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?”
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.
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.
Michael Stone offers suggestions on how to keep your construction business strong during this Coronavirus emergency.
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.
Constant input from others is necessary if you want to stay on top of both your business and your personal life.
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.
Business planning isn’t exciting. But the effort you put into it has much to do with the results you’ll see next year and in years to come.
This is part two of our year-end planning paper. We’re going to pick this up by continuing an indepth look at your overhead budget for the coming year.
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.”
It’s the last Wednesday of the summer, which is a great time to look back and see how your business fared.
If you own a business, your illness or death will create business problems for your families and your employees.
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.
Some time back we received a well-written letter about liability insurance from a contractor in Washington state.
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.
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?
It’s the beginning of the fourth quarter and I’d like to address a few different issues that seem pertinent right now. The most important one is to remember that things aren’t always good.
As we head into Memorial Day weekend, we want to share an upbeat note we received in April from a client.
We received a note from a contractor asking if what we talk about applies to his business.
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.
I’m a strong supporter of reviewing where your business has been and where you want it to go. Last week I discussed that subject with a friend I met over seventeen years ago.
I follow Barbara Pachter, a speaker, author, and coach, who writes regularly on business-related topics, especially those related to business etiquette and communication. We requested and received permission to reprint one of her recent blog posts here.
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.
If you’re doing a good job of marketing your company, how do you plan for and manage growth when it shows up?
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.
Not all of your clients are honest. There are even a few who have no intention of paying you for the work you do.
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.
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.
How well you manage your money when business is good impacts how easily you’ll survive when business is tough.
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.
In the beginning you had ambition and energy. Then reality set in.
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.
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.
In a systems company, the customer is someone you deal with when you run out of other things to do.
When things are good, it’s smart to ask yourself a critical question: Are you prepared for the next downturn?
Goals are a target, and if I start falling short, I either figure out why and fix it, or adjust the target to match reality.
Delegating is a scary word for most of us. We don’t believe that anyone can do a job as well as we can.
Our goal is to help construction business owners build successful, profitable businesses. We want them to succeed, but we want them to do it right. A recent note from a homeowner is a shocking example of a business we’d like to see fail.
A young fellow recently asked about his hourly wage.
We’re a third of the way through the year. It’s a good time to review some of the basic things you need to do to run a financially successful construction-related business.
It can help to separate yourself by doing things right. But you're a business owner. It's what's expected. The flakes are the ones who are different.
The services offered by construction businesses are in high demand right now. Can we look at this industry from another viewpoint?
Last week we discussed knowing where you stand financially, whether you are making money, losing money, or breaking even. What now?
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.
It’s the season to go shopping, and some lower life forms (also known as scumbags) are doing their shopping on jobsites when no one else is around. Protect your business.
Today we’re going to talk about succeeding. We’re big football fans. Our local high school football team is 8-0 this year. Our favorite college team is 7-0
There are lots of get rich quick schemes there. Spend $2 and get rich beyond your dreams. What are the odds? The same as making money in business without being focused.
You’re in business to provide a service and make a profit doing it. Three employee issues that cost your construction company money.
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?
General contractor licensing and surety bond requirements by state to help prepare for running a sound business.
We use Google Analytics on our website. It tells us how many visitors we’ve had and what brought them to our website.
Warning signs of financial trouble in a construction business. Michael Stone discusses eight signs of trouble for contractors.
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.
Michael Stone discusses why contractors go out of business, the correct formula for markup, charging for change orders, employees and cash flow, and payment schedules.
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.
It’s been awhile, hasn’t it? We neglected our blog while our website was being remodeled and our newsletter revamped. It’s time to get back at it.
4 short videos by Michael Stone, “The reason you are in business” “Using an Accurate Markup” ”Accurate Estimates” and “Getting Paid on Time”.
Ten Cardinal Rules for residential construction sales.
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.
Don’t worry about what “the other guy” is charging.
Guidelines to a more successful construction-related business.
Ten Cardinal Rules for a successful construction-related business.
Many contractors believing building “quality” helps them sell jobs and make more money. But how do you define quality? Who sets the standard?
I saw a post from a guy who was about to move his family. His construction business has no work and he believes the answer is to move to a new location.
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.
