costs means determining things like fringe, general and administrative, and overhead then putting the numbers to use. It means you use appropriate tools strategically. And, it frequently means making your best estimate.

Indirect Costs can be a guessing game

So, if it is a guessing game – why bother? Right?

It is tempting to think the two words “accurate and estimates” could be counted as an oxymoron. Yet this article, Why Guessing Is Undervalued, suggests guessing is a huge part of our daily lives. And thoughtful guessing (estimating) is a skill worth developing.

Plus, think about this; guesstimates are the golden thread running through much of the construction contracting tapestry. From the beginning of the process, construction contractors take a unique set of variables, consider scope and feasibility, develop an “accurate estimate,” and call it a bid.

Taking into account we understand that close, just about, a little more (or less) than, and between are important and valuable words, it is also important to be able to determine a number which will satisfy several entities with whom you interact.

I’ve already mentioned that bonding agents want to see the numbers. So does your income tax preparer, the lending agency, the insurance provider, and the general contractors in your sphere.

Even more importantly, proper accounting for indirect costs allows you to receive appropriate tax deductions as well as make better business decisions.

How we can help

I’m just going to have to say it – the Schulte and Schulte team goal of helping our clients Run With the Big Dogs has a subheading titled “help them have peace of mind.”

Are you a construction contractor who needs help getting your indirect costs dilemma straightened out? Give us a call!

 

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.

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

Attending Scaling New Heights

Scaling New Heights in accounting to better serve clients in construction

We’re here in Salt Lake City, Utah at the Scaling New Heights convention produced by Woodard. We thought we would let you in on what we’ve been up to while we’re here. Keep in mind, everything we do (including convention attendance) hinges on our mission of helping our clients (small to medium commercial construction contractors) Run With the Big Dogs. And, we must tell you, we believe our experiences here have added to our ability to do so.

Scaling New Heights through attendance

From the Woodard website: “Each year, over one thousand of the world’s leading small business advisors and over 100 of the world’s leading software developers gather to gain knowledge, cross-refer services, develop practice skills…and more!”

From Tonya and Yvonne: Yes! Let’s roll!

We arrived eager to expand our knowledge and expertise, one keynote, one breakout, and one handshake at a time.

We were not disappointed!

In addition to that, we came with a set of objectives. Following our own advice  we had these goals in mind before we got here.

  • Expand our industry knowledge in general ✅
  • Find solutions for two client related problems
  • Look for new or updated app and SaaS vendors ✅
  • Network with peers ✅
  • Position Tonya as an expert* ✅

Learning from our peers, swapping big (and little) ideas, checking out the fun tech, and finding solutions for real life, real time problems our construction contractor clients encounter is exhilarating!

*Tonya was among the 4 people who served on a panel discussing best ways to serve construction contracting clients.

Scaling New Heights for the fun of it!

From joining the Knowify gang at Eva for tapas, to Jennifer Dymond showing us how the study of Improv  can make us better at serving our clients, we’ve been having fun! For Tonya, connecting with returning friends and for both of us making new friends has been the mortar to the building blocks we encounter in the breakout sessions.

Sharing tips, insights, and information one trowel blade at a time, is allowing us to share and compare with top notch accounting and business advisors from all across Canada and the US.

Scaling New Heights for the plums

It is possible we will still find more plums as this day and the next roll out. As of now, we’ve discovered 2 plums which have caught our attention and have already been acted upon in one way or another.

Plum 1. “We need to build out a very good website intake form to be available for potential clients to prior to initial consultation.”

Initial action step: Speak with website designer concerning placement. ✅

Secondary action step: Send info to calendar to begin design process. ✅

Plum 2. Need to take definitive action on the move towards AI in the accounting sector.

Initial action step: Begin brainstorm discussion with notes concerning possibilities. ✅

Secondary action step: Set up firm wide meeting to discuss iterations in business model. ✅

We’re excited to move on to the next sessions, meetings, and encounters as we finish up the week here at Scaling New Heights. And we’re excited about the upcoming possibilities.

