Should I Change My Markup If I’m Not Making Sales?

By Michael Stone – (Oct 13, 2021)

Should you change your markup method if you aren’t making sales? Don’t spend hours fiddling with numbers; invest the time in your sales skills.

It’s All About Sales: Gaining a Commitment

By Michael Stone – (Sep 29, 2021)

Can delayed job starts impact material prices and profitability? Not if you gain a commitment first. It’s all about the sales process.

Liquidated Damages in Construction

By Michael Stone – (Sep 15, 2021)

When customers start talking about liquidated damages in construction, it’s time to ask why.

Contracts Matter; Collecting Final Payment

By Michael Stone – (Sep 1, 2021)

When you provide a dishonest client a cost breakdown of their job, things can go wrong.

Make Time by Delegating

By Michael Stone – (Aug 18, 2021)

It’s easy to fool yourself into believing it’s better to do it yourself, until you realize the things you’re supposed to do aren’t getting done.

Character Matters

By Michael Stone – (Aug 4, 2021)

You can’t always determine if the person you are about to do business with is ethical, but you do know your own behavior. Choosing to operate your business with integrity is within your control.

Make Construction Work for You

By Michael Stone – (Jul 21, 2021)

Construction can be a tough business, dealing with clients who don’t realize what we’re worth, while our bodies take a beating to make their homes better.

Beliefs That Limit Your Profit

By Michael Stone – (Jul 7, 2021)

Owning and operating a construction business requires a strong will and self-direction, but those qualities can also lead you to hold on to beliefs that limit your profit.

Definition of Terms

By Michael Stone – (Jun 23, 2021)

What does a general contractor do? What is a specialty contractor? How do remodeling and new construction differ?

How Do You Measure Success in Construction?

By Michael Stone – (Jun 9, 2021)

Our goal is to help contractors build more profitable businesses, but how do you measure success? How do you know your pricing will result in a profit?

Purchasing Commercial Insurance

By Michael Stone – (May 26, 2021)

Purchasing commercial insurance can be a frustrating experience for many construction businesses.

Unit Cost Estimating

By Michael Stone – (May 12, 2021)

Unit cost estimating is breaking down a project to simple assemblies. It’s the best way to consistently acquire accurate estimates.

Handling Customer Complaints

By Michael Stone – (Apr 28, 2021)

No matter how careful you are, you, your crew, or one of your subcontractors will upset a client. How you handle customer complaints says a lot about your business and your character.

Price Proposal Deadlines

By Michael Stone – (Apr 14, 2021)

All price proposals need a deadline because you never know when material and labor costs will increase rapidly.

Construction Sales: Make Time Count

By Michael Stone – (Mar 31, 2021)

Construction sales take time and your time is valuable. Avoid these common time-wasters when selling construction services.

Construction Cash Flow and Business Success

By Michael Stone – (Mar 17, 2021)

Construction cash flow is like every other business; there must be more cash flowing in than flowing out or the business won’t survive.

Rapidly Increasing Material Costs

By Michael Stone – (Mar 3, 2021)

Quoting a firm fixed price is riskier when material costs are increasing rapidly, which is why your contract needs to address unexpected material cost increases.

Design Agreements and the Budget

By Michael Stone – (Feb 17, 2021)

The purpose of a design agreement is to get a commitment from your client to design the project so you don’t have to do the design for free. How do you keep the design within the budget?

The Cost of Callbacks

By Michael Stone – (Feb 3, 2021)

Having to return to a previous job and fix something that’s wrong costs money. Knowing the cost of a callback helps you or your crew to be more diligent to avoid them in the future.

Wrapping Up a Difficult Project

By Michael Stone – (Jan 20, 2021)

It can a challenge to finish a project, especially when it was priced too low for a difficult client and with a weak contract.

Habits for Success

By Michael Stone – (Jan 6, 2021)

Are your habits helping your company grow, or are they holding you back?

Financial Plan for Success and Survival

By Michael Stone – (Dec 16, 2020)

If you thought you were the captain of your ship, 2020 taught otherwise.

Construction Websites that Generate Leads

By Michael Stone – (Dec 2, 2020)

A construction website should be a lead generating asset. It doesn’t have to be expensive, but if it doesn’t generate leads it’s a waste of time and effort.

Why Do You Need a Written Construction Contract?

By Michael Stone – (Nov 11, 2020)

Almost all conflicts contractors face could be avoided or quickly resolved if there is a clear, detailed construction contract between the parties.

Charging a Fair Price

By Michael Stone – (Oct 28, 2020)

You can be the most ethical person in the world and if you aren’t charging enough for your work, you stand a good chance of cheating someone else.

Lowball Pricing in Construction

By Michael Stone – (Oct 14, 2020)

It’s not unusual to find a contractor who sells by deliberately underpricing or underbidding jobs and making up the difference with change work orders.

Specialty Contractors and Down Payments

By Michael Stone – (Sep 30, 2020)

Should specialty contractors require down payments even when working through a General Contractor?

Remodeling Sales: Setting the Budget

By Michael Stone – (Sep 16, 2020)

A business owner in the UK asked a question that illustrates that remodeling sales challenges are the same regardless of your location.

The Skinny on Change Work Orders

By Michael Stone – (Sep 2, 2020)

A compendium on change work orders on a new home, remodeling or renovation project; why they matter, how to price them, what to include, and more.

Building a Successful Construction Business

By Michael Stone – (Aug 19, 2020)

I take many calls from contractors whose business is more like a low-paying job than a successful construction business. Some ask, “Is it even possible in today’s economic climate? Can my business make money?”

Family Matters More Than Business

By Michael Stone – (Aug 5, 2020)

Our goal is to help construction-related business owners build a better business. We receive many phone calls and notes from our clients, and most of the time we hear good things. Sometimes we hear another side of the story.

You Have Better Things to Do than Estimate

By Michael Stone – (Jul 22, 2020)

Getting a commitment from potential clients is critical if you want to save yourself a ton of time and work putting together an estimate that won’t go anywhere. You have better things to do with your time.

Clients and Your Job Schedule

By Michael Stone – (Jul 8, 2020)

One of the concerns a homeowner has when they’ve hired a contractor is whether they’ll do what they said they’ll do. It is a legitimate concern. They don’t know what’s going on in your head, only what’s happening with their job.

Who Pays for On-the-Job Training?

By Michael Stone – (Jun 24, 2020)

Training in construction is important, especially with a shortage of employees. A general contractor asked about a subcontractor who is training an apprentice.

The Sales Call: Budget and Design

By Michael Stone – (Jun 10, 2020)

Budget doesn’t need to be a major worry during the design and build of a project if you handle it properly during the sales call.

Shady Contractors

By Michael Stone – (May 27, 2020)

If you’re doing residential construction, you’ve met all kinds of people. There are also all kinds of contractors, and some of them don’t operate ethically.

Estimating Labor in Construction

By Michael Stone – (May 13, 2020)

Our last newsletter triggered a question on estimating labor.

Estimating Errors Cost Money

By Michael Stone – (Apr 29, 2020)

Estimating the cost of a remodeling, renovation or specialty project accurately is critical if you want to be profitable.

When Business Returns

By Michael Stone – (Apr 15, 2020)

At some point this health crisis will slow down and go away. When it does, there’s a good chance we’ll be doing some things differently. But some things won’t change.

