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It’s Amazing How Quickly Profit Can Get Sucked Up

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Missed Deadlines Are Like a Big Shop Vac to Profit

It’s hard for some of us to make money…for others not so much. I’m not talking about how businesses and lives look on the outside. I’m talking about the real and truthful hidden beneath the exterior profit. Borrowed money often makes things appear way better than reality.

On one of Donald Miller’s Business Made Simple daily podcasts, this past week he talked about the importance of hitting deadlines. Missing them can cost you a lot, in both money and reputation. Missed deadlines are too common in construction. I know missed deadlines are costing me and my business.

On the surface, a missed deadline here and there doesn’t seem like it’s a big deal. The problem is that those missed deadlines don’t ever go away, they just keep getting added to previous ones. It starts out like a little snowball rolling down a hill, problem is…when it gets to the bottom it’s big enough to wreck your business.

You can’t go back in time and change the past; you can only learn from it.

Let me show you how missed deadlines cost you money. Let’s say the labor budget for a siding project is $10,000. This translates into 167 hours or 24 working days. The cost for labor and length of time needed for this project was predetermined by a data base using the square footage of walls to be sided.  

Often production crews get to a stopping point mid-afternoon and rather than starting another section they quit for the day. This may happen a few times throughout the project. When they get to the end of a project, they happen to get finished at noon. It’s too late to start the next project so they wait until the next day to start.

If throughout the duration of the project the production crew stops 1 hour early each day, this adds 3 days to a 24-day project. These 3 days now pushed starting the next project back 3 days plus the half day at the end.

If this happens consecutively on projects throughout the year those 3 ½ days becomes 35 days. 35 days would be enough to do another project, not to mention the overhead costs that continue whether there’s work being done or not.

A 15% profit figured on the siding job would be $178.00 per day, times 3 days is $534.00 for that one project. Add to that the complete project missed is $4,798.00 lost to never be gotten back. Multiply that by 25 years of doing business that’s a lost profit of $119,950.00 sucked up by the “missed deadline vacuum”.

The problem isn’t the labor costs…it’s the never-ending overhead.

Every deadline missed in a company, whether production, sales, marketing, administration, or bookkeeping subtracts from the bottom line. Each of these little subtractions is like a little rock thrown into a pond. The ripples will inevitably spread throughout the whole company sucking up profit.

Meeting deadlines has to do with being intentional. Determining your priorities, getting them on the calendar and pushing forward. The only way I reach the goals I have for my life is to meet deadlines.

I’m going to make meeting deadlines a priority for 2021.

Here’s to a more profitable 2021!

How Can I Know What to Do?

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Guessing Isn’t a Very Good Plan for Making Business Decisions…

Or any other kind of decision for that matter. Over the past several months I’ve heard or asked the question, “What should I do?” This question gets asked about all sorts of things both big and small.

Some decisions are more critical than others…Should I start this new business? Should I ask this person to marry me? These are more important questions than, “Where do you want to eat?” Knowing what to do in any given situation can be hard, but not as hard as we make it.

I think Satan likes to keep us guessing.

The uncertainty of what we should do keeps us from moving forward and accomplishing the things God wants for us. Sometimes it takes a smack in the head to get our attention and give us clarity. If God gives you a direction to go then stop questioning.

We think it would be great if we knew exactly what it was that we were supposed to do all the time. If this were the case, we would just be robots. We were made to have choices.

Knowing the destination doesn’t mean there’s only one path to get there.

“Clarity starts with a decision.” This is something Ray Edwards said in his 7 Steps to Getting Clarity podcast. His point was that we won’t ever have all of the answers in the beginning. If we do something we never will.

Here are three components to making the best decisions we can. –

We need to listen to God – I believe that God has given each of us a specific purpose. Something that only we can do in the way that we can do it. After God got my attention with the board, I knew what mine was. This doesn’t mean that I don’t sometimes lose my focus and start asking questions.

This is when we need to go back to the Architect of our lives and review our life blueprint.

We need to know ourselves – We’ve been given an internal compass to direct us toward our purpose. Sometimes it gets misplaced or we forget to look at it. We’re moving along down life’s road and when we look up, we don’t know where we are or which direction to go.

Maybe we never knew that we had a compass or how to use it. This internal compass is who we are, what we like, what we dislike, what we’re good at, what we’re not so good at, etc. Every one of our compasses are different.

You just need to know your own compass and use it.

We need to take action – You may know what God wants you to do. You may know which direction your compass is pointing you. If you don’t do something, you’re doing nothing.

Making a decision and taking action can be scary. What if I make the wrong one?