 

Hope you’ve enjoyed this small peek into the happenings at the Schulte and Schulte firm.

Providing 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 

Brand Personality in Construction

Brand Personality including logos and such

Brand Personality is made up of many different (and some moving) parts.

How many times have you heard a product or service being noted as the “Rolls Royce” of their industry? Good thing the folks at Rolls have worked so hard to provide both an excellent product and an exemplary Brand Personality. Otherwise, those claims wouldn’t mean as much.

Yet, there is much more to a Brand Personality than hood ornaments or company logos.  Let’s face it, it isn’t as if you can choose a logo and decide you’ve done all you can to brand your construction company. Throw in some company labeled shirts and hardhats and you’re making inroads in the brand personality game. Yet, there is so much more to it.

Here is a short list of some brand personality building tactics:

  • Putting great wraps on your vehicles
  • Setting up your audacious website
  • Delving into the latest (and greatest) social media channels
  • Being a guest on some well-chosen podcasts
  • Volunteering within your trade association’s network
  • Donating to support children’s sports or other activities
  • Attending general contractors’ meet and greet or appreciation events
  • Participating in needs-based construction events such as Habitat for Humanity

Some more subtle brand personality building tactics:

As you can see, developing a brand personality in your commercial construction subcontracting business takes time, is ongoing, and is likely to evolve as you grow. There are no magic formulas, no silver bullets, and no easy ways out when it comes to building brand personality.

Yet, looking at the whole picture gives you more ideas to try and inspiration to keep working on.

Time out for transparency

While doing research concerning how to be better at delivering the Schulte and Schulte message, I came across this fun little article at Career Addict. It is titled, 12 Examples of Brand Personality to Inspire You.  It really is inspiring.

And, while reading, I kept thinking of various companies I know of which fit specific personalities.

Further transparency – What follows are 3 examples of Brand Personality as seen on Instagram. None of these examples are clients of ours. As a matter of fact, none of them fits the bull’s eye of our target clients. Because after all, we specialize in helping small to medium commercial construction subcontractors Run With the Big Dogs.

And, one of the firms highlighted (we believe) is primarily a service company rather than a construction contractor – 3 Mountains Plumbing. The other two – AFT Construction and Spain Commercial Inc. – are general contractors who do business with the folks we DO consider our target market (you know – those subcontractors I mentioned.)

Brand Personality on Instagram

First example

3 Mountains Plumbing found on Instagram at 3mountains.plumbing

From the Career Addict article, we see them as an Entertainer Brand:

“Entertainer brands champion values such as spontaneity, charm and humour. These brands seem to enjoy helping their customers discover the fun side of life. Examples of entertainer brands include Dr Pepper and M&M’s.”

The folks at 3 Mountain Plumbing take a difficult subject (who wants to think about all that goes on in those pipes and fixtures?) and turn it into something to laugh about. Also, their rhythm and consistency make remembering them easy. I must add, they make excellent use of color in branding.

Second example

AFT construction  found on Instagram at aft_construction

From the Career Addict article, we see them as an Emperor Brand:

“Leadership, determination, respect, dominance, influence and wealth are values that are associated with emperor brands. Good examples of emperor brands are American Express, Porsche and Rolex.”

Brad Levitt and his team hire professional photographers to take glamorous photos of their high end, custom projects. And, they leave no doubt concerning who their target market is and what they can offer the folks within that target. There is no room in their marketing calendar for rants or “tool bribery” posts. They aren’t trying to teach fellow contractors how to accomplish building tasks, nor are they passing along building “tips.” I hasten to add; Brad is quite generous with helping other contractors learn the ropes concerning being in the construction business in other online formats.

Third example

Spain Commercial Inc.  found on Instagram at spaincommercialinc 

From the Career Addict article, we see them as a Wizard Brand:

“Wizard brands specialise in taking the ordinary and transforming it into the extraordinary. Wizard brands champion values such as imagination, surprise and curiosity. Good examples of wizard brands are Apple and Pixar.”