I got a note from a young guy the other day that was priceless. The short version said that he had finally come to realize what he was worth to his clients.
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.
While exercising the other day, I watched a code compliance violation hearing on one of the local TV stations. It's a station that shows local city government meetings.
If you have salespeople, their job is to bring in profitable work. If you are paying them anything other than straight commission, where is the motivation to sell?
A building inspector in a city in Ontario, Canada has gone out of his way to tell two different home owners that their contractor is charging too much for his work.
It’s my opinion, that being late is almost always a habit. If you have employees who are perpetually late, you have to decide how much you want to put up with.
I talk with contractors all the time who miss one opportunity after another and never seem to connect the cost of this miss.
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.
I spoke with a friend the other day about his work with a well-known promotional company. He'd been hired to help bring in and manage new business.
He asked a sub for a quote on a job, and it was higher than expected based on past jobs. When he asked, the response was, "Well, I just wanted to see if it would stick".
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.
One of our clients called from one of the towns along the Missouri River. He wanted info on how to do the cleanup and rehabilitation of homes along the river.
I've talked before about not trying to be all things to all people. There is just too much that a contractor needs to do to be able to wear all the hats in the company.
I read an article by a practicing attorney dealing with pay when paid (or pay if paid) clauses in contracts, specifically between general contractors and subcontractors.
Too many construction company owners don’t pay themselves for their work. It’s nice to have a hobby, but it’s not why you are in business. Pay yourself for your work.
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.
Today, with email and the internet, we have nearly instant communication. But there is a down side to this rapid give and take, and that is miscommunication.
A friend told me about an incident he witnessed at a trade association meeting. A supplier sponsored a dinner, and with that had the opportunity to make a presentation.
Wandering through construction forums, I've recently read posts commenting on the markup that sales people should be allowed to use.
The next time anyone, including yourself, wants to complain about how much money you make, think about this quote from Henry Ford.
I read an article in Entrepreneur Magazine titled “Freelance Nation”. The author discusses the proper tax handling of subcontractors versus employees.
In my light reading of women's and home and garden magazines I have repeatedly noted articles that encourage beating your contractor down on price.
"The key to successful leadership today is influence, not authority." The dictatorial manager won't get the results they want by bullying or badgering.
How do you grow from a small, one-man firm to a larger firm? That was a question asked by a respondent to our recent survey.
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.
Like you, I'm always busy building or fixing something at home. Where I buy supplies has changed over the last year.
Brian Tracy had a great quote today from Comedian Bill Cosby, "I don't know the key to success, but the key to failure is trying to please everybody."
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.
We have had some bad storms this year and some of you may be tempted to do casualty repair work (insurance work) if and when you get those calls.
I heard an interesting account over the weekend about a friend who owed business taxes to the IRS. They’d gotten behind and the IRS was trying to collect the money due.
I was looking through the November issue of Remodeling magazine the other day and was reminded what a great tool the Cost vs. Value report is.
Do you have projects in and around the o …
In a recent note from Brian Tracy, he quoted a fellow by the name of Robert Ringer. Ringer said, “The future belongs to those who possess certain knowledge.”
For many, business is picking up. Now let me ask – how are your office practices and procedures? Is your office and staff ready for the upturn in business?
One thing you need to decide each year is how much salary you will pay yourself.
You need to start planning your advertising to potential clients that you are available to install and take down Christmas lights and decorations.
A follow-up on the earlier blog post about photos of jobs – this is important for all jobs, even (especially?) handyman work, insurance repair and/or restoration work.
I was reminded again last week of the value in taking a good set of pictures on the jobs you do.
For those of you who would like to expand your business, I saw an interesting ad in a magazine the other day.
When people lose their jobs, many decide to start their own business
I’ve had many calls over the last two weeks from contractors who have few or no projects working and are on the brink of bankruptcy.
The success of your business is going to depend a lot on your priorities. Where is your focus?
An association exec said, "Many associations are now struggling to get through the recession, and losing members and sponsorships."
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.
Several contractors have told me lately they are having serious cash flow issues, often having to borrow money to pay bills.
“When you do the things you have to do when you have to do them, the day will come when you can do the things you want to do when you want to do them.”
We recently heard from a company that took over a $200,000 hit (spread over several jobs) because of actions the job superintendent took.