As I think back over some of the big business/life questions I heard asked and the answers given, I ask myself…how would I know what is the right thing for that person to do? I don’t know what purpose God has given them, I don’t know what their specific gifts are, I don’t even have many details of their question.

I can encourage them, I can offer them opinion, but really a surface answer is the best I can do in this situation.

I know that when I’ve had suggestions or answers to my questions, they have been helpful (even though more times than not I already knew the answer.) Sometimes we just need some reassurance that we’re not crazy.

Ultimately the right answer is already there and comes from within.

Your Business Doesn’t Have to be a Scary Movie

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How to Avoid Business Disaster

Have you ever noticed how in horror movie’s people make the worst possible decisions? The Geico commercial where the young people decide to hide behind the chainsaws (while funny in the commercial) is way too real for most construction companies. In the commercial they choose to ignore the one running car that would help them avoid the catastrophe that is otherwise inevitable.

Why do so many businesses hide behind the chainsaws?

In most cases it’s written in the script. This is the way it’s always been done. Like in the movies, this will end in disaster. It’s time to rewrite your script.

In construction one of the root causes for disaster is not having a safe and secure method for doing proposals. A silver bullet is used for stopping a werewolf, witch, vampire or other monster. The Blueprint for Building a Better Proposal is just such a bullet.

Here are 7 common mistakes that cost contractors a fortune…but don’t have to.

  1. Your customer lacks clarity – Crystal clear communication is critical to your success. A clear scope of work avoids confusion between you and your customers.

2. Production crews lack clarity – Like the customer, the people working on the project need to know what’s expected. If the wrong things, too much or too little is done it results in losing money and/or unhappy customers.

3. Unclear production budget – If subs/employees don’t know what the budget is, how can you expect them to not overspend. This is a sure way to lose money.

4. Unsatisfied customers – Your customers have hired you to provide a completed construction project. If everyone isn’t clear about the expectations the customer is not going to be satisfied in the end.

5. Taking on unprofitable projects – Guessing at what your labor and material cost are going to be is a huge risk. Having a system that uses, cubic feet, square feet, lineal feet, etc. removes the guess work. Not to mention having predetermined overhead and profit margins.

6. Trying to do everything – In small companies your focus is on the physical construction. This doesn’t leave much time for doing bids. This proposal system allows you to delegate work to others. It’s less expensive to hire administrative people than construction personnel.

7. You don’t have a system that is customizable or scales – Most construction projects consist of a variety of different areas of construction, not to mention different markets and geographic locations. Add to that markups and profits that can be adjusted. You need to have a system that can be made to fit your specific needs.

Small and medium sized construction companies too often follow the same script that everyone else is. They hide behind the chainsaws, even though they know this is a bad idea.

Don’t hide behind the chainsaws!

Rewrite your script so that there’s a silver bullet to stop the proposal monster. At the very least…get in the running car.

Spinning So Many Plates at the Same Time Can Make You Dizzy

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It’s Up to You How Many You Spin

This title might seem familiar, and it should. I used a very similar one for a post in March of 2018. That post’s focus was on trying to run a business without a plan.

This post is going to address a different question that has been coming up in almost every construction conversation I’ve had over the past several weeks. These discussions have been with other contractors, sub-contractors, my team, customers, and even with people in other industries. This is not a new topic but seems to be reaching an increased ‘plate breaking’ point.

Most of us have seen plate spinning acts in some form or another. When I was growing up, I remember seeing Erich Brenn performing his plate spinning act on the popular Ed Sullivan Show. I remember him running back and forth, trying to keep all the different plates spinning at the same time. It was amazing. (Be sure to watch this video)

I’ll bet you’ve felt just like him.

Most businesses are operated in a way that feels a lot like trying to keep all those plates spinning at the same time. Just like the performer who keeps putting more and more spinning plates up on the end of sticks, we keep trying to do more and more.

There is a limit to how much we can do. We can only run back and forth keeping the plates spinning for so long before they start falling and breaking. This means there is a maximum number of people that we can provide service to, before things begin falling around us.

Why do we continually keep adding more plates?

That is the million-dollar question. There seems to be some inherent traits that self-employed people are born with that causes us to continually take on more. I believe that it is directly connected to having a servant’s heart. We have a God given talent that someone needs the benefit of. We instinctively say yes to help those in need of it.

The problem of course, is that there is a limit. A limit to how much we can do, to the amount of time we have each day, to the number of people we can help. And we instinctively know this. When we say yes to that next thing, the voice inside our head says, “How are you going to do that?”. We shrug our shoulders and say yes anyway.

