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Building A Dream Business

A Proposed Change Order for a Construction Project is as Important as a Proposal

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If So Many Issues Come from Not Doing Change Orders, Why Are They Not Done?

A Proposed Change Order is another very important tool that should be in the business toolbox of every construction company. However, it’s probably used less than almost any other business tool. Its lack of use causes as many, or even more, problems than any other tool.

If it’s that important, why is it not used?

We’ve discussed multiple times the reasons for doing Proposals for construction projects and the importance of communication with construction customers.

Proposed Change Orders are just as important.

If Proposed Change Orders are so important why are the done less?

The main reason for paperwork not being done is time. Time is the one thing that there is a limited amount of. There is more of everything else in construction. We can look for and find more help, job materials, money, etc. But, no matter how hard we look we can never get more time.

This time limitation is the main reason paperwork isn’t done. It’s easy to see the direct connection between production and revenue. Paperwork…not so much.

Doing a proposal or estimate is done before any construction agreement is made.  This has a direct connection to the cash flow and increases time being spent on them. If we don’t have construction work to do, we don’t get paid.

After the project is started though, our focus shifts to the construction of the project. From that point forward paperwork takes a back seat on the priority bus.

Like any tool…it costs more money if you don’t use it.

I was speaking with my mechanic earlier this week and he told me a story about a contractor that he knew, that took a $15,000 hit on a job because he neglected to provide the customer with a Change Order.

The contractor and customer agreed on the work that was to be done and a price of $20,000. While the contractor was working on the project, the customer asked for some additional work to be done. The contractor did the extra work.

When finished the contractor gave the customer a invoice for $35,000. The customer was furious and would not pay the additional $15,000.

Not communicating with the customer before the work was done cost the contractor $15,000.

Spending the time to do a Proposed Change Order would have been worth it.

A Proposed Change Order is like a proposal…it lets the customer know what to expect. It gives both the contractor and the customer clear expectations before costing either.

In my forty plus years in construction I have witnessed this story happen too many times.

In addition to the time needed to do a Proposed Change Order another reason for them not being done is simply not having a process in place for doing them.

This is common in the construction industry. Most people running construction companies were taught construction…not paperwork.

It doesn’t have to be this way.

That’s why we’re in the process filling up a Business BUILDing Toolbox with ready to use templates, fill-in-the-blank worksheets, instructions, and examples of:

  • Proposals
  • Contracts
  • Change Orders
  • Payment Applications
  • Profit Comparisons
  • Job Cost
  • Six-week Cash Flow
  • Savings Account Transfers
  • Etc.

This Business BUILDing Toolbox (future link) is just one part of the 5-step Business BUILDing Plan.

Fixing problems such as neglecting to do a proposed change order as discussed above comes down to –

  • Being aware that there are problems
  • Understanding those problems
  • Getting the Information about and Instruction of systems and processes needed to solve those problems
  • Learning to use those systems and processes
  • Delivery of your DREAM business

Check back to find out when the tools are in the toolbox and ready to go.

How to Bring a Construction Proposal to a Conclusion with a Contract

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Putting A Period at The End of the Construction Proposal

The discussion of “Building a Better Proposal” began with the problems that arise from poor communication. We talked about this being the responsibility of the contractor and some of the reasons this is a problem.

Previously we laid out the “Blueprint for Building a Better Proposal” going over the different parts of the system, explaining the system, gathering of information, writing a scope of work, putting a price to the project and finally how to put all of the pieces together into a proposal ready to present to the customer.

Once you have a signed Proposal, you should conclude with a Contract.

The Contract completes the Proposal process and covers things beyond construction. Things like funding, additional documents, property boundaries, time within which the project will be started, and terms and conditions.

  • Construction Funds – This isn’t something that is relevant to every project but will be to some. If it is, the information would be included in this section of the contract.
  • Description of the Work – A complete and full Scope of Work could be included here but not needed if the customer has been presented a Proposal. If so then a brief description of the project can be inserted and a reference to the specific Proposal and any other additional documentation, i.e. blueprints, drawings, spec sheets, governing body documents, etc.
  • Property Lines – This is another category that isn’t relevant to every project but certainly can be. If working inside of city limits, normally there are set back requirements and easements, this makes it critical to know where the property boundaries are or to have a licensed surveyor make this determination.
  • Payment – Like the description of work above, this should be in the Proposal. If no Proposal was given to the customer, then this should be specified here. If a Proposal was given, repeat it again here.
  • Time for the Completion of Work – The duration of the work from start to finish is typically expressed in the Proposal. Due to the varying number of Proposals prepared and presented to customers, there’s no way of knowing what order they will be signed and returned. With the Proposal being signed and returned prior to the preparation of the Contract, the start date of the project can be determined and specified here.
  • Terms and Conditions – An in-depth explanation of specifications, descriptions, expectations, insurance, warranty, media permissions, etc. These will be specific to your company, type of work, and location.