When Business Dries Up

By Michael Stone – (Apr 1, 2020)

If sales have dropped off significantly or you’re under a stay-at-home order, here are 3 things that you need to do now for both your business and your family.

Four Diamonds of Communication

By Michael Stone – (Mar 18, 2020)

Sales is about communicating and interacting positively with others. Those skills make life easier in any delicate conversation.

Hang On – Getting Through These Times

By Devon Stone – (Mar 17, 2020)

Michael Stone offers suggestions on how to keep your construction business strong during this Coronavirus emergency.

It’s Not For Us

By Michael Stone – (Mar 4, 2020)

Michael Stone shares about a note from a contractor who initially found the Markup & Profit Revisited book “too extreme” and “not for us” – but now realizes it makes sense.

Unclear Change Work Orders

By Michael Stone – (Feb 19, 2020)

Pricing changes for a change work order isn’t easy when the scope of work isn’t clear.

Time and Material Woes

By Michael Stone – (Feb 5, 2020)

Time and Material contracts are full of risk, especially on larger jobs.

Investing in Your Business

By Michael Stone – (Jan 22, 2020)

Constant input from others is necessary if you want to stay on top of both your business and your personal life.

Business or Charity?

By Michael Stone – (Jan 8, 2020)

If you’re a business owner and take on a project out of the goodness of your heart, recognize you might not get paid and will be funding the project.

Borrowing Jacks

By Michael Stone – (Dec 18, 2019)

I recently had to face what I thought would be an uncomfortable personal conversation. I fussed all morning, then went to visit the person involved.

Payment Methods

By Michael Stone – (Dec 11, 2019)

I don’t think writing a check is old fashioned, but there are so many advantages to using a credit or debit card that it’s become the preferred payment method for many.

What the Future Holds

By Michael Stone – (Dec 4, 2019)

If you were a mouse in my pocket, you’d hear the complaints I hear about both general and specialty contractors who don’t answer the phone or return phone calls.

Protect Your Time

By Michael Stone – (Nov 20, 2019)

Some people are used to snapping their fingers and having others jump. It’s irritating, but you have to remember that they’re writing the checks.

Clear Sales Communication; It’s Your Responsibility

By Michael Stone – (Nov 13, 2019)

I want to share a recent phone conversation with a contractor concerning a problem they were having with a client.

Hiring a Salesperson

By Michael Stone – (Nov 6, 2019)

I’m a firm believer in treating salespeople well. When they’re treated well, they’ll sell. When they sell, you win.

Let’s Discuss an Acceptable Hourly Rate . . .

By Michael Stone – (Oct 30, 2019)

This note is a painfully perfect example of why you shouldn’t provide details on your pricing.

About Your Exorbitant Markup . . .

By Michael Stone – (Oct 23, 2019)

From a contractor: “I am definitely going to do a better job in pre-selecting my clients after this one.”

What You Do in Practice

By Michael Stone – (Oct 16, 2019)

We want to see contractors build stronger businesses and in the process improve the reputation of our industry.

Words from an Expert on Hiring Contractors

By Michael Stone – (Oct 9, 2019)

A contractor sent us an online article written by a real estate investor with the purpose of educating you on “how to develop a fair relationship with your contractor.”

Protecting Yourself from the Protector

By Michael Stone – (Oct 2, 2019)

I’m not a fan of working with government agencies, but some situations are unique.

Final Payments and Guarantees

By Michael Stone – (Sep 25, 2019)

When clients try to change the terms of the contract, you don’t have to go along.

Insurance Quotes – Getting Paid

By Michael Stone – (Sep 18, 2019)

Insurance work can be good business, but it can also waste your time if the insurance company is playing the three bids game.

On Politely & Confidently Qualifying Leads

By Todd Milton – (Sep 11, 2019)

A guest article: How do you avoid going out on sales calls to look at jobs for folks who obviously do not qualify to purchase from your company?

Missing the Sale

By Michael Stone – (Sep 4, 2019)

Is there anything you can do about the sales you miss?

A Yardstick for Success

By Michael Stone – (Aug 28, 2019)

It’s the last Wednesday of the summer, which is a great time to look back and see how your business fared.

What Happens To Your Business If You Can’t Be There?

By Michael Stone – (Aug 21, 2019)

If you own a business, your illness or death will create business problems for your families and your employees.

Why Do You Need To Make A Profit?

By Michael Stone – (Aug 14, 2019)

Don’t confuse profit with salary or hourly wages. Making a profit isn’t optional: Your business needs profit to survive.

Promoting Your Business: The County Fair

By Michael Stone – (Aug 7, 2019)

It’s summer, and that means community gatherings for people wanting to have fun. In our area, the main event is the county fair. I’m confident there is a similar event in your area.

Cell Phones on the Jobsite

By Michael Stone – (Jul 31, 2019)

I am not opposed to the use of cell phones on the jobsite as long as the phone is used solely to communicate information about the job, and the calls are direct and to the point.

Overhead Differences: New Homes and Remodeling

By Michael Stone – (Jul 24, 2019)

A construction company building both new homes and remodeling needs to calculate a separate markup for each type of work.

Honest Relationships

By Michael Stone – (Jul 17, 2019)

There are always at least two sides to any scenario, but if you want to stay in business, consider this a lesson on how not to treat a subcontractor.

Taxes and Profit and Markup

By Michael Stone – (Jun 26, 2019)

Michael addresses a few different questions we’ve heard recently, primarily dealing with taxes and profit and calculating your markup.

When Success Looks Impossible

By Michael Stone – (Jun 19, 2019)

After reading our books and trying to do things right, why is he still not making any money?

Focusing On Price

By Michael Stone – (Jun 12, 2019)

“The #1 reason I lose jobs is ‘your price is too high.’ What am I doing wrong?”

Spare Topics

By Michael Stone – (Jun 5, 2019)

It’s time to catch up on some spare topics I have lying around. These aren’t earth shaking but they can and will impact your bottom line.

Sales: Have Options Ready

By Michael Stone – (May 29, 2019)

Give clients options when you quote the work they want done.

Contract Language That Puts You at Risk

By Michael Stone – (May 21, 2019)

Over the years, I’ve seen contract language evolve, shifting more and more responsibility to general and specialty contractors.

Subs: Take Care of Business

By Michael Stone – (May 15, 2019)

A contractor friend called to complain about problems he’s having with specialty contractors in his area. This isn’t a one-time complaint; I’ve heard the same from others around the country.

Transparency and Partnerships

By Michael Stone – (May 8, 2019)

What do you do when your partner is listening to someone who knows nothing about construction, but still thinks they knows what’s best?

Know Your Numbers: Current Ratio

By Michael Stone – (May 2, 2019)

There is a measure you can use to determine how financially solid your company is at any given point in time. It’s called the current ratio, and it’s a good idea to check it regularly.

Handyman vs Service Agreement

By Michael Stone – (Apr 24, 2019)

Is it a good idea to have a service agreement to cover small jobs under a certain amount?

Estimating, Labor Burden, and Cost of Goods Sold

By Devon Stone – (Apr 17, 2019)

When you own a small business you wear a lot of hats. Understanding the numbers might not be your favorite hat, but numbers are important because they show where you stand financially.

