This one-hour presentation by Contractor Staffing Source explains how to find and hire employees for your construction business.
(Jun 2, 2021)
If you employ a salesperson to help you sell something, you need to pay them for their services. I am a firm believer in paying sales people by commission
(Jan 5, 2016)
I’m a strong proponent of thank you notes. We received a creative note from a contractor the other day.
(Oct 7, 2015)
If you’re trying to make a living in residential remodeling or specialty work, it’s important to know what the general public is being told about you.
(Jun 9, 2015)
Should you let a client furnish their own materials?
(Apr 14, 2015)
Use Lead Gen tactics to your advantage B …
(Jan 21, 2015)
I’ve long been an advocate for paying salespeople on straight commission. Not everyone agrees, not even all the experts, but in my experience straight commission is the best way to go.
(Jul 30, 2014)
There are lots of opinions on how to pay a salesperson. Your salespeople have to be able to make a good living and provide for their family.
(Dec 20, 2013)
If you missed our webinar earlier this week with Brian Javeline of MyOnlineToolbox.com, 15 Website Lead Ideas in 20 Minutes, the recording is available here.
(Sep 21, 2013)
A new business wants to market your construction business and provide leads. It'll also give homeowners ammunition making it harder to sell jobs. There’s an alternative.
(Sep 10, 2013)
Many of our website visitors aren’t contractors, they’re clients looking for help with a Cost Plus project gone wrong, or wondering if their contractor is overcharging.
(Jun 28, 2013)
General contractor licensing and surety bond requirements by state to help prepare for running a sound business.
(Jun 13, 2013)
Our newest six-hour class, based on the book “Markup & Profit, A Contractor’s Guide Revisited”, second hour, on markup and margin calculations.
(Jun 11, 2013)
Our newest six-hour class, based on the book “Markup & Profit, A Contractor’s Guide Revisited”, is now available. This clip is from the first part on financial requirements.
(May 3, 2013)
From time to time, you will go out to see a potential client about doing work for them and they’ll ask if they can choose their own subs for their job.
(Dec 12, 2012)
When you are looking for employees, your advertising should include the caveat that speaking, reading and writing English as a job requirement.
(Nov 14, 2012)
If you're an employer, these are things you should watch for and be prepared to deal with. If you're an employee, check to see how you're doing.
(Oct 31, 2012)
A construction magazine said half of their subscribers were in the path of a hurricane. How many of those contractors are taking advantage of the potential new business?
(Oct 30, 2012)
Don’t worry about what “the other guy” is charging.
(Oct 30, 2012)
Building a website for your small business doesn’t have to be expensive, and it isn’t that complicated when you understand how it works..
(Oct 20, 2012)
Employees, properly motivated, can generate a lot of new business for you.
(Oct 11, 2012)
As you’re walking out the door on a finished project, you want your clients to remember you as the company that went the extra step for them.
(Sep 28, 2012)
One of my coaching clients told me recently about a client who is quite affluent and apparently has been taken advantage of by several contractors over the years.
(Sep 25, 2012)
Do you have a potty-mouthed employee who is offending your clients, subs, suppliers and maybe even your other employees?
(Sep 17, 2012)
Cancellations happen, even with the best of salespeople. Clients have all kinds of reasons to cancel an agreement, and you need to be prepared.
(Sep 12, 2012)
Overhead creep is one of those subtle things that business owners often don’t notice. It leads to cash flow problems real quick.
(Aug 31, 2012)
You might not think of watermelons, but one of our clever coaching clients shared a method he’s used to attract new leads for his business.
(Aug 27, 2012)
I’ve talked about the need for a contract, and the importance of a clear payment schedule, because without a well-written, clear contract, you’re headed for trouble.
(Aug 22, 2012)
A good payment schedule keeps you paid for the work you are doing. If you're using a 1/3, 1/3 and 1/3 schedule, you are financing most of the job out of your pocket.
(Aug 13, 2012)
All too often in construction sales, the focus is on selling a job. Let's rethink that; sell the design agreement so you can do the work needed before the job starts.
(Jul 25, 2012)
Why would any serious construction-related business owner want to be the lowest bidder on a project? Let’s look at what that means.
(Jul 18, 2012)
When we talk about making money, it's rarely about big chunks of change. One overlooked item that costs money is rounding numbers. For instance, your markup.
(Jul 16, 2012)
In our book we talk about the ratio of employees to dollar volume of business. Many contractors ignore this ratio and get caught up in the urgency of building a job.
(Jul 11, 2012)
Contractors have cash flow problems for two major reasons: poor money management, and poor payment schedules.