I would recommend that you have a legal expert or attorney review your Proposal and Contract templates as well as any other agreement document to make sure they are sufficient and protect you and your customer.

We’ve gone through the process of meeting with a customer all the way to getting a signed Contract. Now it’s time to do the “construction” part of the project.

Just because you have a signed Proposal and Contract, don’t think the communication is done.

In most construction projects changes occur. These changes need to be treated like separate sub-projects of the original project with Change Orders. This is a topic of discussion for a different day…one that we’ll have in the future.

If you know anyone in a construction trade or related industry that you think would benefit from Business BUILDing Tools or learning about those tools and how to use them, feel free to share this Weekly Solution with them. For additional articles about other construction business topics go to the Solution Building website.

Having the Right Tool and Knowing How to Use It Can Make Things Much Better

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The Thing to Remember About Tools Is…They’re Only Good if You Use Them

Over the last couple of weeks, we have discussed why it’s critical to save money for those big irregular expenses and unexpected emergencies. Next, we began the process needed to start building a “Rainy Day” fund by determining how much and for what. The Savings Transfer Sheet is like any other tool, it doesn’t do you any good if you don’t use it.

As is the case with everything that’s worth doing, starting is the hard part. Saving money is no different. It’s like digging a hole.

What if there’s an underground water line leaking in your backyard. You can see that spot where the grass is green in an otherwise brown lawn. The water bill is more than ever before and getting bigger each month. That doesn’t matter, the prospect of getting your shovel out of the tool shed and digging is more than you can bear to think about. So, you put it off and pretend that it’s not a problem.

The green spot in the yard keeps getting bigger and greener. The water bill keeps getting bigger too. You decide to cover the spot in the back yard with an above ground swimming pool. That took care of it…no more green spot. You know what they say. Out of sight out of mind.

Then one day you get a water bill that is so big you decide that you’ve got to do something. So, you drain the pool, get a shovel, and start digging. Then before you know it, you’ve uncovered the pipe, found the leak, made the repair, and filled the hole.

That wasn’t near as bad as you thought it was going to be. Once again, you are aware that this is one of those times when the overwhelming dread was way worse than the actual process. The next water bill is back where it used to be, and you wonder why you weren’t more proactive.

A shovel is a simple tool that’s easy to use. It can fix a problem before it gets too big, but only if you use it. If you don’t, the outcome can be devastating.

The same thing is true about the Savings Transfer Sheet. If you’ll take the time to get it out of the toolbox, spend some time learning how to use it, and use it regularly, it will make a significant difference to stop your financial leaks.

Wouldn’t you like to have your money filling up the pool rather than leak out of it.

If you would like to learn more about the Savings Account Transfer sheet, schedule a free 30-minute construction company consultation.

How to Build A “Rainy Day” Fund for Your Business

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One of the Tools You Should Have in Your Business BUILDing Toolbox

Last week I wrote about the importance of having savings, both individually and in business, and the high percentage of people who don’t. The tendency to spend everything you have is a problem when the unexpected happens. I’m not saying that after you pay the bills every dollar should be saved.

What I’m talking about is having money ready for big, planned purchases or unexpected emergencies.

This way you can use your own money and don’t have to pay someone else to use theirs.

Last week I told you about the tool I use for this in my business, the Savings Transfer Sheet. This spreadsheet is easy to use and makes the process simple. What it doesn’t do is force you to save. If only there was just a way to hook peoples’ deposit tickets up to electricity so that they would get a shock when depositing money without saving.

The biggest problem with saving money is…not having a plan to do so. It can be overwhelming trying to figure out how much should be saved when depositing your revenue. One of the things that makes it hard is not having consistent amounts of income. If every week you deposited the same exact amount, you could decide once and always put aside a set amount for savings.

It’s rare in business that every job or every customer pays you the same amount every time you do business with them. There are some businesses like lawn mowing, hair cutting, pet boarding, etc. that a preset recurring price has been established, even so the number of recurrences each day or week is going to vary.

The purpose of this spreadsheet is to provide a simple accurate way to know how much to save every time.