Kayleigh is the “marketing department” for Spain Commercial. Unlike AFT where their emphasis is on the finished product, Kayleigh’s emphasis is on the people and the process. She is exemplary at getting folks to see that “ordinary” acts at each stage of the construction process ends in the “extraordinary” at completion. Plus, Kayleigh’s passion for telling the story of Spain Commercial simply rolls off the screen and into your mind. The story unfolds one image at a time making it possible to imagine how this company will service their clients well.

How does your company stack up?

Take another look at the Career Addict article and see if you can find which brand personality type your construction contracting firm fits.

Our perusal of the article made us think Schulte and Schulte fits as a Source Brand.

From the Career Addict article:

“Source brands embrace knowledge and enlightenment. They champion values such as truth, objectivity, education, discipline, clarity and commitment. They are the brands that we look to for information, advice and insights. Examples of source brands include Bloomberg, eMarketer, Forrester and Mckinsey.”

What is your brand personality?

How well are you doing at getting the message across to your present and potential clients? We hope this article has given you food for thought as well as a commitment to presenting an excellent brand personality.

 

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.

 

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

Subcontractors – What’s Your Story?

Subcontractors tell your story to grow your business

Subcontractors – What’s Your Story?

Subcontractors create

The culture you create within the confines of your construction subcontracting business radiates. That culture becomes the story your construction company is known for. What story is your subcontracting business telling?

Are your crews known for showing up on time prepared to give it their all? Or do they have the reputation for being late and leaving the site frequently to retrieve forgotten tools?

Are your people the ones who will go the extra mile to help out the GC? Or are they the ones who fail to clean their own mess because they “don’t want to be taken advantage of?”

Can you be sure your phones answered by people who either know the answers or know how to get them?

Is all the paperwork your general contractor asks for submitted in a timely manner? Or is it only taken care of when someone in the office or the field gets nagged enough to get it done?

Creating a culture which stresses “customer service” allows you to tell a better story.

The first two questions you need to ask are:

  1. How do the GCs in my area perceive my company?
  2. What do I want it to be known for?

Subcontractors develop

The culture you develop in your construction business has the power to attract the right employees. I’ve heard Tonya express it this way many times – your vibe attracts your tribe.

When your employees and subs know you care about them as human beings, not just a tool you use to get a task done they’re more attuned to supporting your efforts. Giving bonuses and raises whenever possible is only part of the picture. Giving praise and supporting their efforts for personal as well as professional growth helps your team see you as someone who cares.

With that being said, let’s move to ways to help your team understand your stance.

Want your team to lie to you? Teach them that lying to the GC is acceptable. Or would you prefer your employees tell the truth about errors and omissions? Be sure to model that behavior.

Do you want your team to steal from you? Show them that cutting corners is the only way to get ahead. Or, does it make more sense to teach them that your expectation is for excellence and “good enough” is never good enough.

Do you prefer your team members show up on time? Then of course, you must be their example. When you call for a meeting, you must show up before the meeting starts, not a few minutes later.

Subcontractors lead

If you don’t already have the skills of a leader you need to develop them. Here is a great graphic which depicts the difference between a boss and a leader. You can check the graphic to see which skills you need to improve or strengthen.

Want your folks to feel all they do is work hard for a paycheck? Neglect to let them know what it is they really do. Want them to get the vision? Show them the vision.

And the way to frame that is often with the end game in mind. Are they laying brick or helping build a medical facility which will save lives? Do your hands think they’re painting walls or do they believe they’re putting the finishing touches on a space which will provide jobs for the community? Are they laying wire or pipe or rebar which will not be seen when the building is complete, yet will bring integrity and ultimately usability to the shopping district?

The next questions you should ask yourself are:

  1. How do my employees feel about their jobs?
  2. What do I want our team members to feel about their jobs?

Subcontractors improve

When it comes to company culture and telling your story there are likely areas in which you can improve. Because, as you know, if you’re not getting better . . .