First Time Homeowner, Uncommunicative Builder

By Michael Stone – (Apr 10, 2019)

We’re aware that homeowners also visit our website. This letter is from a first-time homeowner who’s ready to buy, but his builder isn’t cooperating.

3 Sales Copy Habits You Have To Stop Doing Today

By Patrick Walsh – (Mar 27, 2019)

Most home improvement sales copy is filled with nothing but generalities and platitudes. It gives no real reason why a prospect would want to take the next step.

Pricing Mistakes

By Michael Stone – (Mar 20, 2019)

Everyone, and I do mean everyone, who has ever compiled an estimate has made a math error that put knots in their stomach once it was realized.

Design Agreement Fees

By Michael Stone – (Mar 13, 2019)

The last thing I want to do is cause a family problem, but apparently I did with one family.

Homeowner Advice: Some Misguided, Some Correct

By Michael Stone – (Mar 6, 2019)

Flaky contractors make us all look bad. But not all advice given to homeowners to protect themselves from fraud is good advice.

Marketing Your Business

By Brian Javeline – (Feb 27, 2019)

Don’t come up with excuses to not be marketing your business. Eventually you will be in the worst position of all, and that is when you say “I need quick help to get my phone to ring”.

Liability Insurance Tangle

By Michael Stone – (Feb 20, 2019)

Some time back we received a well-written letter about liability insurance from a contractor in Washington state.

Protect Your Business – Get Paid

By Michael Stone – (Feb 13, 2019)

Avoid losing money by recognizing some of the games that building owners play to avoid paying.

Protect Your Business – Change Work Orders

By Michael Stone – (Feb 6, 2019)

Michael discusses a ploy some building owners use to not pay for all of their change work orders. It happens in both residential and commercial projects.

You Can’t Ask Too Many Questions

By Michael Stone – (Jan 30, 2019)

When something seems amiss, don’t stop asking questions. A contractor shares his experience on a recent sales call.

Give Them What They Need to Make a Decision

By Michael Stone – (Jan 23, 2019)

Clients are changing, and if you want to stay in the game and make something more than a living, you’ll need to change with them.

Stop Giving Free Estimates

By David Lupberger – (Jan 16, 2019)

You should stop providing free estimates. It’s called free consulting, and you won’t be successful giving away your time. (Guest Article from David Lupberger, Remodel Force)

Overhead and Profit on Change Orders

By Michael Stone – (Jan 9, 2019)

You shouldn’t sign a contract that stipulates what you can charge, even if it’s just on the change orders.

The Economy and Your Business

By Michael Stone – (Jan 2, 2019)

As business owners, we need to keep an eye on what’s going on with the economy because it should influence our business decisions.

Watch Improvement Happen

By Michael Stone – (Dec 19, 2018)

As we wrap up 2018, we want to share two notes we received this year.

Design Agreements Gone Awry

By Michael Stone – (Dec 12, 2018)

We discussed design agreements last week; today we’re going to look at them from another angle. The first step is setting the budget with the client.

Protecting Design Work

By Michael Stone – (Dec 5, 2018)

A contractor who has designed projects asked how to protect his design work.

Writing a Business Plan for a Construction Business

By Michael Stone – (Nov 28, 2018)

A business plan is different than year-end planning. A business plan looks at the big picture. It’s a roadmap for the whole journey.

Make Things Happen

By Michael Stone – (Nov 14, 2018)

Without looking, how do you think your business did this year? Are you feeling more profitable or less? Is your business running more smoothly or are the problems overwhelming?

Training an Architect

By Michael Stone – (Nov 7, 2018)

A contractor we’ve known and worked with for many years sent us a note about his experience working with a new architect. Ideally, the architect would have been working with the contractor from the beginning so he could have educated the client as well.

Share Your Cards

By Michael Stone – (Oct 31, 2018)

Business cards are a simple, inexpensive way to provide everyone you come in contact with the information they need to reach you.

What Should You Do With Your Profit?

By Michael Stone – (Oct 23, 2018)

The best way to avoid paying taxes is to not make a profit at all, but it’s a rough way to live. 

Avoiding a Potential Pain in the Assets

By Michael Stone – (Oct 16, 2018)

A good guy we know was recently working with a potential client when he ran into some concerns.

Dodging Payment

By Michael Stone – (Oct 9, 2018)

There are things you can and should do when a client tries to dodge making payments.

Canvassing: Connect with the Neighborhood

By Michael Stone – (Sep 26, 2018)

One of the more unpopular things I recommend is canvassing the neighborhood around your jobs. It’s unpopular because it’s misunderstood.

Avoiding Jobs That Don’t Fit

By Michael Stone – (Sep 19, 2018)

It’s smart to specialize on the work that makes you the most money. It’s even better if you know contractors who can pick up the leads outside your specialty.

Getting the Commitment

By Michael Stone – (Sep 12, 2018)

A contractor in Hawaii sent in a note asking about a few sales issues.

Setting and Keeping a Schedule

By Michael Stone – (Sep 5, 2018)

The job is sold, schedule is set, project gets started, and suddenly it’s behind schedule. When it happens, it eats into your profit and upsets your clients.

Unrealistic Price Expectations

By Michael Stone – (Aug 29, 2018)

If they called you, doesn’t that mean they need or want the work done?

Family Fights

By Michael Stone – (Aug 22, 2018)

The topic is uncomfortable but if you’re involved in residential sales, you’ll see family disagreements. It helps to know what to do.

Make Every Possession Count

By Michael Stone – (Aug 15, 2018)

Many contractors who write us are having a problem with their business, and in many cases, it’s because the contractor has lost focus on what’s important.

Clients Working on Their Job

By Michael Stone – (Aug 8, 2018)

Should you let a client work on the job they’ve hired you and your company to build?

Doing What’s Right

By Michael Stone – (Aug 1, 2018)

How should you handle a mistake? What if it’s a mistake you made over a decade ago?

Breaking Down Price Detail

By Michael Stone – (Jul 25, 2018)

Since the end goal for both the architect and the contractor is a satisfied client, how about working together from the beginning?

Making The Trades More Attractive

By Michael Stone – (Jul 18, 2018)

If you want to attract the best people, you need to make the a good offer.

Share The Satisfaction of Working in the Trades

By Michael Stone – (Jul 11, 2018)

There’s a reason that working in the trades isn’t appealing. But if you do the work, you know there are positives that outweigh the negatives.

Profit and Loss and Markup

By Michael Stone – (Jun 27, 2018)

When your books are set up properly, it’s easy to calculate your markup, and it’s also easy to compare your actual results to your estimates.

Calculating for Taxes

By Michael Stone – (Jun 20, 2018)

Taxes are the price you pay for being profitable. It’s a good thing when your business is in the black and you need to pay taxes on it. It’s not good when you’re taken by surprise.

Making Money or Keeping Busy?

By Michael Stone – (Jun 13, 2018)

When everyone but your family benefits from your business, it’s time for a reality check.

Lower Your Price, Gain Exposure

By Michael Stone – (Jun 6, 2018)

Should you take every opportunity to increase exposure for your business? 

Can They Find You?

By Michael Stone – (May 30, 2018)

If you’re a dependable, responsible construction-business owner, do potential clients in your area know you exist?

Getting Ahead

By Michael Stone – (May 23, 2018)

As we head into Memorial Day weekend, we want to share an upbeat note we received in April from a client.

