Tag Archives: planning

Contractor New Year’s Resolutions and How to Live Up to Them

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TCBF

 

This article originally appeared in ForConstructionPros.com

 

The history of making a New Year’s resolution is actually quite old, beginning back with the Babylonians who made promises to their gods about giving back to others what they had borrowed or stolen. The Romans living during the glory days of the Roman Empire were required to make a promise to the god “Janus” (from which the month “January” derived) and their “Caesar,” that they would have to fulfill or pay some consequence of retribution.

The tradition of making a New Year’s resolution has continued down through the ages and has become more symbolic than actual focused commitment for many people. Who hasn’t made a New Year’s resolution, such as:

  • Losing weight
  • Reading more books
  • Taking more time off to relax
  • Spending more time with my kids
  • Completing that remodeling project on the house

On a personal level, making a New Year’s resolution can often end without having reached the desired result. For a contractor, making New Year’s resolutions can be similarly positioned, resulting in the same lack of achievement. Consider some fairly common New Year’s resolutions that many contractors make:

  • Calling on more prospects per week
  • Raising prices for work performed
  • Not allowing one customer to be “my only” customer
  • Giving employees a bonus (or larger bonus) next year
  • Conducting more training for employees throughout the year
  • Insuring that “Crew Huddles” are conducted twice a day…every day
  • Insuring that the Next Week Look Ahead is completed…every week

All of the above efforts are worthy of our commitment, but how do we create such things and then have the confidence that we can actually achieve the intended results? May I suggest a few tips that can turn your New Year’s resolutions into reality?

Let’s look to a few efforts you can easily make that will move our New Year’s promises to bona-fide goals that have a much higher chance of success. Then, we’ll present a few New Year’s resolutions worthy of your commitment as a contractor.

Moving New Year’s resolutions to goals

  • Record the resolution and keep it visible to you at the office and in your vehicle.
  • Put some measurement to the resolution; specific normally outperforms hope.
  • Create three to five action steps to bring your resolution to reality. Most New Year’s resolutions fail to have a realistic and written action plan.
  • Share your resolution with a trusted peer, mentor or friend and give him or her permission to hold you accountable to working your action plan.
  • Set a reward for achieving your resolution at the same time you develop your action plan. This reinforces your “want to.”

Now, you have found out by reading this far that creating one or more New Year’s resolutions is really nothing more than setting goals. First, a word of caution about setting goals. Many contractors have sincere intentions when setting goals, but many of these same contractors fail for two simple reasons:

  1. They set goals that really are not that realistic to reach due to any number of reasons including the lack of resources.
  2. Most contractors who fail to achieve goals — personal or company — fail due to the lack of a well thought out and planned action plan. They simply do not have a goal “road map” to follow and can easily be distracted.

Let’s turn our attention to a few New Year’s resolutions that may very well be worth your attention, resources and documented commitment. I’ll share with you five resolutions that can put your company on the right track to success and assist you getting off to a great start next year.

Five New Year’s resolutions for contractors

#1 “I will commit to reviewing my financials weekly: weekly/year-to-date budget, profit & loss sheet, and cash flow statement.”

Come on now, knowing your financial situation is critical to running your company. Most of the contractors I work with are well aware of the importance to staying on top of their finances. Seeing trends, potential shortfalls or increases are all important.

However, even the best of contractors can get sidelined to dealing with critical issues involving customers, poor performing workers, family issues, etc. It’s important to have your financial needs for information set up at the beginning of the year and then have weekly reports provided for review.

Create the format and consistency early and you’ll be successful at maintaining this first resolution for the entire year and beyond.

#2 “I will conduct a weekly communication meeting with my immediate staff every Monday.”

Fall down here and you fall back into the pit of confusion, miscommunication and poor results. Communication meetings alone will not eliminate all of your problems but will reinforce clarity and correcting faulty thinking, planning or actions before they happen. Call this New Year’s resolution what you want, just be sure to hold your weekly staff meeting every Monday…no exceptions!

#3 “I will see to an accurate schedule being created and maintained.”

Oh boy, now I’m really getting into some kitchens with this one. I’ve never had a contractor or senior leader of any construction company disagree with me that scheduling is first and foremost something that must be done. Yet some of these same contractors and senior leaders become frustrated when schedules are not executed due to weather, poor performance, special customer requests, etc.