The purpose of your business (why your company exists) is where your story begins. How do you fit into the big picture in the construction industry? How well do you pass on your vision?

Look at your mission statement, values, and long and short-term goals to get a handle on your culture. The next step is to observe how your employees reflect the statement, values, and goals. Be sure your mission statement isn’t just a bunch of words, rather that it captures the essence of how your team operates. Know what values are important to you. Devise a way to pass on those values to those in your employ. Be sure everyone is on the same page concerning long and short-term goals.

See to it your team has a clarity of purpose. Work to be sure your employees are engaged, not just getting by. Trust your team and do all in your power to let them know they can trust you. Always be learning. See to it you’re providing opportunities for your team to learn and improve. Finally, make sure your company policies align with your company culture.

The final set of questions to ask and act upon are:

  1. What is right about our company culture?
  2. How can it be improved?

Develop an excellent company culture and tell your story so you’re able to:

 

  • Capture General Contractors’ Attention

 

  • Enhance Recruiting and Retention Efforts

 

  • Improve Your Business

 

Control your story both internally and externally.

 

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

Important Construction Terms We Just Made Up

Construction Terms we just made up.

Important Construction Terms We Just Made Up

Important Construction Terms – the story

There was this email I received which mentioned The Dictionary of Obscure Sorrows and provided a few of the entries. They were:

Adronitis: Frustration with how long it takes to get to know someone.

Rubatosis: The unsettling awareness of your own heartbeat.

Jouska: A hypothetical conversation that you compulsively play out in your head.

I was intrigued . . . especially with that last one, because I practice “Jouska.” All. The. Time.

So, I went looking. And, I found the author, speaking on a Ted Talk.

Hum. What else could I find?

With thanks to John Koenig, author of The Dictionary of Obscure Sorrows for giving me the idea of choosing (OK, like him, making up) words. Words which express succinctly today’s commercial construction subcontractor reality.

Really.

Yeah, they’re fake – but they should be real.

Have fun reading these “important construction terms.”

Important Construction Terms – adjectives

 

distalktuousadjective  causing untold long and short-term damage to company operations and employee morale because there is a Lack of Communication

 

cutturlyfuladjective  causing or apt to cause budgetary cuts and bid constraints when met with the Cost of Labor, Materials, and Supplies

 

blameuthargicadjective  of, relating to, or affected with blamergy; unreasonably rash or (conversely) apathetic to the reality of the part integrity plays in completing projects. Sometimes known as the Not-My-Fault Game

 

treventickyadjective  shocked and dismayed by the seemingly endless line of Unreliable Employees and Subcontractors

 

Important Construction Terms – Verbs

 

intenturafulverb  feeling which comes from having all plans and timelines disrupted by weather, or other sources causing multiple Scheduling Problems

 

exasperlatedverb  feeling you have when you turn down yet another opportunity to bid because you are experiencing a Lack of Skilled Workers

 

disbuckulatedverb  to cause feelings of dread and apprehension due to the inability to take advantage of deals or overcome setbacks because of the Lack of Available Cash

 

filetimizedverb  to make as demanding, laborious, and problematic as possible through the insistence of maintaining disorganized (usually hard-copy) paperwork creating Difficulty with Document Management

 

codeshiftrifiedverb  to overwhelm with a set of constantly emerging rules, laws, and restrictions within the construction industry. Also known as Dealing with Ever-Changing Regulations

 

Important Construction Terms – Nouns

 

irriloosesomenoun  the frustration of knowing the impact of frequent changes to the original contract when others seem oblivious to Change Order Overwhelm

 

Have you thought of some words which should be added to this small compilation? Tell us! We want to know.

 

When you stopped in here, you found an Accounting, and Contract Management Firm which provides Advisory Board Level counsel for small to medium commercial construction subcontractors. Doing what it takes to help them Run With the Big Dogs.