(May 15, 2012)
A very nice gentleman called me last Friday. He related a story about his home remodeling project. It was done a Cost Plus job, the "plus" was negotiated at 18%.
(May 10, 2012)
For those who don’t understand the need for an ongoing marketing and advertising program for your business, let me try this analogy:
(Apr 9, 2012)
We’ve noticed the same problem that we’ve seen with other specialties. They believe that because their work is focused on one thing, their business operates differently.
(Mar 15, 2012)
A friend called today with a problem. He subbed his work to a general contractor from the east coast to do a job here on the west coast at a government facility.
(Mar 1, 2012)
Transparency, as I understand it, is opening your books to your potential clients and showing them all the numbers pertaining to a job you are quoting.
(Jan 23, 2012)
If you aren’t getting a response to your advertising, either printed or on the web, you aren’t connecting with your potential clients. You must connect with them.
(Oct 25, 2011)
We are approaching the time of year when the subject of bonuses comes up. Your employees might be saying, “Do you suppose they will pay us a Christmas Bonus this year?”
(Oct 20, 2011)
I talk with contractors all the time who miss one opportunity after another and never seem to connect the cost of this miss.
(Oct 17, 2011)
Now, if you are a subcontractor, it doesn't matter what trade, if a general contractor has hired you to work on a job your obligation is to that general contractor only.
(Oct 6, 2011)
The final item on our list of things you can do to assure positive cash flow is to avoid debt. If you are in debt, set the goal of becoming debt-free.
(Oct 4, 2011)
Far too often when contractors come to us for help they are behind paying one or more of their taxes. Don’t let this happen to you.
(Sep 29, 2011)
It's important to set goals for your business. It's also important to track, on a month by month basis, how close your actual finances are to those goals.
(Sep 22, 2011)
In order to have a positive cash flow, it helps to know what your cash needs are today, in six months, and a year from now.
(Sep 20, 2011)
If you find yourself struggling to make payroll, there could be a lot of things wrong and one of them might be that you have too many people on that payroll.
(Sep 13, 2011)
If you want positive cash flow in your construction business, make sure you're using the right payment schedule on your contracts.
(Sep 8, 2011)
If you forget to include the cost of insulation, you’ll be paying for it out of your own pocket.
(Aug 25, 2011)
Are you getting the most out of your day? Are you taking advantage of your time here, to do your best, both for yourself and your family?
(Aug 5, 2011)
Last weekend I passed a billboard on the side of the road. It loudly declared, "We will build your new home for $32 a square foot."
(Jul 1, 2011)
I read an article where the author talked about passing savings on to clients. This sounds well and good, but place it low on your priorities when putting a job together.
(Jun 10, 2011)
If you’ve raised kids in the past 20-30 years, you know the new rules – no one loses, everyone gets a prize. Don’t keep score because it hurts their feelings.
(May 31, 2011)
Construction (with the exception of new homes) is a service business. Your focus can't be on putting pieces together to build a job, it has to be on your clients.
(May 16, 2011)
Invoicing is one way clients delay paying. "Thanks for doing that work, send me an invoice, okay?" Why do contractors agree? Maybe they believe everyone does it.
(Apr 13, 2011)
A reader recently sent in a note asking for my input on this statement that a government agency attached to a "bid package" for work they want done.
(Mar 15, 2011)
A specialty contractor said, "A general contractor called and asked me to send a lien release. If I do that, he will send a check for what he owes me."
(Mar 1, 2011)
Often when I talk with contractors, I hear, "I want to grow my company so I can make more money." Consider this, if size mattered, dinosaurs would still be here.
(Feb 24, 2011)
I wrote a Blog post for another company recently stating that I didn't think it very smart to negotiate the price of your work. A reader agreed with me and said:
(Feb 15, 2011)
Someone asked the other day about sending cards or notes to old clients. They wanted to know what could be said that would be of interest to the client.
(Dec 14, 2010)
This potential client had a house built using the “lowest bid” contractor. The builder cut corners, leaving out little details like collar ties on the roof rafters.
(Nov 23, 2010)
The next time anyone, including yourself, wants to complain about how much money you make, think about this quote from Henry Ford.
(Oct 15, 2010)
We are rapidly approaching the time of year when you should review and update your employee manual.
(Sep 23, 2010)
On a personal note, I received an email Tuesday morning from the wife of my high school coach.
(Sep 21, 2010)
I heard about a scam a local building owner is pulling on his subs. He has several properties and is apparently worth a considerable sum.
(Sep 15, 2010)
There are four basic ways to charge for construction services. These are fixed fee or lump sum pricing, Time & Material pricing, Cost Plus, and using an hourly rate.