Scheduling isn’t just the document or the white board with a bunch of tasks and locations assigned. Rather, it’s a thinking and discussion process that invites a mixture of what is needed to accomplish the schedule with the possibilities for interruptions.

It is in the discussions about the possibilities for interruptions that back-up plans can be created and scheduled.

Be committed to a “look ahead” of some rolling time frame (one, two or three weeks) and schedule your future. Then share the weekly updates with those impacted by and executing your schedule.

#4 “I will see that a preventative maintenance program is developed and monitored.”

Much of the downtime that takes place in the construction industry is due to equipment, vehicle and tool breakdowns. It’s simply amazes me the number of specialty contractors who will forego daily and weekly check-ups and inspections to ensure that the “tools of their trade” are in working order.

Postponing that oil change on a vehicle or delaying checking the lubrication and water levels on equipment is inviting disaster of a major and profitable consequence.

Develop a thorough “PM” plan (i.e. document) for every vehicle, piece of equipment and tool of importance to your work and assign individuals to personally inspect and audit that such efforts are being executed.  In the heat of working it is only natural for workers to not stop long enough to inspect their equipment and tools until there is a total breakdown.

#5 “I will personally meet with each employee once or twice a quarter.”

As the owner or a member of the senior leadership team, you must reach out to each of your workers. Certainly it’s easier for the contractor of five to 15 employees to accomplish this action but you might be surprised how many small contractors still do not visit with each worker.

If your possible employee contacts are in the hundreds then certainly adjust your amount of contacts accordingly. BUT, don’t miss the primary point here: build up the people who are building your company!

It is your employees who are executing work that customers either love or will never buy from you again. It is your employees who are creating the reputation of your company that might take you to higher levels of success or require years of repairing. It is your employees who can be just a great leader’s effort away from providing you with more joy, pride and fun to lead than you could have ever imagined.

When you recover from the merry holidays and the New Year’s fireworks take the time and really consider just what you want from this new year. Don’t just think about what you would like to realize this next year…write your New Year’s resolutions down on paper and put some critical thinking to developing plans to reach those resolutions.

You want some real fun?  Get your company leaders to set out three to five of their own New Year’s resolutions, following the same guidelines presented earlier.

Here’s to turning your New Year’s resolutions into the greatest year that you’ve had as a contractor or senior leader.  Go for it!

Strategic Planning, , ,

Planning is For Winners

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I’ve just completed a two day visit with an incredible contractor.  They are not very large in revenue this past year; they did a little more than five million dollars in sales.  However, what they made would easily be envied by many contractors, no matter the size.

Looking deeper at the reasons for their prosperity it was glaringly obvious.  They control their expenses!  How?  The answer is even more simple…and obvious.  They PLAN!

seminarEach Monday morning they hold an employee wide meeting that reviews and reminds each crew as to their work schedule for the week.  In front of everyone each crew provides their strategy to get the week’s scheduled work completed.  Normally this type of meeting is attended for crew leaders, estimators, schedulers, and owners.  Not at this company, everyone is there.  In fact, members of each crew actually provide the strategy and execution plans for the week.

The second obvious aspect of planning is what is completed for each project completed.  Each morning each crew meets to discuss what is needed for that day.  No truck leaves the yard until every truck and worker has exactly what they need to complete that day’s work.  At the conclusion of each day the crew then reconvenes to discuss what happened during that day of work and then discussion about what will be needed the following day.  The crew leader takes notes, if needed, on each meeting.

Now, many contractors hold meetings such as described in the previous paragraph.  What then makes this contractor’s effort unique?  Quite honestly, it is the amount of detailed thinking and planning that takes place.  Let me briefly share some of the critical components of successful planning that is embraced by my contractor friend. [pullquote]Now, many contractors hold meetings such as described in the previous paragraph.  What then makes this contractor’s effort unique?  Quite honestly, it is the amount of detailed thinking and planning that takes place. [/pullquote]

First, the plan for the day’s project(s) is documented.  Each day the crew leader documents specifically what the particulars for that day are, including:

  • Material need
  • Labor need
  • Equipment/tools need

This is merely the beginning.  Next, the crew discusses:

  • What preparation is needed?
  • Who will complete the preparation?
  • What is the method or process that will be followed to execute the project?
  • Confirmation of understanding of the prints or drawings?