You can find out more by getting in touch here or calling 866-629-7735.

Image by kaboompics on Pixabay

Subcontractors in Construction – A view from both sides

Subcontractors can satisfy general contractors by going the extra mile.

Subcontractors in Construction – A view from both sides

Subcontractors are not alone

Listen Subcontractors, more than once I’ve heard construction business owners mention one of the reasons they decided to go into business was because they wanted to be the boss rather than take instruction from the boss. Some have even jested that their elementary report cards often had a notation stating, “does not play well with others.”

Truth is, “playing well with others” is a major part of owning a business in the commercial trades. A business in which one must take care of his portion of the work while striving to make it easier for the general contractor and other trades on the jobsite to take care of their portions.

Subcontractors and General Contractors

The symbiosis which takes place between GCs and subs is rather a sight to behold. Negotiations, contracts, and agreements all come with understandings on both sides of the table. You do this, and I’ll give you that, is what it all boils down to.

Yet, we all know there are times when things go awry. There are times when things go off-kilter and must be put aright before the journey to completion resumes. Following are some areas which can become sticking points.

Subcontractors take another look

Here are some complaints GCs have mentioned when it comes to dealing with subs.

Not getting paperwork signed

“My sub hasn’t given me signed paperwork which is my route to paying for their completed work.”

Make it easy for people to do what you want them to do. Want to get paid in a timely manner? Be sure you’re following all the rules laid out by the GC – including giving them the signed paperwork (also in a timely manner.)

Submittals are incomplete

“It can be any number of items, lien-waivers; payment package; drawings; schedules; diagrams – we need it all in order to complete the project, to satisfy our owners, and to meet legal obligations.”

Subcontractors who submit the appropriate documents show that they’ve read and paid attention to the contract.

Subcontractors avoid these additional mistakes

Bonding bait and switch

“When subs assure us they are in compliance and they are not, we have a major problem.”

Just do the right thing. If you’re only bonded to a certain amount say so. Period.

Going behind our back

“We don’t appreciate it when we find we have subs stepping on our toes with the owner or someone else.”

Having a complaint in which you skip the general contractor and go to the owner is bad business all the way around. Do your best to have all your meetings with the GC in order to make everyone happy. This article explains some of the problems associated with skipping the GC to go to the owner.

Too many scope gaps

“When subs complain there is more work than they thought, we know they missed too many things on the bid. We’re hesitant to work with them again.”

Do your due diligence. Read it all. Look over the plans, carefully and thoughtfully. Train yourself to look for the details if you don’t already have that skill.

What general contractors want       

It is really rather simple. This is what GCs want from their subs.

“We want subcontractors who can deliver on their promises.”

“The subs we want to work with are those who make us look good to our clients as well as our potential clients.”

“They make our job easier rather than adding headaches to the mix.”

“They are clean and pick up after themselves as well as others without thinking in terms of ‘it’s not my department.’”

“We can trust them to do the job without calling them all the time to see that the work gets done.”

“Bottom line, we want subs whose own company goals and values align with ours in providing excellent service and products to our clients.”

How subcontractors can deliver

Finding ways to be “the” sub GCs want on their team isn’t always about being the lowest bidder on any given project. Much of the work is accomplished by having your team show up and be up to the challenges they will face on the jobsite. Going the extra mile and being the team player, listening to what the general contractor wants, and acting in ways which are beneficial to all wins the day.

 

Schulte and Schulte is a virtual firm with clients from all across the United States. We provide the “Corporate Accounting Office” for small to medium commercial construction trades.

It is our aim that this article (among our growing library of construction-centric informational articles) is helpful for those in the construction trades. Want to know more about us? Call Toll Free: 866-629-7735 Or, get in touch here.

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.

It Costs to Live with the Lost Cost Fallacy

Lost Cost Fallacy can slow down the growth of your business

Cost is something we can all understand – or not

There is this interesting mindset we humans get caught up in known as the Lost Cost Fallacy, otherwise known as Honoring a Sunk Cost. David McRaney at You Are Not So Smart goes into detail concerning what is entailed in Lost Cost Fallacy.