Looking for a Deal

By Michael Stone – (May 16, 2018)

It’s amazing the things a potential client can think of to get you to lower your price.

Working With a Designer

By Michael Stone – (May 9, 2018)

Is there a common ground or way that the designer and contractor can do business together, each make the money they need to, and not overcharge the customer?

Job Superintendent / Leadman

By Michael Stone – (May 2, 2018)

Finding good employees is difficult, and you want to keep the ones you find. Sadly, I’ve spoken with a few contractors who’ve had their lead person, the one running their jobs, quit in frustration.

Construction Business Safeguards: Fraud and Embezzlement

By Michael Stone – (Apr 25, 2018)

We hear many stories from business owners who have had to recover from the theft of funds by their own employees. Today we’re sharing a list of things you can do to protect yourself and your business.

Hiring Friends and Family

By Michael Stone – (Apr 18, 2018)

When you own a small business you’re often asked to hire family or friends. Sometimes it works out great, but not always.

Pricing Handyman and Service Work

By Michael Stone – (Apr 11, 2018)

There are two schools of thought on pricing handyman projects and service work: T&M or flat rate pricing. They both have advantages and disadvantages.

Does This Apply to My Business?

By Michael Stone – (Apr 4, 2018)

We received a note from a contractor asking if what we talk about applies to his business.

Single Discipline Leads, Referral Fees

By Michael Stone – (Mar 21, 2018)

The note stated, “Because I’m the middle man, my subcontractor loses out a potential project.” That’s true, and it’s one reason you shouldn’t get into the position of being a middle man.

Quality Standards

By Michael Stone – (Mar 14, 2018)

“Let’s see what the contract says about that.”

Do Your Work

By Michael Stone – (Mar 7, 2018)

For the past few years I’ve had general contractors tell me that they can’t get specialty contractors to return their calls, show up on time or show up at all for a job. Now I’m hearing from generals who are getting calls from subs, looking for work.

Dishonest Clients

By Michael Stone – (Feb 21, 2018)

We often hear from contractors dealing with a client who, for whatever reason, has decided to change the terms of their contract. Other professionals have the same problem.

Sales: Ask Questions and Get Answers

By Michael Stone – (Feb 7, 2018)

The one question too many salespeople stumble over is the budget for the job. They are worried that it looks bad to ask.

Justifying Your Price

By Michael Stone – (Jan 24, 2018)

If your lawyer believes you have to justify your pricing just because someone doesn’t want to pay their bill, it’s time to find another lawyer.

How Productive Are Your Employees?

By Michael Stone – (Dec 12, 2017)

As you add employees to a growing company, you’ll both increase production and decrease productivity. You need to account for it when you’re estimating and pricing your jobs.

Transparency – Or Maybe Not

By Michael Stone – (Nov 29, 2017)

Is transparency the way to go when selling? Be careful who you listen to.

Planning for Profit

By Michael Stone – (Nov 15, 2017)

We recommend setting goals every year, beginning the process about now. If making a profit is one of your goals, Michael outlines practices that will help.  

Selling Your Services Online

By Michael Stone – (Oct 11, 2017)

We were recently asked about an online service designed to make it easier to handle sales calls.

Loaning Your License

By Michael Stone – (Oct 4, 2017)

It’s interesting how friends, relatives, and other contractors try to rope you into their schemes by asking to borrow your license to build their jobs.

Subcontractor Payment Schedules

By Michael Stone – (Sep 27, 2017)

Payment schedules need to be in writing, that includes between a general and specialty contractor.

Collecting Payment from a Dishonest Homeowner – Updated

By Michael Stone – (Sep 20, 2017)

Not all of your clients are honest. There are even a few who have no intention of paying you for the work you do.

Markup or Margin: Be Logical

By Michael Stone – (Sep 6, 2017)

If they tell you the formula to use will make you more profit, that’s baloney. It’s the numbers you use that determines your profit.

Profit Leaks

By Michael Stone – (Aug 23, 2017)

These aren’t earthshaking topics, but they are the things that cause problems on jobs, leading to disgruntled clients, lost referrals, and lower profit margins.

A Reputation for Cleanliness

By Michael Stone – (Aug 16, 2017)

Every day we drive by a new home under construction. I don’t know how many people pass this new home every day but I would guess it’s in the thousands; the road is always busy.

Resolve Their Challenges, Make The Sale

By Michael Stone – (Aug 9, 2017)

A survey outlines the challenges homeowners say they’re facing when they remodel or renovate their home. It’s valuable info, because it tells you what they need help with. It’s your job to show them you can provide that help.

Pricing Fears

By Michael Stone – (Aug 2, 2017)

A recent Houzz survey confirmed what you need to know if you’re in sales; it’s not all about price.

Last Minute Requests Before Closing the Sale

By Michael Stone – (Jul 26, 2017)

What do you do when a potential client waits until the proposal is together to request itemization on the project?

We Don’t Advertise

By Michael Stone – (Jul 12, 2017)

“We don’t advertise” is well meaning mischief at its worst. It cuts your company off from a large pool of potential clients who are looking for a contractor to help them get their job built.

Should You Purchase a Construction-Related Franchise?

By Michael Stone – (Jun 28, 2017)

If you’re considering purchasing a franchise, or if you’ve been contacted by a franchisor because of your success, put your emotions on hold and evaluate it carefully.

Making a Positive First Impression

By Michael Stone – (Jun 21, 2017)

Building trust always starts when you are first contacted by a potential client. Michael discusses how to do it right, and how to do it wrong.

Employees Are Important

By Michael Stone – (Jun 14, 2017)

It’s true that employees are important, to your business and/or to your subs who get your jobs built. But they aren’t the reason you’re in business.

Objections Book

By Michael Stone – (Jun 7, 2017)

An objections book is a history of your sales calls. It includes everything you said and did, right or wrong. I have only met two or three others in my thirty-plus years of direct selling who took the time to compile a book, but each one became outstanding in their profession.

An Opinion on Itemized Estimates

By Michael Stone – (May 31, 2017)

A building owner challenges our statement that contractors shouldn’t itemize their estimates.

A Minimum Price

By Michael Stone – (May 10, 2017)

Being profitable doesn’t mean getting rich off your clients.

Job Costs and Overhead

By Michael Stone – (May 3, 2017)

I’ve seen contractors try to apportion overhead on a daily, weekly, monthly or per job basis when compiling their estimates. I don’t recommend any of those approaches.

Cost Plus with a “Not to Exceed”

By Michael Stone – (Apr 26, 2017)

A contractor asked for my opinion on a request he recently received. It’s not a win-win proposition.

Setting the Budget First

By Michael Stone – (Apr 19, 2017)

In our book, Profitable Sales, A Contractor’s Guide, we discuss the need to set the client’s budget for a project. One of our clients sent a note recently that explains why setting the budget up front is important.

Strengthening Your Business

By Michael Stone – (Apr 12, 2017)

I’ve been around the construction industry long enough to know that it isn’t always rosy. When a recession hits, construction is one of the early victims.

Let Them Know What to Expect

By Michael Stone – (Apr 5, 2017)

If you’re doing service work, make sure your client knows what to expect before you start.

Cancelled Design Agreements

By Michael Stone – (Mar 29, 2017)

A call came in from a friend recently. It seems that a client of his wants to cancel a signed design agreement.