For many contractors, the previous questions may appear to be overly simple and assumed.  My experience with contractors however leads me to believe that the leaders may in fact raise these same questions however they are most often raised inside the leader’s head.  Most crew leaders do not discuss this information with their crews.  This is a tactical mistake that leads to misunderstanding and a waste of worker’s time on the job site.

Another final effort that is practiced by contractors really on their “A-game” is the allowance of questions to be raised by the crew workers, the very people who will be executing the plan.  Engaging your crew in the planning phase of any project, no matter what the size of the project is, will breed greater attention to details, more focused energy on getting the needed results, and actually reduce wasteful costs due to workers lack of knowledge or understanding about the project needs.

In review then let me outline what you need to do to make planning more of a positive and effective tool and technique:

  1. Document your plans for each project. (Don’t assume anything by anyone!)
  2. Engage the actual workers who will be completing the scheduled work in the planning discussion.
  3. Ask the same questions for each project, such as:
    1. What are the Material, Equipment/Tools, & Labor Needs?
    2. What preparation must be accomplished prior to starting project?
    3. How can I best position my crew to complete the work in the most cost effective and quality manner?
    4. What contact(s) must be made with the client, other contractors, suppliers, etc.?
    5. Are our copies of drawings/prints complete?  Any changes needed?
  4. Conduct a “Post Mortem” on each Project.  Discuss lessons learned, needed adjustments for the next project.

[pullquote]Planning is more than simply scheduling future work.  It is the methodical breakdown of everything that will be executed to complete the project that moves a contractor from average to superior.[/pullquote]

There really isn’t anything unusual or extraordinary about the four point outline.  What is unusual and extraordinary are the contractors who are disciplined to practice their planning efforts consistently, no matter the size of the project.  Contractors cost themselves greatly when they pay little to no attention for planning on smaller jobs.  It is often the smaller jobs that can cost you the most!

Planning is more than simply scheduling future work.  It is the methodical breakdown of everything that will be executed to complete the project that moves a contractor from average to superior.  For my money, focus more on planning and you will see greater return for every dollar spent!

Strategic Planning, , ,

8 Tips to Finish Your Year Profitably

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For many contractors the “4th Quarter” of the year is here and contractors need to be primed and ready to exert all that they can to end their year on a positive and profitable note.

Let’s look at eight “4th Quarter Tips” that just might add a bit more profits to your bottom line THIS year.

1. Refocus & re-energize your staff and crews

As you approach the final months of the year begin reminding and challenging your leaders to “reload” for a strong year-end push. This should include:

  • Each field leader should review jobsite plans and instructions prior to starting
  • Estimators should review their efforts and sharpen their pencils for more accurate bid work
  • Spend a few extra lunches on your troops to personally engage them with words of encouragement
  • Speak to performance goals that need to be achieved — even set new goals for the final quarter

2. Commit 2 to 3 weekends for equipment maintenance

Have you ever noticed that equipment rarely breaks down when you have time to fix it but always breaks down when you don’t? Early in the fourth quarter commit several weekends (however many you need) to assess, maintain or repair each piece of equipment, vehicle and all hand and power tools. Don’t take any chances!

While good contractors maintain their equipment and vehicles throughout the year it is not uncommon to have workers drive their equipment just a bit harder. As the year extends in the fall your workers are tired, and tired workers tend to be less aware (or less sensitive) to maintenance issues or to handling the equipment and vehicles with the same quality, safety and care that was practiced earlier in the year.

Remember, you want and need to finish the fourth quarter strong. Anything less than good working equipment will cost you additional dollars in emergency maintenance work, equipment rental costs or both!

3. Create incentives for all pending bids/proposals

This will require some discipline and strategy from you and your estimators. With work coming down to the final quarter many contractors tend to let their aggressive efforts fade a bit, instead focusing on finishing the work they do have under contract and scheduled. While this is needed an equal effort and focus needs to be exerted on every bid or proposal not yet signed and closed.

Creating incentives can include giving them another 2%, 3% even 5% discount on your submitted estimate to “act now.” Tie this incentive to your prospect making a decision by the end of the year — or earlier. If you are truly a seasonal contractor you might also offer the same discounts for signing the bid now for a commitment to begin work early the next year, thus building up some needed backlog.

Other incentive options include creating a situation where the customer buys the needed materials himself paying only your labor and equipment costs; or some contractors create or extend a warranty for the work proposed if signed prior to the end of the year.