What it boils down to is, it’s hard to abandon a person, a product, or a process once you’ve invested time or money into any of them. It is hard to give-up when you’ve spent so much. You don’t want to think that you wasted all that time or effort. Weird thing is, it’s hard to abandon some things even when the investment is minor.

Cost is cost, yet it can be funny

Here’s an example. A while back I went to breakfast with some family members. After eating most of my food, I decided it was time to call it quits. There were mostly just bits and pieces scattered on my almost empty plate. Yet, one of the breakfast party was horrified that I was leaving two intact pieces of bacon. She explained that the meat was the most expensive part of the meal and I was therefore under obligation to eat it.

Even when I explained to her that the cost of my meal didn’t vary depending on what or how much of it I ate (or didn’t eat,) she was insistent that I was making a huge mistake. No thanks, she didn’t want my bacon, she had eaten her fill from her own plate on which she “wisely” left only the toast. 😵

Lost cost fallacy in the construction industry

There are three major categories in construction which present temptation for holding tight to the Lost Cost. They are people, products, and processes.

People

Let’s say you have an out of town division led by a hand you’ve had around for quite a while. Suppose you think there is a possibility he isn’t pulling his rightful share of work. There even seem to be things happening which are not a part of the company culture you’ve worked hard to build and reinforce. Perhaps he tells you there are clients onboard because he brought them on. It could be you let yourself worry over the loss of clients as well as workers if you terminate this fellow.

Besides all that, you’ve spent a great deal of time and money getting this guy into the position he presently holds. Could you be honoring a sunk cost?

Overcome this lost cost fallacy. Think, “Am I sacrificing the opportunity to hire someone better because I am stuck with the sunk cost?”  Are you giving up the possibility of better relationships by sticking with something that is leading nowhere? What is the actual cost of your commitment to a past decision?

Product

You had a great project in the pipeline and at the last minute it fell through. In the meantime, you had ordered product for that “great project” and it doesn’t work on any of your real projects. Or, some excellent salesman convinced you to order a stockpile of the latest and greatest fixtures (or what-have-you) to have on hand for your service clients. And, a year later you still have most of that stock taking up room in your warehouse or yard. You can’t find the things you really want and need because that “stuff” is always in the way.

Time to liquidate the unused product. The cost of keeping it is too great. Think, “If I had the same opportunity to buy this product again (knowing what I know now) would I do it?” If something catastrophic happened and you lost that product would you go out and buy it again? Could it be that the benefits of your choice (it was on sale) decreased over time while the costs (storing it and searching past it) increased? Could it be that you didn’t have all the information when you made the initial decision, but now (with new information) it is clear this product is not serving you in any way? You aren’t saving money, you’re losing money in storage and wasted time searching for what you actually need.

Process

You know and understand that when you put together a process or a system it takes time, money, and effort. Perhaps someone talked you into purchasing and using their system for maintaining the tools and supplies on your service vehicles.

And. It. Doesn’t. Work. It just sort of limps along. No matter how hard you try.

You bought the software, you spent countless hours training your technicians, you spent even more hours on the phone trying to figure out why it wasn’t working.

Does the word, “groan” come to mind? Think, “My goal is to have a great process, not to own a dysfunctional piece of software.” Is it possible abandoning a sunk cost is a sign of good decision making? Are you over-estimating the importance of the sunk cost? Is it possible the lessons you learned while using the dysfunctional process will come into play as you move in a new direction?

Overcome Lost Cost Fallacy

Here are some ideas concerning how you can deal with the Lost Cost Fallacy which crops up in your life and business.

  • Are you trying to prove you made the right decision in the first place? Is being “right” more important than your business and your bottom line?

 

  • Realize that dumping a Lost Cost is in reality a sign of good decision making. It shows you’re good at knowing when to say no and when to move on.