As with most things, the most difficult part is the initial set up. This part requires some research, thought and time. Trust me…the time and effort will be worth it in the end.

  • First – Look back through your financial records of the last several years. The more research you do the more accurate your understanding will be of your financial history. Even if you’ve only been in business for a short time, it will be a good place to start. This will let you see areas of unexpected expenses as well as dollar amounts.
  • Second – Determine what things or areas that need to be saved for. Some examples of what these could be are:
  • Repairing and/or replacing equipment
  • Additional equipment or upgrades
  • Repairing or replacing vehicles
  • Large building repairs or maintenance items (HVAC, new roof, etc.)
  • Building or facility upgrades, expansions, or purchases
  • Taxes (income, property, sales, etc.)
  • Irregular payments (bi-monthly, quarterly, annually, etc.)
  • Retained earnings (money for emergencies…because they are going to happen)
  • Third – Take the dollar amounts for each area that you have determined to be above or outside your normal operating costs. Figure out the percentage of your net revenue each one is. This gives you a place to start when setting up the “Savings Transfer Sheet” for the first time.

Building a “Rainy Day” savings is critical to the survival of your business.

It’s a cornerstone in the foundation of your business allowing it to weather the storms of life.

Next week we will dig deeper into the “Savings Transfer Sheet” and see how the information we’ve gathered fits into it.

Why It’s Critical to Save Money in Business and How to Do It

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Setting Up a “Rainy Day Fund” for Your Business Can Help Keep It Afloat

We’ve just passed a painful time of the year…INCOME TAX SEASON. This can be stressful but doesn’t have to be if you’re prepared.

It’s common for people to spend everything they earn and not save anything for future investments or emergencies. For the most part, as a society here in America we have become comfortable.

We have forgotten how important it is to save money.

There have been times throughout history when things weren’t good financially, i.e. the Great Depression of the 1930’s. Enough time has passed, that for most people it’s become a distant memory. If you have ever talked with someone who went through the depression or a similar experience, saving money became more than something that needed to be done…it was the difference between life and death.

As reported in Zippia 42% of Americans have less than $1000 in savings and 10% don’t have any. Businesses aren’t doing any better, and it’s every bit as important.

Part of a good business financial plan includes saving money for those irregular and unexpected expenses.

Just like in our personal lives, in business we get busy with the process of daily living. We work hard at the normal operation of the business and neglect to intentionally plan for those “rainy days”. Things like equipment maintenance and repairs, building maintenance and repairs, quarterly and annual taxes, irregular payments, etc.

When I started doing construction work I learned the skill of building from some of the best craftsmen. Later when I went into business for myself, I thought I knew everything that I needed to be successful. The problem is that while they taught me how to build a solid, well-built structure, I was never taught how to build a business.

Early on in my business career I learned one of those business building lessons the hard way…the importance of saving money.

I was working hard to keep construction moving forward. The material figured and ordered and suppliers paid. Subcontractors and employees organized, having what they needed and paid. Things were going well, and there was even some money left over. So naturally, I spent it.  Then it happened…the accountant showed me how good my year was by telling me how much I owed in taxes.

How was I going to pay them? I didn’t have that kind of money. What was I going to do? I was going to have to make payments. Just so you know, tuition to the “School of Hard Knocks” is expensive.

That’s why over the last 40 years of learning lessons the hard way I designed and developed a system to help me build a successful business. One of those systems was a way to separate and save money that would be needed later.

The question then was how am I going to do it?

Several years ago, my wife and I found out about Dave Ramsey and his Financial Peace Program. It’s a program that teaches you to, “Live like no one else, so that later you can live like no one else.” The very first lesson he teaches is “Super Saving”. It’s a common-sense approach to saving money and the reasons it is important to do so. This was great for my personal finances but wasn’t an exact fit for the business.

So, using the basic principles of Dave’s plan for personal savings, I began working on a way to do the same thing in my business. The Savings Transfer Sheet is the tool I came up with and is one of the tools in the Business BUILDing Toolbox.

The “Savings Transfer Sheet” is a simple spreadsheet that with a few simple entries will give you the dollar amount that needs to be separated from gross revenue and saved. That money can then be put into a separate checking account, savings account, or turned into cash and put in a safe.

This keeps saved money from accidentally being spent on the wrong thing.

After talking with a lot of different business owners I realized that every business could use a “tool” like this. That’s why we’re currently working on putting business tools in the Business BUILDing Toolbox that will make the Savings Account Transfer tool available to construction companies.

