Cash flow in construction is no different than any other business. There must be more cash flowing in than flowing out or the business won’t survive.
As business owners, we need to keep an eye on what’s going on with the economy because it should influence our business decisions.
Overhead creep is one of those subtle things that business owners often don’t notice. It leads to cash flow problems real quick.
When business relationships are in writing, there are fewer problems. A customized employee manual and subcontractor manual is important.
I often hear from someone lamenting about an employee. They got in a hurry to hire and now they are paying for it.
To become successful and build your business, you want to be known as the expert at the type of job that provides the highest profit margins.
Too many sales people fail to give options, then wonder why they hear “your price is too high” or “we want to think about it” to keep from making a decision.
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.
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.
Is the customer always right? Hardly. But clients should never feel they’re being taken advantage of or they’re wrong on some issue.
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.
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.
The top two complaints about contractors are that they don't return their phone calls and they show up late (if at all) for appointments.
If the next person you see wants to spend a few hundred thousand on a remodel, would they trust you to do the job? Like it or not, it will depend on first impressions.
If you want a successful, profitable business, you need to spend a majority of your time on profitable sales. That’s easy to forget.
Why would any serious construction-related business owner want to be the lowest bidder on a project? Let’s look at what that means.
Over the years, I’ve learned that too many contractors determine their job price by borrowing someone else’s numbers. That can be an expensive mistake.
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.
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.
Contractors have cash flow problems for two major reasons: poor money management, and poor payment schedules.
When I'm consulting, I interview key staff to get a feel for the company. More often than not, I hear certain things are "Not my job" or "Not my responsibility".
Too many business owners believe they are in business to provide jobs for other people. It's a laudable goal for a business owner. But it's not the purpose of business.
Have you considered lending a hand to those who need it? There are many potential avenues to choose, but look at a few that might bring you some new business.
Develop your speaking skills. And the best way to do that is to volunteer to speak to groups and share your knowledge of construction related issues.
Ever notice the amount of new information that shows up each day? It is unbelievable how much is available to us now. How do you stay on top of it?
Construction isn't an easy business. If you are in it and running something besides a pick or a shovel, then you are probably a little smarter than the average bear.
Every day, set your focus. Spend time every day, maybe 10 to 20 minutes, to review both your personal and business goals and plan what's most important.
If you shoot rifles or handguns, or maybe you're an archer or just a peashooter, you know it's hard to hit a target you can't see. The same applies to your business.