 

  • Reflect on things from your past. Did you give up an item of Lost Cost? Aren’t you glad you got out while you could? What good things eventually came from dumping the Lost Cost item?

 

  • Ask others. Seek help from your mentors, colleagues, friends, and trusted advisors. People are usually much better at seeing the Lost Cost items owned by others. And some, like your lawyer, insurance agent, and accounting advisor (that’s us) are trained to see items you’re missing when it comes to lost costs and lost causes.

Here at Schulte and Schulte we specialize in accounting for construction subcontractors. We’ve seen a few people limping in with the Lost Cost Fallacy hanging on to them like a child wrapped around and clutching onto his daddy’s leg. When we show our clients that’s not their kid, but rather a naughty dog they learn how to “shake it off.”

Part 2 – 10 Qualities Needed for Scaling Your Construction Contracting or Service Business

If you missed part 1 with the first 5 qualities needed for scaling your construction contracting or service business you can find it here.

6. You will need to focus on helping others – on every side of the coin

Customers and potential customers

Think: What do they need? Perhaps information concerning what to expect when they hire you to perform a service for them.

How can you give it to them? Flyers, brochures, website, social networking sites.

Yet, always be on the lookout for ways to help your customers on a personal level. It may be as simple as bringing their newspaper to the door, giving a handwritten Thank You note, or defaulting to “yes” when presented with small, reasonable requests that customers make.

Employees and subcontractors

Think: What do they need? Maybe just some recognition.

How can you give it to them? Perhaps employee of the month incentives, maybe small rewards like gift cards, or something as simple as lunches or dinners to celebrate milestones or job completion.

If you need someone to help you learn what your employees need, then enlist the help of a person you know is good at noticing.

Colleagues and associates

Think: What do they need? It could be they need your help on a service project.

How can you give it to them? Answer “yes” and follow through.

“Sit downs” with your colleagues and associates are bound to aid you in determining what they need. Be sure to schedule these sit downs on a regular basis.

7. You must be obsessed with cash flow – because cash is king

We at Schulte and Schulte are excited to work with our clients to put an excellent system in place giving them the advantage of getting a clear view of their actual cash flow when taking a daily peek at their checking account balance, (we know you do it) and then gives them useful information.

8. You have to charge what you’re worth – without flinching

Charging what you’re worth is not only beneficial for you, but for others in your realm. Your family benefits. Your employees and subcontractors benefit. Your customers benefit.

Yep, your customers benefit.

  • They get excellent service
  • They get peace of mind concerning their decision to hire you
  • They get the wealth of knowledge and skill you’re able to provide them yourself or through your excellent and well trained employees.

You know things others don’t know. Put that knowledge to use and charge what you’re worth.

9. You should turn down jobs – not just because you’re busy

When something about a home owner or business owner makes your spidey senses tingle it is probably time to turn down their job.

When you run into someone who wants the job done cheap and fast and that’s not what you do, (see number 8 above) it is time to politely decline.

Once you know who your ideal client is, this step becomes easier, but it is good to pay attention to the fact that some jobs don’t pay enough in revenue, some jobs don’t pay enough in peace of mind, and some jobs . . . well, they’re just not worth it.

In whatever form it takes, you may wish to give this message to the person you won’t be working with after all.

“Dear Sir/Madam,

Thanks for the recent opportunity to quote your work. We feel that [company name] is not a good match for your project. We wish you well with your project.

Thank you.”

10. You will want to create a lasting legacy – because you want to benefit others

In this instance, I’m using the word “legacy” in its broadest sense. The legacy you leave behind (your construction company) may be managed by your children or by other people not related to you.

The important part is you will have created something meaningful, something that will benefit the lives of others now and in the future. Your family, your friends, your employees, your customers, your colleagues, your community will all be touched by the legacy you create.

If scaling your construction contracting or service business is something you’re serious about, we at Schulte and Schulte are serious about helping you.  Get in touch 480-442-4032 or Toll Free: 866-629-7735