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.
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.
If you thought you were the captain of your ship, 2020 taught otherwise.
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.
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 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.
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.
We want to see contractors build stronger businesses and in the process improve the reputation of our industry.
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.
The topic is uncomfortable but if you’re involved in residential sales, you’ll see family disagreements. It helps to know what to do.
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.
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.
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.
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.
Cancellations happen, even with the best of salespeople. Clients have all kinds of reasons to cancel an agreement, and you need to be prepared.
One of our coaching clients has been fortunate to do work for some very well known people. We discussed using that information when he promotes his business.
During class, a question came up on how to deal with contractors who let their insurance and sometimes even their licenses expire. "How do you compete with that?"
Here is another example of a client taking charge, I received this one last week. After a nice brief conversation, I asked the potential client to email me his address.
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?”
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.
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 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.
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.
I'll bet you have a computer in your home – maybe even a few computers. So do most of your clients.
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.
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.
A buddy has been working with a potential client for a couple of months and is rapidly reaching the point where he’s ready to send them to the competition.
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.
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."
He had made a proposal to a group and they were asking him to come back to yet another meeting and explain again what he was going to do.
Earlier I posted a question asking what you would do if a customer called and didn't want to pay the sales commission on a job. I asked for your thoughts.
They want to know how to deal with owners who come to them 60%, 70% or 80% of the way through a job and announce they want to re-negotiate the price of the contract.
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.
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.
Business Interruption Insurance is among the least understood and often most poorly written coverage.
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.
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.
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.
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.
Got a note in from a landscape contractor wondering how to deal with folks that talk with each other, spreading rumors that he is high priced.
I have read several posts on forums late …
There is no way on God’s green earth I could pretend there aren’t unethical contractors.
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).
It was another situation of a homeowner waiting until the job was almost complete, then start playing the "we are not going to pay you because blah, blah, blah."
Recently several of our coaching clients have related that their potential customers don’t want building permits pulled on their jobs. Don’t go there gang. Bad plan.
A coaching client related how one of his customers arbitrarily decided to change the payment schedule that was clearly written on the contract.
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.
I have had several discussions of late with contractors who can't accept that they should sell quality, value and service instead of trying to play the low price game.
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.
Devon and I were at an association social recently and had a great time. I spent time with a banker who works with many remodeling companies around the area.
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.
I talked recently with a few contractors who told me they are paying for personal stuff out of the company checkbook.
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.
The company that sent us this note asked that their name not be used for fear of reprisal by the bureaucrats they know in the state.
One of our coaching clients called and asked, “My customer has requested an itemized bid so that they can compare bids between contractors. How do I handle it?”
As I get older I realize even more that how you treat others matters. Mom was right.
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.
If you are a general, and you want good subs, treat them well.
I spoke today with an attorney representing a contractor who performed a major remodeling project for another attorney. The homeowner (attorney) fired the contractor.
“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?”