You can find out more about the Savings Account Transfer sheet or other tools in the Business BUILDing Toolbox by setting up a free 30 minute construction company consultation.

Learn How to BUILD the Construction Business of Your Dreams

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The Final Building Blocks in the 5-Step Foundation of Your Business

Dreaming big has always been my nature. Early in my life I had some really big dreams. The problem arose when these dreams didn’t come true. That’s when disappointment and a sense of failure set in.

This discouragement is why over 60% of US construction companies fail within the first five years. People’s business dreams aren’t going according to plan, and they don’t know what else to do but quit.

When I found myself struggling with feelings of failure, I concluded that my dreams must have been wrong. That’s when God got my attention with a smack upside the head…literally.

God wants us to dream big. Mark 11:23-24

The thing that I realized after this wakeup call was…God wasn’t going to do this for me…He was going to do it with me. And I had to get off my “but” and stop making excuses. If I wanted to BUILD this dream business, I needed to get to work.

BEING aware of the problems and UNDERSTANDING them is where the turnaround for your business starts.

BEING aware and UNDERSTANDING are the first two steps in the 5-step process for BUILDing a better business. The next step is receiving the INFORMATION needed and getting INSTRUCTIONS about IMPLEMENTING this INFORMATION into your business. The I in BUILD is hard because it requires asking for help, and most construction guys don’t like to ask for help.

B = Being aware of problems

U = Understanding problems and how to fix them

I = Instruction and Implementation of systems and processes

This brings us to the L in BUILD…LEARNING.

LEARNING is the step that will take the longest and can be the hardest, but it’s also the most important. It is the one that leads to the biggest change. It’s a change from the way you have always done it. Most of us don’t like change. We’re comfortable wallowing here, doing things the way we always have.

Change will go faster if you have someone help you through the process.

LEARNING to build a building isn’t instantaneous. You don’t show up on a job site your first day knowing everything about building. You come back the second day and LEARN more and the third and the fourth. And years later you have LEARNED how to build.

Just like pouring concrete, framing a wall, pulling wire, soldering copper, shingling a roof, or installing flooring…after repeating the process over and over it becomes a part of who you are…you could do it in your sleep.

Building a business is the same. You can’t just wave a magic wand and have your business running like a well-oiled machine. It takes time and effort just like building a building does. This also becomes a part of who you are.

One of the greatest feelings ever is to step back and see a finished building project knowing that you did that. You built that.

You can get that same feeling about your business. If you put in the effort to learn the systems and processes, you will be able to step back and know that you built that business of your DREAMS.

This is the D in 5-step BUILD process. The DELIVERY of the DREAM. This is where all the hard work pays off.

If you would like some help BUILDing your DREAM business and receive a free 30-minute consultation of your construction company, simply take this short survey.

You Need the Right INFORMATION to BUILD the Construction Company of Your Dreams

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Next, You’ll Need Some INSTRUCTION on How to IMPLEMENT This INFORMATION

Most of us in the construction business started out with a vision in our minds of what our dream company would be like. We see those successful companies out there and there’s no reason we can’t do the same thing. After all, we’re really good at building things.

The problem is more times than not…those companies are struggling with the same kind of things that you are. Everything always looks better from the outside.

Dreams usually aren’t founded in reality; it is after all…a dream.

Without knowing the struggles inside those other companies, we begin to doubt that we have what it takes to run a successful business. Then the dream turns into a nightmare. Maybe we’re just kidding ourselves. What made us think we could do this anyway?

This is where a lot of companies give up, close the doors and go back to working for someone else feeling like a failure.

In that time of doubt, you know something is wrong, but you just don’t know what. BEING AWARE that there is a problem is the first building block in BUILDing your dream business.

You don’t need anyone’s help with BECOMING AWARE there’s a problem.

This is where the next block in the foundation of a successful construction company needs laid. The second building block is UNDERSTANDING those problems. It would be nice to have some help with this block.

This is the realization that building a successful construction business includes more than just construction. It requires a plan for the business. In time you can figure out what you need to build a successful business, but it can take a long time and can be expensive. What you need is INSTRUCTION from someone who’s graduated with a master’s degree from the ‘school of hard knocks’.

Having been in construction for more than forty years I have just such a degree.

The third BUILDing block is INSTRUCTION. Just like going to school to learn from teachers is helpful, having someone with more experience in business operations to INSTRUCT you is also helpful. It’s important that you are INTRUCTED with the right INFORMATION. You need the right INFORMATION to help you solve the problems specific to your business.