Often I’ll hear a caller tell me they are borrowing money to pay bills. This is a great big RED warning flag that your business is in serious financial trouble.
Several contractors have told me that customers are asking them to carry the contracts for their job(s).
We encourage every coaching client to stop using credit cards. Cut them up, throw them away, call the company, cancel the accounts.
One of our coaching clients told me recently that his crews are working four 10-hour days but his production numbers are off.
A question I hear all too often is, "Why should I help educate my competition? I'd rather they went out of business so I got the work."
The two deadly "I's" in construction: Inventory and Invoicing.
Got a call from a contractor with a legal problem. He got involved with a homeowner who kept adding to a job, then decided the price was too high and they aren’t paying.
Many contractors are experiencing a lower dollar volume of business. That means less money coming in the door to pay overhead.
I have to ask. What bad economy?
Why would you choose someone that has chosen to work without a business license for 30 years?
When your employees tell you they want t …
Had a two-part question from one of our …
If you suspect you are having financial problems, you probably are. If you wait, it will be harder to fix.
Earlier this year I had the opportunity to interview with Brian Javeline for The Contractor Show. Our episode was just posted.
Recently I've been made painfully aware of a problem some contractors. That problem is focusing on themselves and their business, instead of the customer.
A contractor recently told me he takes leads from anyone who calls. He qualifies them before riding off to rescue or repair, but he’s willing to look at most jobs.
Alfred E. Neuman used to say, “What, me …
Quick question here: Has anyone been using a reward/penalty system in dealing with other contractors on your job sites?
As a contractor, you need to know that the homeowner is both able and willing to pay for the work being done.
In the last few days, I have had a number of new homebuilders call and ask about switching their business to remodeling. “Can we do it?”
My insurance agent met with Tammy and I last week and made a proposal to sell us an installation floater with our insurance policy. I have never heard of it before.
In the last month I’ve heard from more specialty contractors having problems being paid by generals than I’ve heard in years.
I have talked at length about the housin …
I’m not sure if this topic has ever been approached, but something everyone should keep in mind. Be sure you know what you’re paying for and why.
A contractor called recently with a question about a homeowner complaint that some of their liquor has been stolen (just the liquor – the bottle was left behind).
If you are a general contractor, talk with your subs about work they are doing away from your jobs. Ask them to hand your business card and flyer to all their clients.
I believe a majority of the conflicts I …
When I ask clients to take a hard look at their company, the first thing I usually hear is how their employees are doing. That's usually not the problem.
“I was wondering if you had any advice for contractors when approached about a franchise opportunity.”
My biggest challenge as a residential remodeler is obtaining and keeping qualified and experienced sub-contractors willing to do smaller type projects.
This business is not about what you “like” to do. Nor is it about refining building techniques. This business is about making money.
I was asked for information on the diffe …
Successful construction contractors do more than their duty – they go the extra mile for their specialty contractors, their customers, their construction employees.
We recently received this note. He seems to be a nice chap, and we exchanged a comment or two. He discusses the world of commercial and industrial construction work.
Knowing your cost per lead is important because it helps set your sales goals and advertising budget.
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?"
With material prices, employee issues, bad weather, a flat tire or two, we sometimes wonder if it is all worth it.
With the tightening up of construction, …
A long-time friend and coaching client received a letter from a young plumber just getting started, mailed to local general contractors hoping to obtain business.
I was in Minneapolis last week at the JLC Live show. At the airport, I picked up my bag, went to the Super Shuttle desk and caught a ride to the hotel. It cost $15.
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.
Want a little secret? Working longer hours is not the answer. Working harder is not the answer. The only thing working longer or harder ever got anyone is tired.
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.
A caller asked the best way to buy insurance. My response was that if you have a choice, I would choose a broker rather than an agent.
Every once in a while I get a call from somebody about to do something crazy. They want to start a partnership. The worst ship that ever sailed is a partnership.
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.
There are eight warning signs of financial problems in your company. Warning signs, loud and clear, that there is something wrong on the financial side of your business.
An association exec told me that several months ago he tried to get association members to submit bids for long term contracts at a local military base.
I spoke today with an attorney representing a contractor who performed a major remodeling project for another attorney. The homeowner (attorney) fired the contractor.