Look, giving something away might not always be the answer, but you need to push every “open” bid to create some incentive to get your prospect to move now. Don’t be shy, timid or bashful about pushing this lever. Customers realize that you are in your business to make a living. Many customers might be a bit surprised if you don’t come back with an incentive. Don’t let them down!

4. Look to expand your services

Often, customers can be swayed if they feel like they are getting a bit more for their money spent. So consider another need that the customer might have and offer to include that service when you complete the original bid work. For example, a concrete or pavement contractor might offer to power wash a particular area of the existing parking lot or sidewalks for little or no increase in fee. Another example might be for the same contractor to offer to refresh existing landscaping.

Interestingly enough, I’ve personally observed contractors who actually developed new divisions of service that all started with this type of end-of-the-year effort. You certainly want to be careful what you add since you don’t want to perform less-than-satisfactory work on the new service (and thus cut into the profits you were scheduled to make on your prime work). However, don’t be blind to what might be a real need for service by the customer.

5. Practice a “Two-Minute Drill” to capture referrals and references

This should be part of your normal sales and estimating process anyway but way too many contractors fade away from this practice — especially late in the year when they are just trying to complete all the work on the schedule. Have someone in your office pull every completed project for the year, then go back and ask each of those satisfied customers for names of others who you might call on and inquire about work.

I would recommend starting with those customers who like you and who have already provided you with good leads. “Go back to the well” one more time. In fact, let them know that you will give them a “bonus” or some additional service if a referral turns into a sale. Many satisfied customers are only too happy to help those contractors who have provided quality work. Most customers like to have some bragging rights with their friends, and what better bragging right can a satisfied customer have then telling their friends, “See, I told you they were the best contractor!” [pullquote]Most customers like to have some bragging rights with their friends, and what better bragging right can a satisfied customer have then telling their friends, “See, I told you they were the best contractor!”[/pullquote]

6. Create a “Weekend Warrior” crew

While overtime hours tend to creep up late in the year it is also a time when quality tends to drop off and safety incidents become a greater possibility. So consider bringing on some part-timers who can work the weekends, giving your crews some much needed rest.

I realize that this is a hard call and finding the right “Weekend Warriors” might be difficult, but you might be able to tap into some local companies that do not work weekends: hire a few of their maintenance guys, drivers or mechanics, and pay them good weekend wages to work 10 to 30 hours over the weekend.

You will need to keep at least one or two of your key workers, perhaps a foreman, too, to keep your company’s processes and commitment to quality in practice. If you have more than a few crews you might be able to rotate easily with your better workers, allowing them to only work one or two weekends a month for the fourth quarter.

7. Call on larger contractors for additional work

Ok, before you think I’ve sold my soul, give me a quick read. Many of the larger specialty contractors and general contractors also have end-of-the-year closeout needs. Beginning in August and pushing into late October many of these same companies begin to realize, “We might not make it at our current pace or with our work crews.” When they recognize this they often are quite open to subcontracting some work to those who can provide additional firepower.

Working for a larger specialty contractor or GC has its own challenges, but when you catch them in this year-end crisis it is amazing how willing they are to negotiate. In fact, in many cases they can use you as leverage with their client to cough up more money to finish the project on time or to hit some important milestone before the winter months. No matter, it’s a real possibility for you and your company to pick up some more work and add to your profits.

8. Cut-out all wasted expenses

The previous seven tips have been offensive. I couldn’t leave this without one defensive tip that actually has a little offense in it.

Near the end of the year we begin to see what has helped us and what has not: What equipment we used a lot and what equipment we seldom used, for example. Even what services, advertising or marketing we used but didn’t get an ounce of benefit.

Make a list of such items and determine to reduce their financial impact or get rid of them altogether. I’m amazed how many contractors continue to carry insurance on equipment they rarely use or continue to subscribe to services that they haven’t used in years.

Get rid of your waste and do it NOW! Such things become obstacles to your performance and thinking. Clean house as this will assist you in preparing for next year.

Obviously there are countless other ways to finish your year strong financially. There is no room for the contractor who is too shy or proud to go on the offensive.

Remember, it is during the fourth quarter that companies, like football teams, really find out what they are made of! Go for it!

TCBF

This article originally appeared on ForConstructionPros.com

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