Estimating Incomplete or Conceptual Plans

By Michael Stone – (Mar 15, 2017)

To be blunt: projects like this are a waste of time. I’ve rarely if ever seen a request like this turn into a contract

Clients Changing the Contract

By Michael Stone – (Mar 8, 2017)

I’ve written before about clients who decide to make changes to a contract. Last week I heard from two different contractors who had to deal with this, and I want to share their stories.

Website SEO Scams

By Brian Javeline – (Mar 1, 2017)

I received a note from Michael Stone. He said, “You wouldn’t believe some of the stories I hear from contractors being approached by people claiming they can help with SEO or getting leads. I want to cover this in a newsletter.”

Are You Worth It?

By Michael Stone – (Feb 22, 2017)

Construction is a tough industry. For some, the hardest part is making the sale. They’re out of their comfort zone. They don’t want to talk about money or ask for the sale.

How to Be Profitable

By Michael Stone – (Feb 15, 2017)

It’s important to be focused on profitability. You’re in business because you want to keep a roof over your head and food on your table; you can’t do that when your business is losing money.

Can You Be Both Competitive and Profitable?

By Michael Stone – (Feb 8, 2017)

You can’t lower your price and expect to make up for it by selling more, because there is a limit to how much you can produce. Every job needs to be profitable.

Generational Differences

By Michael Stone – (Jan 25, 2017)

I’ve been reading advice in a few construction magazines on how to sell to millennials, and I don’t understand the fuss.

Who Generated The Lead?

By Michael Stone – (Jan 18, 2017)

When subcontractors or employees are approached, they are obligated to notify the general contractor who brought them there, and let him handle the lead.

Mediation or Arbitration?

By Michael Stone – (Jan 11, 2017)

Your contract should call for arbitration, not mediation, to settle disputes.

Finding Construction Employees

By Michael Stone – (Jan 4, 2017)

If I had a nickel for every time I’ve heard that it’s difficult to find employees, I’d buy an island in the South Pacific.

Contractor Issues with Architects & Designers

By Michael Stone – (Dec 7, 2016)

These relationships can be profitable for both parties, but they can also quickly become squabbles if the relationships aren’t valued.

Pricing Without Plans

By Michael Stone – (Nov 9, 2016)

It’s important to remember you aren’t in business to drive around and give out numbers. If you’re a specialty contractor, you also aren’t in business to provide numbers to architects or general contractors.

I Don’t Need Any Leads!

By Michael Stone – (Nov 2, 2016)

“I have more work than I can do. I tell new leads to call me after the first of the year.”

Client Causing Job Delays

By Michael Stone – (Oct 19, 2016)

If you want to lose money on a job, agree to let your client do part of the job or provide their own materials without setting clear boundaries.

Business Owner, or Hired Labor?

By Michael Stone – (Oct 12, 2016)

Ever heard the old saying that something “pushed your buttons”? It’s an emotional reaction, usually not positive. Well, Devon took a phone call last week that pushed my buttons.

Right of Rescission

By Michael Stone – (Oct 5, 2016)

When I’m working with a group of contractors, I often ask how many are providing a Right of Rescission form with their contracts. Many contractors aren’t even aware of the document or realize its importance.

Alternatives to a Bad Deal

By Michael Stone – (Sep 28, 2016)

Some business relationships turn out badly; with experience, you can identify and avoid them.

Growing Pains

By Michael Stone – (Sep 14, 2016)

If you’re running your business like a business and not a hobby, you’ll start getting more leads, and it’s exciting to watch your business grow.

Pricing Small Jobs

By Michael Stone – (Aug 24, 2016)

It’s hard to remember what you’re worth, especially if you’re spending time on jobs that cost you money.

Preparing to Estimate

By Michael Stone – (Aug 17, 2016)

Estimating is necessary, but it isn’t easy; it’s hard, tedious work. There are four basic things you need before you begin your estimate.

An Unbalanced Partnership

By Michael Stone – (Aug 10, 2016)

I’ve written before about middlemen in the construction industry: I’m not fond of them. There is another type of middleman in the construction industry, facility and property management companies.

Construction Allowances: What They Are, How to Use Them

By Michael Stone – (Jul 27, 2016)

A construction allowance is a dollar amount included in the contract for a particular item. There are two types of construction allowances: material and installed.

Working for Big Box Stores

By Michael Stone – (Jul 20, 2016)

A young guy asked if signing on with one of the big box stores was a good idea. He hasn’t discovered yet that getting a lot of work doesn’t mean you’ll make lots of money.

Sales Issues: Leaving Your Paperwork

By Michael Stone – (Jul 6, 2016)

Generally speaking, when potential clients don’t want to make a commitment but want to keep your paperwork, they intend to shop it around.

Sales Issues: We’ll Be Getting Three Bids

By Michael Stone – (Jun 29, 2016)

Too many homeowners believe they need three bids for their project. The intent, of course, is to compare proposals so they can make the best decision.

Sales Issues: We Want the Lowest Bid

By Michael Stone – (Jun 22, 2016)

Some clients want the lowest bid for their project, and nothing else matters. It’s your job to try to educate them.

Markup Worries

By Michael Stone – (Jun 8, 2016)

Remember, you’re in business to provide a service and make a profit doing it.

Subs or Employees – Are Subs More Expensive?

By Michael Stone – (Jun 1, 2016)

Does subcontracting raise the price of the project?

Don’t Be This Contractor

By Michael Stone – (May 25, 2016)

 Please don’t be this contractor. Please don’t be that homeowner. 

Your Labor Rate and Your Markup

By Michael Stone – (May 18, 2016)

Using the wrong labor rate, or using someone else’s markup when you don’t know their assumptions, is one of the biggest mistakes we see and the difference can be thousands of dollars.

Adjusting Your Markup

By Michael Stone – (May 11, 2016)

In Markup & Profit Revisited, we explain how to calculate your markup. We’re often asked if you can adjust your markup based on the length of the job.

Hiring A Contractor: Truth vs. Myths

By Michael Stone – (May 4, 2016)

Some advice on hiring a contractor is just plain wrong.

The One-Legged Sales Call: Find Out If They’re Serious

By Michael Stone – (Apr 27, 2016)

One-legged sales calls. Frankly, this is much to do over a problem with a fairly simple solution.

Careful What You Pay for a Lead

By Michael Stone – (Apr 20, 2016)

I recently read an article reviewing a new lead-generating service, and it stated, “Our contractors only pay us a 5% referral fee, once they win the job.”

Bidding or Selling?

By Michael Stone – (Apr 13, 2016)

Are you bidding on jobs, or are you selling them? There’s a difference.

Keep it Simple

By Michael Stone – (Apr 6, 2016)

When it comes to pricing your jobs, you need to keep it simple, especially if you want to make the sale.

Matchmaker, Matchmaker

By Michael Stone – (Mar 30, 2016)

Another day, another service that helps homeowners find a contractor.

Free Estimates

By Michael Stone – (Mar 23, 2016)

What you do has value. Respect your time and your knowledge.

Keep Your Head, Get Paid, Protect Yourself

By Michael Stone – (Mar 16, 2016)

Sometimes a potential client expects you to work for free. That’s not a smart route to take unless you have a lot of money in the bank and time on your hands.