(Aug 23, 2010)
Someone asked me recently if I thought a salesperson for a construction-related company should help provide leads, and how many. Yes, they should help provide leads.
(Aug 10, 2010)
Most contractors I talk to believe their neck of the woods is different. They believe their clients are more difficult to sell to than anywhere else in the country.
(Jul 20, 2010)
The old law said that the owner could recover 100% of the money they had paid a contractor if it was found that the contractor did not have a valid license.
(Jul 16, 2010)
A contractor friend just went through an IRS audit. After going through all his records and asking a ton of questions, they said, "In my opinion, you owe us $22,000."
(Jul 8, 2010)
A homeowner commented on a forum. He’d been told to add $3 – $5K to a job just to cover the extras that will come up. He was under the impression this is normal.
(Jun 29, 2010)
A friend was doing an insurance job, repairs to an exterior wall. The siding had been improperly installed, and around here, if you don't keep water out you'll see rot.
(Jun 9, 2010)
We receive newsletters every week from construction-related companies around the US and Canada. We applaud all of you using a newsletter as a communication tool.
(Jun 3, 2010)
I was working as a salesperson for a fairly well run remodeling company. I went on a sales call to the home of a CPA that I’d know for some years.
(May 27, 2010)
He expected to make "millions". He wanted me to teach him how to do estimating "easily". That, he claimed was the only thing that he didn't know about this business.
(May 7, 2010)
One of the topics was business cards, we spent several minutes reviewing the value of a business card and how it can help promote your company.
(Mar 18, 2010)
We had a question come in this week from a contractor asking about how to calculate the volume of business a company needs to support the owner’s salary.
(Feb 17, 2010)
Does a job have a “life expectancy”? I believe it does and you should be aware of the warning signs.
(Jan 19, 2010)
Do you wonder if the book, Markup & Profit; A Contractor’s Guide can help your business, even in today’s economy? Check out a note we received earlier this month.
(Jan 14, 2010)
I’ve talked about focusing your attention on the 1, 2, or maybe 3 things you do well and make the most profit on. Doing a good job of advertising and promoting those.
(Jan 5, 2010)
Business Interruption Insurance is among the least understood and often most poorly written coverage.
(Dec 28, 2009)
She got a call from a guy about cleaning 300 feet of his driveway. When she told him her minimum trip charge ($300), she heard the famous, "Your rates are too high!"
(Oct 16, 2009)
A marketing idea for your business: pumpkins.
(Sep 22, 2009)
You need to start planning your advertising to potential clients that you are available to install and take down Christmas lights and decorations.
(Sep 3, 2009)
I was reminded again recently of the need for in-house training on what it takes to pay the bills in a construction related company.
(Aug 11, 2009)
Devon calls me a pack rat, which is unfair – I’m just a collector.
(Jul 21, 2009)
In the book Profitable Sales, I talk about a steep bank along the Oregon Coast. I’ve been asked if it really exists – well, gang, I was there again two weeks ago.
(Jul 16, 2009)
In case you don’t think it’s important to have change work orders signed and paid BEFORE making a change, read this note I received from a homeowner yesterday:
(Jul 9, 2009)
When people lose their jobs, many decide to start their own business
(Jul 8, 2009)
Bidding work just to keep busy and keep employees working is financial suicide.
(Jun 29, 2009)
Someone once said, “No man’s business is safe while the legislature is in session.” Here is another example.
(Jun 26, 2009)
Have you thought about the image you project? It's important to create an association between what you provide and what your potential client wants or needs.
(Jun 9, 2009)
Many old timers in this business will tell you to be slow to hire and quick to fire. That is just the opposite of what too many construction-related businesses do.
(May 28, 2009)
During a recent survey, comments were made about price fixing. They referenced the Sherman Antitrust Act and association warnings about the appearance of price fixing.
(May 22, 2009)
I don’t know much about their company, but I do know they understand communication with their customers and all those they do business with.
(May 21, 2009)
If you read the two previous blog posts you know markup and gross margin. Today we'll look at one of the major mistakes made when calculating the sales price.
(May 21, 2009)
Yesterday markup – today gross margin. Let's look at using your gross margin to calculate the correct sales price for your work.
(May 19, 2009)
There’s a lot of confusion over using markup vs margin to price jobs.
(Apr 23, 2009)
An association exec said, "Many associations are now struggling to get through the recession, and losing members and sponsorships."
(Apr 21, 2009)
Do your work. He would go on to explain the meaning of that phrase and part is if you do something, do it right. Don't cut corners, don't do it good enough, do it right.