Asking for help can be a hard thing to do, but it’s easier and faster than trying to do it alone.

The amount of information it takes to run a successful construction business can be overwhelming. Asking someone for help can be scary, not to mention time-consuming. Ultimately, it comes down to you making a decision. You can decide to keep doing things the way you’ve always done them or…

You can decide to do something different and change things.

After being INSTRUCTED and INFORMED you need to LEARN how to use the INFORMATION you’ve received. LEARNING is the block we’ll lay in the next post.

I don’t think your dream was to start a company and have it fail.

It’s up to you to keep that from happening.

If you’d like some help with finding solutions to the problems your company is facing, you can get a free 30-minute construction company consultation with me by filling out this survey.

Wouldn’t You Like to BUILD Your Construction Company into Your Dream Business?

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This Requires an UNDERSTANDING of your Problems and Having Solutions to Fix Them

Last week we talked about the high number of construction companies that fail and some of the reasons this happens. None of these companies were started hoping that they would go broke and go out of business.

So why is it that construction companies fail so often?

We discussed some of those reasons last week. They included things like – a lack of funding or poor cash flow, poor production performance on projects and not having a good business plan.

These problems are more on the business side of things than doing construction. Most people in construction just want to do “construction”, they don’t want to do “business” stuff.

If you want to BUILD your dream construction company, you need a plan…a Blueprint for BUILDing a Better Business.

This plan starts with Being aware that there is a problem. Most people who own or manage construction companies know that something’s not right, but don’t know what it is. They know how to build buildings but not businesses.

Being aware that there’s a problem is the first step. The second is, Understanding what those problems are. Understanding what their business needs help with. Understanding that just like building a quality building isn’t a simple task…neither is building a successful business.

To help us Understand what construction companies are struggling with, we have developed a short survey. In exchange for your time filling out this survey we will give you a free 30-minute construction company consultation to help you Understand the problems your company’s dealing with.

We’ve talked about the first two steps to BUILDing a better construction company, the B and the U.

  • BEING AWARE of the problems
  • UNDERSTANDING what those problems are

There are three more building blocks needed to finish building the foundation of your dream business.

They are –

  • INFORMATION on how to fix those problems and INTRUCTIONS for implementing those solutions into your business
  • LEARNING how you use these processes and systems in the daily operation of your business
  • DELIVERY of the DREAM – This is where your dream business becomes a reality. It is where all the hard work begins paying off.

In upcoming posts, we will dig deeper into the I, L and D of BUILDing a Better Business and how these building blocks are the foundation that successful construction companies are built on.

If you own or manage a company that is involved in construction, don’t forget to fill out the survey and get your free consultation! Also, if you know someone in the construction industry that you think would benefit from a construction company consultation, please send them a link to this post or the survey.

Link to the survey – Understand Your Problems Survey (surveymonkey.com)

What Do You Need to Know to Run a Successful Construction Business?

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It Has More to do With Business and Less to do With Construction

There’s something exciting about the thought of starting your own business. It seems like a great idea initially. The problem is that most people don’t realize what it takes to operate a successful construction company.

We’ve all seen construction companies get started and then go out of business.

 According to the Small Business Administration…

60 percent of US construction companies fail within the first five years of operation.

These companies reportedly blamed several factors for their failure, including labor shortage, politics, insurance, taxes, natural disasters, and subcontractor incompetence. While these things may be a part of the problem, if we look a little deeper, we’ll see…

The real factors that brought about construction company failures are internal and within the owner’s control.

The reasons are more likely poor planning, inaccurate scheduling, hiring the wrong people, inability to innovate, poor management, and bad or no business system.

The good news is, that the next generation of construction businesses can learn from their forefathers’ mistakes and avoid failing for the same reasons. 

Owning or managing a construction business is a hard thing to do. And to do so successfully is especially hard.

The solutions to problems that can put construction companies out of business may not be easy. It takes a lot of planning, production management, hard work, and discipline to keep the business running successfully. But at least…

Most issues faced in a construction business are controllable.

Finding out what challenges are likely ahead can help construction companies be prepared.

Here are some reasons construction companies fail –

Lack of funding and/or poor cash flow – One of the reasons construction companies fail is not enough funds or unwise use of funds.

The ultimate dream of any professional in the construction industry is to earn more by owning and running a business, rather than collecting a paycheck working for someone else. But keeping a business operating at a profit is never as simple as just doing construction work.

There are processes and systems that need to be in place for collecting from customers and paying the bills. Construction requires tools, vehicles, and equipment, and these aren’t cheap.