Be Prepared

By Michael Stone – (Mar 9, 2016)

When things are good, it’s smart to ask yourself a critical question: Are you prepared for the next downturn?

Lowering Another Contractor’s Overhead

By Michael Stone – (Mar 2, 2016)

Business needs to be win-win. If the services of the contractor are needed and provide value, the contractor needs to be paid accordingly

Designing a Magnet

By Michael Stone – (Feb 24, 2016)

There are two steps to attracting leads. The first step is being known; the second step is making them interested enough to contact you.

Are Your Clients Thinking “So What?”

By Michael Stone – (Feb 17, 2016)

On a sales call, if you’re speaking and your potential client is thinking “so what?”, you’ve lost them.

Insurance Repair Projects

By Michael Stone – (Feb 10, 2016)

A coaching client shared two recent experiences while doing insurance repair projects. One was positive, one wasn’t.

Clients Wanting Cost Plus

By Michael Stone – (Feb 3, 2016)

Many building owners want a Cost Plus contract because they believe they’ll have more control over the total cost of the project. It’s your job to educate them on the downside.

When Your Client Sets the Price

By Michael Stone – (Jan 27, 2016)

When your client wants a lower price, something has to change. It shouldn’t be just your price.

Maintaining Your Right to Lien

By Michael Stone – (Jan 20, 2016)

At least once a week I hear from someone who can’t get paid for work they’ve done.

Getting Quotes from Subs

By Michael Stone – (Jan 13, 2016)

Without a paid design agreement from the client, you aren’t sure you’ll get the job. Your subs are even less sure they’ll get the job.

Practice Listening

By Michael Stone – (Nov 25, 2015)

It’s the beginning of the holiday season, and I’d like to talk about a topic that can change both your sales ratio and your family relationships.

Documenting Jobs

By Michael Stone – (Nov 18, 2015)

There are two benefits to documenting your jobs. One is protecting yourself in case there is a disagreement about the project. The other is providing information that will help you when you’re promoting your business.

Itemization Woes

By Michael Stone – (Nov 11, 2015)

We’d like to share an email received from an anonymous homeowner. If you believe that it’s smart to provide an itemized invoice, this will make you reconsider.

Sharing Company Goals

By Michael Stone – (Nov 4, 2015)

It’s the time of year when you should be planning for the coming year. Once you set your plans for the year, how much of those plans should you share with your employees?

Hiring Construction Employees

By Michael Stone – (Oct 28, 2015)

Make sure your new hire is compatible with your business, in both personality and skills.

Continuing Your Education

By Michael Stone – (Oct 21, 2015)

One of the pitfalls of graduating from high school and/or college is the belief that you’ve finished your education. I close my classes with a slide that says, “To Keep Your Money In Your Company,” with an arrow pointing to “Education.”

Your Sales Presentation

By Michael Stone – (Oct 14, 2015)

Given how valuable leads are, once you get one, you need a sales procedure to help make the sale.

Cutting Prices

By Michael Stone – (Sep 30, 2015)

I can’t tell you how many times in the past few weeks I’ve had contractors tell me they are cutting their prices to get work. I even took a call from a contractor who told me we should come to his town “because all the NARI members are busy cutting their prices.”

Hire Slowly, Fire Quickly

By Michael Stone – (Sep 23, 2015)

Issues that eat into profitability: It’s easy to hire someone who looks good on paper. If the resume is terrific and their references are glowing, they get hired.

Stay the Course

By Michael Stone – (Sep 9, 2015)

Ever had a day, maybe a week, where you said, “That’s it, I’m done. Enough already.” You wanted to put a sign in the front window: “FOR SALE: One Construction Company, CHEAP! (I’ll pay you to take this stupid thing off my hands.)”

Pricing Too Low

By Michael Stone – (Sep 2, 2015)

It is a fact of life that when you sell construction-related services, you’ll have clients tell you that your price is too high. Bless their hearts. They have no idea what would be a fair price for the work they want done, they just know that your price is too high.

Low-Value Jobs

By Michael Stone – (Aug 26, 2015)

I read many articles on the construction industry looking for, among other things, information on how the construction industry is doing and what we can expect in the immediate and near future. One statistic that always interests me is the size of the average remodeling job.

It’s Time to Stop Being Superman

By Michael Stone – (Aug 19, 2015)

In every business, some things we do eat into our profitability. Do you run your business or does your business run you?

Markup on Subs

By Michael Stone – (Aug 12, 2015)

A lot of contractors don’t believe they need to use their full markup on subcontractor quotes. Let me explain why that can be a mistake.

Proprietary Business Information

By Michael Stone – (Aug 5, 2015)

An architect he knew asked him to meet with the owners of a proposed new home. As they were discussing the project, the architect asked our friend, in front of the clients, “What’s your overhead and profit percentage?”

The Relationship Between Budget and Design

By Michael Stone – (Jul 29, 2015)

One problem contractors run into is dealing with clients who want to change the scope of the project after signing the design agreement, and not realizing how it might impact their budget.

Know Before You Quote

By Michael Stone – (Jul 22, 2015)

It’s cheaper to ask questions than pay for mistakes. A coaching client is trying to fix the problem created by an former salesperson’s expensive omission.

Bookkeeping, Markup, Taxes, Advertising

By Michael Stone – (Jul 15, 2015)

This week I want to catch up on a few things that have been bothering me.

Can You Be Too Professional?

By Michael Stone – (Jul 8, 2015)

Can you be too professional? A contractor shares the story of a sale that he was told he lost because he was dressed too professionally and responded to questions too confidently.

What’s a Reasonable Advertising Budget?

By Michael Stone – (Jun 24, 2015)

How much should you spend on advertising? How much is too much?

The Salesperson’s Real Job

By Michael Stone – (Jun 3, 2015)

When I think about major influences on my sales training, I think of Tom Hopkins. He was an outstanding salesman who become a gifted sales trainer, and I still receive and read his newsletters.

Dishonest Clients; Collecting the Final Payment

By Michael Stone – (May 27, 2015)

How do you deal with a dishonest client? I recently corresponded with a contractor concerning this issue.

Make Sales Happen

By Michael Stone – (May 20, 2015)

A design agreement is nothing more than an agreement to work with the client to design their project. That’s not the final goal of a remodeling contractor; your business is about building projects.

Are They Helping or Hurting?

By Michael Stone – (Apr 29, 2015)

I’m not convinced that Porch is interested in helping our industry. From what I’ve seen, I think they’re only positioning themselves to make money off contractors.

Referral Fees and Sales Commissions

By Michael Stone – (Apr 15, 2015)

A referral fee is what you pay to the person who provides you a lead. A sales commission is what you pay a salesperson to close a sale.

Wasting Time: Red Flags on a Sales Call

By Michael Stone – (Apr 8, 2015)

A potential client wanted to get a bid on some work at her home. Our coaching client was pretty sure the lead was dead, and wanted to know if she should have done anything differently to have made the sale.

Who should do the talking?

By Michael Stone – (Mar 25, 2015)

I was asked recently by an electrical supplier, “Why do general contractors often not want their subcontractors to have any communication with the home owner?”

Another Myth: Lower Your Markup for Larger Jobs

By Michael Stone – (Mar 18, 2015)

“I am working on designing a few jobs with the job costs starting around $125,000 and up. What is your opinion on markup when the job costs are getting bigger? I want to make sure I am staying competitive.”