(Apr 14, 2009)
A young couple came to us for coaching in February, just two months ago. While their P & L was not all that bad they could and wanted to do better.
(Apr 13, 2009)
I’ve heard any number of people say they are going to build their business up, then sell it. Let’s talk a bit of reality.
(Apr 4, 2009)
Michael takes a minute to talk about the value of making a profit. (video)
(Mar 25, 2009)
I took a call from a married contractor with four young children. He can’t collect the final funds due from an owner for a large job. They are about to lose everything.
(Mar 4, 2009)
We recently heard from a company that took over a $200,000 hit (spread over several jobs) because of actions the job superintendent took.
(Jan 23, 2009)
The housing economy leaves a little to be desired. Don't count on the government to solve that problem. We have to take responsibility for and solve it ourselves.
(Jan 19, 2009)
This quote from Jim Rohn is particularly true for construction business owners. There are a lot of things that need to be done and we need the discipline to do them.
(Nov 21, 2008)
A question came about moonlighting employees. This is an ongoing issue for construction business owners.
(Nov 13, 2008)
If a company offers no sick pay or vacation pay…but is about to start – which is more important to offer first, anticipating that the next year we can offer the other?
(Oct 28, 2008)
I’m frequently asked for the “industry standard” rate per hour for various types of work. There isn’t an industry standard markup, and there isn’t an industry standard hourly labor rate.
(Oct 9, 2008)
We keep hearing from contractors who say they "Work Only By Referral". They believe this elevates them and their company above everyone else in this business.
(Sep 30, 2008)
During a presidential debate, one of the …
(Aug 7, 2008)
An earlier post of ours is getting a few homeowners riled up. The post discusses homeowners who have contacted us, unhappy about the prices their contractor is charging.
(Aug 5, 2008)
Why would you choose someone that has chosen to work without a business license for 30 years?
(Jul 15, 2008)
Had a two-part question from one of our …
(Jul 1, 2008)
Earlier this year I had the opportunity to interview with Brian Javeline for The Contractor Show. Our episode was just posted.
(Jun 12, 2008)
The truth is, no contractor can survive on 10% overhead and 10% profit.
(May 29, 2008)
Are you an LLC? S-Corp? C-Corp? Does it matter?
(May 16, 2008)
One of our goals is to improve the image …
(May 10, 2008)
If being a lawyer is just like any other job, why do so many people regard it as a better career than that of a tradesperson like an electrician, carpenter or plumber?
(May 7, 2008)
All of the industries that we work with share one thing in common: they employ tradespeople . . . But there’s a problem: there’s not enough of you to go around.
(Apr 15, 2008)
The ancient Chinese philosopher Confucius said, "The man who chases two rabbits catches neither."
(Mar 29, 2008)
Got a phone call recently from a contractor doing a job in the $150K range. Everything is fine, contract signed, and the job is going great.
(Mar 18, 2008)
The contractor presented a design agreement with a $3,000 fee to design the job, 1/2 of the fee would be credited back when a contract was signed for the final job.
(Feb 28, 2008)
In the last month I’ve heard from more specialty contractors having problems being paid by generals than I’ve heard in years.
(Feb 26, 2008)
I read an article telling general and specialty contractors to give itemized estimates. Oh joy. It talks about goodwill, trust, comparing estimates, and other tripe.
(Feb 20, 2008)
I have read several posts on forums late …
(Jan 17, 2008)
There is no way on God’s green earth I could pretend there aren’t unethical contractors.
(Jan 7, 2008)
A young lady told me her husband is using a variable markup on jobs. He marks up labor 3 or 3.5 times and materials 1.5 times. He adds 10% to subcontractor quotes …
(Jan 5, 2008)
I often hear from contractors having problems with their customers. Many of these problems are because of the written contract they use for their jobs.
(Jan 3, 2008)
A client decided to change the rules of their contract. She decided not to pay the full amount or on time as the contract specified.
(Jul 23, 2007)
I am serving as an expert witness this week for a new home builder in our area. There are many issues in this particular case, but there is one overriding problem.
(Jul 7, 2007)
I was reminded again this week by a dear friend who is an expert in the use of QuickBooks of the necessary care that needs to be taken when you set up your accounting.
(Jul 6, 2007)
While working on a new residential walkway project last week, we were confronted with an irate neighbor. The crew had just begun using a jack hammer and concrete saw…
(Jun 9, 2007)
“I was wondering if you had any advice for contractors when approached about a franchise opportunity.”
(May 12, 2007)
My biggest challenge as a residential remodeler is obtaining and keeping qualified and experienced sub-contractors willing to do smaller type projects.