It’s critical to maintain positive cash flow, have a budget for bills, and money saved for emergencies.

Overlooking these things can quickly lead your company to failure.

Poor project performance – One bad project can lead to a construction company’s closure.

Project performance is more than the physical construction work. The internal business systems for proposals, change orders, project management, invoicing, etc. are often not thought off when thinking about construction projects.

Construction projects are about good results. This includes starting and completing projects on time and within budget. Meeting contract requirements and customer expectations.

Failure in any of these areas may mean the closing of your company.

Failure to plan – Just like good planning can lead to a successful construction project, the same is true for building a successful business.

In project planning, you define goals and processes according to the customer’s requirements. You are intentional and clear on where the project is going and how you’re going to get it there.

A good builder will do the same when it comes to their business.

Consistant clear communication with customers, production teams, and suppliers is one of the important pieces of a good business plan.

The likelihood of companies going out of business without a plan increases exponentially.

There are a lot of risks lurking on a construction site that can cause a project to go poorly. The best way to avoid these risks is through awareness, understanding, and preparation.

The same is true for your company. If you become aware that there’s a problem and understand it, you will be more likely to avoid it. Instruction and learning can lead to building your dream business.

The road to success in the construction industry may be long and rough, but it’s worth it.

Become more successful through improved processes, systems, and management; take it one step at a time, and soon enough, you can achieve your ultimate business dreams.

Let us know what your biggest construction business struggles have been in the comments below.

How Implementing a Plan Can Help Us Build a Successful Business

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The Five Remaining Areas of the “Job List” Building Block

Back in December we started discussing the importance of building your business on a solid foundation and why people in the construction industry avoid doing it. Then we talked about how a reporting process like the “Job List” can be an important building block in a construction business foundation. Last week we looked at how the “Job List” can help us plan for the future.

A business won’t stand long if it’s not built on a solid foundation.

So far, we’ve discussed how…

  • Creating and recording project numbers can help you focus your attention on the right kinds of projects.
  • Tracking project bid amounts will give you a clear picture of where you are in relationship to meeting your financial goals for the year.
  • Tracking dollar amounts of signed proposals will give you the rest of the picture of where you are financially in relation to where you want to be by the end of the year.
  • Tracking dollars collected from projects will give you a clear comparison of your signed amounts with your collected amounts.
  • Percentage of jobs signed will let you know if your pricing is too high or too low.
  • Percentage of dollars signed per dollars bid will let you know how you’re doing in relation to reaching our financial goal for the year.
  • Percentage of dollars collected per signed simply lets you know if you’ve collected everything that was bid.

Now let’s look at the final five areas of this document and how they fit into a solid business foundation.

Average dollar amount of projects bid – This number (cell I-30) is just like what it sounds like. It’s the average dollar amount of all the projects you have done proposals for. It can be helpful to know what this information is. It can help you determine if you should make changes to the sizes of proposals that you should be doing.

Average dollar amount of projects signed – This price (cell J-32) lets you see what the average dollar amount of your projects is and how it compares with the proposed amounts. Like the average bid amount, this number let’s you know what size of projects you normally do. You can then make changes to what proposals you focus on.

Average dollar amount of projects collected – Like the percentage of dollars collected, this number (cell K-34) lets you know if you’re increasing or decreasing the dollars you collect after proposals are signed. This can be a critical piece of information about how accurate your proposals are.

These next two areas are instructive when it comes to production planning as it relates to achieving your revenue goals.

Projected timeframe for doing signed projects – This information (cells I-23 and J-23) tell you how long it should take you to do the work of the proposals that you currently have signed. This is determined by dividing what your gross revenue goal for the year is by 52 weeks. Then dividing the current total signed amount (cell J-22) by that weekly revenue target number gives you the number of weeks needed to do that work.

Projected date work should be done – Like the projected timeframe, this information (cell K-23) converts the projected time it should take to do the work of the currently signed proposals to a date. This is achieved by adding the number of weeks (cell I-23) to the starting date (cell H-23). This then gives you a target date on the calendar that the work should be done to stay on task and achieve your dollar goal for the year.

I find these last two pieces of information the most revealing and helpful when it comes to staying on target.

This information can increase the sense of urgency and focus, and this is something that is critical to building a successful construction business.

I hope you’ve found this series on the “Job List” as a foundational building block helpful. If you would like more information about this or other business systems and processes, go to SolutionBuilding.net or reach out us in the comments below.