Owner Deserves a Salary

By Michael Stone – (Mar 11, 2015)

I applaud this person’s efforts, helping someone else with the business side of business so the craftsman can continue being a craftsman. But this craftsman is going to have to either learn how to run a business or start charging enough for his work to both feed himself and pay an office manager.

Work Product Exclusion, Hiring Subcontractors

By Michael Stone – (Mar 4, 2015)

Last week’s article discussed the pros and cons of using employees or subcontractors to get jobs built. This week, Myles Corcoran of Myles F. Corcoran Construction Consulting Inc., presents another point of view.

Subs or Employees, That is the Question

By Michael Stone – (Feb 25, 2015)

Recently I’ve had a number of discussions with company owners about how to get their jobs built. It all comes down to using subs or employees, or as some like to say, “Should I be a paper contractor or a real contractor?”

Payment Schedules on Small Jobs

By Michael Stone – (Feb 18, 2015)

It’s important to manage the payment schedule on your jobs, but not all jobs are the same.

Penciling a Salesperson

By Michael Stone – (Feb 11, 2015)

If salespeople know the business owner will back them up and pay them fairly, they’re motivated to produce profitable sales. If they aren’t motivated to make sales, the business is in trouble.

Conduct Business Like a Business Owner

By Michael Stone – (Feb 4, 2015)

One of our coaching clients was telling me about his problems finding a subcontractor for a job. If you’re a general contractor, this might sound all too familiar.

Client Outrage

By Michael Stone – (Jan 28, 2015)

Real or fake outrage can be a client’s attempt to elicit an emotional response from you to get what they want. It often puts you in the position of questioning yourself and your company, not dealing with the subject at hand.

Hiring Employees

By Michael Stone – (Jan 7, 2015)

I’m hopeful our industry will continue to improve as owners do the remodeling, repairing or building they’ve delayed. When you sell those jobs, will you use employees or subcontractors to get them built?

Generals and Subs: Working Together

By Michael Stone – (Dec 10, 2014)

It’s important to define the ground rules of your relationship.

Creating New Employees

By Michael Stone – (Nov 26, 2014)

We have a major problem in our industry: we’re getting old. There aren’t enough young people getting into construction.

Design Agreement Contract, Letter of Intent

By Michael Stone – (Nov 6, 2014)

A design agreement allows you to get paid for your work. Don’t waste your effort or your time.

A Few More Contract Issues

By Michael Stone – (Oct 29, 2014)

Retainage clauses, removing the finance charge clause on the last payment, “we’ll pay you when we get paid”.  

Contract Language for Client-Caused Damage

By Michael Stone – (Oct 22, 2014)

What do you do when a client calls about a problem they created? Preventative measures make the difference between a profitable job and losses.

They Want a Bid Today

By Michael Stone – (Oct 15, 2014)

Every once in a while, your phone will ring and the potential client on the other end will tell you they want a bid today. What should you do? 

Business Protection for Contractors

By Michael Stone – (Oct 8, 2014)

The popular belief is that contractors are the villains and homeowners are the victims.  But if you’ve worked with the public for very long you know there are also dishonest clients.

Final Payments, Emailed Quotes

By Michael Stone – (Oct 1, 2014)

Never let your final payment exceed 2% of the sales price. And your contract should include a finance charge clause for payments not made on time.

Progress Payments: Keeping a Positive Cash Flow

By Michael Stone – (Sep 24, 2014)

We used to get three payments on jobs. 1/3, 1/3, 1/3. That’s not a smart business practice.

Money Changing Hands

By Michael Stone – (Sep 18, 2014)

It's easy to ask someone to do something; it's harder to hand over money. Your client isn't committed until they've written the first check.

Accounting – Keeping Track of Your Jobs

By Michael Stone – (Aug 27, 2014)

It’s easy to know if you’ve made a profit when every transaction is complete in a day. It isn’t as easy in construction, where a job might take a week, a month, or even more than a year to complete.

Leads are Gold

By Michael Stone – (Aug 13, 2014)

Too many contractors care only about getting leads. They believe that if they get enough leads and can bid on enough jobs, they’ll be successful. That’s not the case.

More than a Paycheck

By Michael Stone – (Aug 6, 2014)

I recently had the opportunity to visit with some construction employees and it struck me that they didn’t know much about the company they worked for.

What’s Your Specialty?

By Michael Stone – (Jul 23, 2014)

If you're one of the many contractors who start an advertising message with, "We specialize in . . . ", good for you. But if you follow that statement with a long laundry list of things you do, you're hurting your business.

Supply and Demand

By Michael Stone – (Jul 16, 2014)

The services offered by construction businesses are in high demand right now. Can we look at this industry from another viewpoint?

The Games People Play

By Michael Stone – (Jul 9, 2014)

Why would a developer ask for a cost plus quote to replace a fixed price quote? Because he wants the very same work done at a lower price.

Getting Jobs Built

By Michael Stone – (Jul 2, 2014)

Three approaches to managing jobs. Also, paying production employees and making sure the work gets done. 

Getting Involved with a Storm Chaser

By Michael Stone – (Jun 18, 2014)

Last week, a contractor called to ask my opinion on getting involved with storm chasers that were in his area.

Getting Paid

By Michael Stone – (Jun 11, 2014)

If the payment schedule is adjusted after you’ve started a job and they aren’t willing to pay what’s owed, file liens. You must protect your right to be paid.

Getting Business as a Sub

By Michael Stone – (Jun 4, 2014)

One of the questions we’re asked most often is how a subcontractor can get jobs. How do you go about meeting general contractors and letting them know you’re available to build their jobs?

When Clients Do an End Run

By Michael Stone – (May 28, 2014)

Stay ahead of your clients. Write a detailed contract that protects you from as many unpleasant scenarios as possible, and work from written agreements with both your subcontractors and your employees. 

Most Profitable Construction Business Model: Do You Need Employees?

By Michael Stone – (May 21, 2014)

What is the most profitable construction business model? Do you need employees? /p>

Subcontractors or Employees?

By Michael Stone – (May 7, 2014)

Sometimes they request you use employees instead of subs, or work on a T&M basis. Clients don’t understand how the construction world works. It’s your job to educate them.

When Should You Cut Your Markup?

By Michael Stone – (Apr 30, 2014)

As the economy slowly improves, we are being asked to revisit issues we haven’t discussed for many years. 

Surprises Aren’t

By Michael Stone – (Apr 17, 2014)

Estimate your jobs properly so surprises don’t happen.

Things That Cause Problems, or, How to Upset Your Clients

By Michael Stone – (Mar 20, 2014)

Seven issues that upset clients. And when clients are upset, either you won’t make the sale or you might not get paid.

Making Money, Losing Money or Breaking Even? What Now?

By Michael Stone – (Mar 12, 2014)

Last week we discussed knowing where you stand financially, whether you are making money, losing money, or breaking even.  What now?

Making Money, Breaking Even, Losing Money

By Michael Stone – (Mar 5, 2014)

This is the criteria I use to tell if a company is making money. It isn’t the only measure, but it’ll give you an idea of how your business is doing.