(Apr 14, 2007)
I was asked for information on the diffe …
(Mar 3, 2007)
If you are in business, you are in sales. No rationalizing, you are in sales. If you don’t sell something at a profit, you are going to go away.
(Feb 22, 2007)
A question arose this morning on a call from a contractor. Should you write a contract on all the jobs you do, regardless of the size of the job?
(Feb 3, 2007)
If you’ve been in construction sales very long, you’ve met potential customers who ask for an estimate, but after a lot of work you learn they were just shopping.
(Feb 3, 2007)
Knowing your cost per lead is important because it helps set your sales goals and advertising budget.
(Jan 23, 2007)
At a recent class, I was covering the basics of getting paid for additional work orders. I gave an example to emphasize the necessity of getting paid for your work.
(Jan 17, 2007)
Adding overhead and profit to job costs to calculate sales price is a mistake. Contractors should use a markup calculated for their construction business.
(Dec 11, 2006)
Question came from a friend the other day. He said, "Michael, how do you determine whether someone in construction has a business or a hobby?"
(Nov 15, 2006)
We have had two e-mails in the past week from homeowners asking about the “Industry Standard” for pricing, wondering if their contractor is overcharging them.
(Oct 19, 2006)
A young businessman called. He was in a state of shock after checking his books over the weekend and found over $11,000 in receivables, much of it over 30 days.
(Aug 30, 2006)
If you are tired of starving because you have enough work but don’t have the money to pay your bills, heed these words.
(Aug 21, 2006)
A coaching client was working with a potential customer who wanted a remodeling job on a cost plus basis instead of a fixed fee contract.
(Aug 9, 2006)
At the start of break, the crew jumped in a truck, drove 15 minutes to a doughnut shop, had coffee and a doughnut or two, drove 15 minutes back to the job site.
(Aug 2, 2006)
One of our clients called with cash flow problems. Leads were coming in, sales and production was good, correct number of employees for the volume of work, but no money.
(Jul 18, 2006)
I talked with a young guy the other day who called about our coaching service. His company was upside down and I could tell he was hurting.
(Jul 6, 2006)
If your employees consistently take longer than you estimated, you need to change your method of estimating. The human body can only work so fast.
(May 12, 2006)
After working with a few hundred coaching clients, I believe that the key to profitability in construction is staying focused on doing a few things well.
(Apr 27, 2006)
Respect your time – get paid for the work you do.
(Apr 26, 2006)
Design agreements, letters of intent – get paid for written quotes.
(Apr 18, 2006)
Just a quick reminder. Be sure to put a limit on the length of time your proposals are valid. That time should be a maximum of 3 working days, no more.
(Apr 17, 2006)
In a recent class, I made the statement that referral leads should never account for more than 20% to 25% of your work. Boom, the argument was on.
(Apr 10, 2006)
Time for a quick review of some terms: gross profit, net profit, owner’s salary, owner’s wages. Owner’s salary is overhead, owner’s wages are a job cost.
(Apr 5, 2006)
During a recent class I taught, it was clear many in the audience didn’t understand that their sales volume must be enough to support the salary of the company owner.
(Mar 17, 2006)
We keep hearing complaints about sub-contractors that don't show up on time, if at all. You need to take the time to explain the importance of being on time.
(Mar 14, 2006)
Today websites are becoming a must as the customers who have money to spend are doing so by way of the Internet.
(Feb 24, 2006)
I was recently involved as an expert witness for a contractor who wasn’t getting paid for work completed. The hardest part will be proving actual expenses for the job.
(Feb 14, 2006)
The most profitable construction company today is a husband/wife combination with one other person either supervising the construction or selling for the company.
(Feb 1, 2006)
Do you rent or buy your tools or equipment? Here is a quick and dirty rule to follow. Don’t tie up money in tools and equipment that seldom gets used.
(Jan 4, 2006)
I’ve talked to numerous construction company owners recently who are having problems with scheduling, getting jobs done, getting the right people to the right jobs, etc.
(Nov 9, 2005)
A recent note said, "The client wants to furnish all the materials. They are going to give me the money to go buy the materials, should I add my markup on the materials?"
(Sep 9, 2005)
As a relatively new contractor, how do I win over prospects that are “looking for quotes” – homeowners who are “getting three bids” for their construction project
(Aug 21, 2005)
This morning, on my own home, I remembered what it's like to find surprises on a construction project, like a water line that runs from I don't know where to I don't know where.
(Aug 17, 2005)
“I’m a contractor and underbid a house. I’m almost done and just figured that out. I can’t afford this loss. What can I do besides bankruptcy?”