Contracts, Change Work Orders, Punch Lists and More

By Michael Stone – (Feb 26, 2014)

A selection of issues that should be written into every contract to protect your profitability.

Let’s Not Talk About the Backlog

By Michael Stone – (Feb 19, 2014)

A major mistake contractors make is to tell a client they can’t start the job for 3-4-5 months. “We are backlogged, can’t possibly start your job before then.”

Markup Materials Only?

By Michael Stone – (Feb 13, 2014)

In a perfect world, estimated costs will match actual job costs. At the end of a perfect year, total job costs will equal projected job costs. It’s not a perfect world.

Contracts to Avoid

By Michael Stone – (Feb 5, 2014)

If you are going to deviate from a standard fixed price contract, look at your approach from your client’s point of view. Make sure they know what to expect and what you’ll do.

Contract Commitment Language

By Michael Stone – (Jan 30, 2014)

Commitment language in your contracts, payment schedules that help cash flow, right of rescission language. With a few extra comments.

Contracts – Dates, Times, Conferences

By Michael Stone – (Jan 22, 2014)

Many construction-related disputes can be avoided with a well written contract. Here are a few of the things that need to be included.

It’s Time to Change Our Image

By Michael Stone – (Jan 8, 2014)

I have an audacious goal. I’d like to see a shift in the public perception of the construction industry.

Get a Commitment Before You Invest

By Michael Stone – (Dec 18, 2013)

If you want to make the best use of your time and not allow others to waste your time, don’t estimate major projects without a design agreement.

Estimating Construction

By Michael Stone – (Dec 12, 2013)

Estimating construction isn’t easy. When profits are down, missing the estimate on jobs is almost always part of the reason.

Estimating Blunders, Part 4

By Michael Stone – (Oct 30, 2013)

Error factors, Superman complex, Demolition and Discovery agreements, hauling out the trash.

Estimating Blunders, Part 3

By Michael Stone – (Oct 23, 2013)

Know the inspectors required in your area and add an “inspector factor” to your estimates.

Estimating Blunders, Part 2

By Michael Stone – (Oct 16, 2013)

You have a choice in how you do your estimating. Some methods work well, but unfortunately, many don't.

Estimating Blunders

By Michael Stone – (Oct 9, 2013)

The purpose of an estimate is to price the job. If you want to be profitable, accuracy matters.

We Want To See Your Receipts

By Michael Stone – (Oct 2, 2013)

What if you agreed on a price, now customer wants all receipts for material? Without a clearly written fixed price contract, it's a problem waiting to happen.

Race to the Bottom, or “How Low Can I Price This Job?”

By Michael Stone – (Sep 25, 2013)

Cutting your price to get a job is a money losing approach. Over time, you won’t be making a profit and you’re only working yourself into debt.

Side Jobs in Construction

By Michael Stone – (Sep 18, 2013)

Have you ever had a client go behind your back and ask your employees and/or subcontractors to work for them outside your company?

Making it Work, Profitably

By Michael Stone – (Sep 11, 2013)

My clients are constantly chiseling me down, everyone makes money on the jobs except me.

RRP Rules in Practice – What You Told Us

By Michael Stone – (Sep 4, 2013)

The RRP rules were imposed by the EPA on firms performing work that disturbs lead-based paint. We were curious whether or not contractors were following the rules.

Keep Production Time Productive

By Michael Stone – (Aug 28, 2013)

It's time to discuss production issues on construction projects that are often overlooked. Because time wasted on a job comes right out of profit.

Link Salary to Production

By Michael Stone – (Aug 14, 2013)

When I was selling, I always sold on straight commission only. Pay should be based on performance. When you hire a salesperson, set ground rules that you both work under.

Employees – Three Details that Cost Money

By Michael Stone – (Aug 7, 2013)

You’re in business to provide a service and make a profit doing it. Three employee issues that cost your construction company money.

Adjusting Your Markup Based on the Job

By Michael Stone – (Jul 31, 2013)

Many contractors use a variable markup or margin to price jobs. They believe that in the construction industry you have to reduce the price to get the job.

A Poorly Written Contract Will Cost You Money

By Michael Stone – (Jul 24, 2013)

Too many contractors use a poorly-written construction contract, or no contract at all, leading to different interpretations of an issue.

Making Selections for Their Project

By Michael Stone – (Jul 17, 2013)

If you're a remodeling or new home contractor, how can you get clients to make their selections before you write the contract?  Make it easy for your client.

What’s the Right Contractor Salary?

By Michael Stone – (Jul 10, 2013)

If you’re a contractor, how much should you be paid to own and run your own construction company? How much should a construction company owner be paid as salary?

What’s the Average Price of . . . ?

By Michael Stone – (Jul 3, 2013)

What’s the average cost per square foot for a remodel? Average contractor markup? Average contractor fee? There is no average anything in construction, and here’s why.

You Can’t Make This Stuff Up!

By Michael Stone – (Jun 26, 2013)

We use Google Analytics on our website. It tells us how many visitors we’ve had and what brought them to our website.

As Rude or Opinionated as you can afford to be

By Michael Stone – (Jun 19, 2013)

You don’t want to lose business because of a comment that you post or email. Even if you think it’s hidden in a dark corner, it can cause a problem

It Isn’t Your Price. It’s You

By Michael Stone – (Jun 5, 2013)

Address their fears so they feel safe purchasing from you.

Pricing Jobs Right

By Michael Stone – (May 29, 2013)

Not charging enough for your work is the major reason construction companies fail. Here are some of the mistakes contractors make when pricing their jobs.

Specifics on Change Work Orders

By Michael Stone – (May 1, 2013)

Last week we discussed having signed Change Work Orders (or Additional Work Orders). Today we’ll discuss 4 mistakes often made when writing Change Work Orders.

Like breathing, being profitable isn’t an option

By Michael Stone – (Apr 10, 2013)

If your construction business isn’t profitable, it won’t survive. You have an option of being competitive in construction. You don’t have the option of being profitable.

Residential vs. Commercial Contractors

By Michael Stone – (Mar 28, 2013)

I’ve long suspected that commercial and residential contractors look at the construction industry differently, and this thread confirmed that suspicion.

Finding Opportunities

By Michael Stone – (Mar 20, 2013)

Brainstorm business opportunities that your construction company could do, profitably, over the next twelve months.

Every Little item

By Michael Stone – (Feb 20, 2013)

An example of what transparency does for your business. If clients want the details (i.e., itemization), then provide those details but charge for them.

Letter From an Architect

By Michael Stone – (Feb 13, 2013)

By providing background, Michael Beck helps us understand how the relationship between architects and contractors has developed over the years.

It’s Your Business

By Michael Stone – (Feb 6, 2013)

A contractor on the east coast was frustrated with how he was being treated by architects. For starters, they were requesting a list of all his subcontractors.

Take Charge of Your Company Name

By Michael Stone – (Jan 31, 2013)

Claim your business in local search sites and social media. Almost always free, only takes a minute, might bring in leads, and it will protect your name.

All that Glitters . . .

By Michael Stone – (Jan 23, 2013)

Is buying a construction business franchise a smart idea? The sales pitch is good, promising a proven method to run your business and a proven path to wealth.

Paying Yourself

By Michael Stone – (Jan 9, 2013)

You’re in business to provide a service and make a profit doing it. Having the financial info you need to make decisions is critical for your business success.

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