Trying to do everything makes it hard to do anything well.

This is a problem that has been around as long as people have. The question is…What are we going to do about it? How are we going to get this plate spinning madness under control? I keep asking myself this question over and over.

The answer to this question is inside each of us and there are as many answers as there are people asking the question. The answer starts with realizing the problem and recognizing that we have control over it. We can choose to answer it or pretend it doesn’t exist and keep spinning more and more plates.

This is where things begin to get tricky. Looking for and figuring out your answer, the one that is exclusively yours, takes time. I know that you are already too busy spinning plates to add another.

If you don’t spin this plate you will never keep the rest spinning.

Learning How to Get a Construction Project Started Out Right

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John Gets Excited About His First Meeting with Gene

As usual John had been on the go, nonstop, trying to keep construction projects moving forward, collecting money, paying bills, meeting with new potential customers when he realized, he had six projects that needed proposals. As he thought about this, he realized it had been more than two weeks since he had talked with Gene about how to do proposals.

He picked up the phone and dialed Gene’s number. “Hey Gene, this is John, have you got a few minutes?” “Sure,” Gene said, “What can I do for you?” “I just realized that I’ve got six projects that need priced. This reminded me of our conversation a few weeks back when you offered to go through your bidding process with me. Does that offer still stand?”

“Sure,” said Gene, “when would you like to meet?” John thought for a minute realizing he wasn’t sure when he would have time to squeeze this in. “I don’t know Gene, as usual I’m booked pretty full.” Gene waited for a minute and then said, “I understand. Think back to what you said in our previous conversation. Do you remember how frustrated you were?”

“Your situation isn’t going to change until YOU decide to make it change.”

John rubbed his forehead. He knew Gene was right. “Okay”, John said, “I can squeeze in an hour or two Saturday. Would that work for you?” Gene shook his head and smiled, remembering what it was like to be where John is.

Then he said, “John I appreciate where you are, but the process of getting from where you are, to where I am, isn’t going to happen in an hour or two. I’ve been doing it for forty years. If you can commit to four hours Saturday, I will be glad to meet with you.”

“Realize, YOU are the only one that has the power to make this change.”

John sat there with all the things that needed done, bouncing around in his head. Then he thought about how tired he was of feeling out of control. Once again, he knew his mentor was right. Gene had taught him so much about construction and how to build things.

Now it was time to learn about the business part of construction.

“Okay,” said John, “How about we meet at noon on Saturday and I’ll bring the pizza.” Gene said, “That sounds great and we can get started, but that’s all this meeting will be…getting started. Like I said before I’ve being doing this for years. It takes work, it takes commitment, but the end result is worth it.”

“It’s more than just learning. It’s a lifestyle change.”

“John, most people in construction never learned the business side of operating a business. This is where they struggle until they get to a point where they give up. Bring an open mind and an open heart and be ready to have them both filled.”

“Nothing is going to change until you take action and do something.”

Now John was getting excited and looking forward to meeting with his friend and mentor and making some changes in his life. He was beginning to realize that a getting a construction project started out right, begins long before any construction takes place.

What is “Business Clarity” and How Do You Find It?

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A Lack of Knowledge and Inexperience Threatens Your Dreams

Once again, John was alone at the office late on a Saturday night working to get at least one more proposal done, before going home. He had promised four different customers their proposals this week. If all goes well, he’ll have this second one finished before midnight.

As John crunches numbers hoping he hasn’t forgotten anything, he asks himself, “Why am I doing this? I could go to work for somebody else and make more money and work less hours. This sure isn’t how I pictured it five years ago when I started the company.”

“I had no idea that running my own business would be this hard!”

John rubs his eyes and stretches his back and thinks, “I must be doing something wrong. When I was working for Gene at XYZ Construction he made things look easy. I wonder what he was doing different.”

John has been working like crazy all week long. Between production help not showing up, materials not being delivered on time, cost overruns and computer issues…projects are behind schedule, he’s losing money and even if he works tomorrow he’s going to have to disappoint at least one of the customers waiting on a proposal.

“How am I ever going to turn this around?”

When John finishes the proposal and looks at the clock, it says 12:40. It’s already Sunday he thinks and he still needs to proofread it, print it and sign it. Something has got to change! “I’ve been leaving home early and getting home late all week. I haven’t even spoken with my wife for days. I’m calling Gene Monday to see how he did things.”

First thing Monday morning John called Gene. After a few minutes of catching up, John asked Gene the question that he couldn’t quit thinking about. “Gene, I’ve been working day and night trying to keep up. When I worked for you it seemed like you had everything figured out. You weren’t stressed and when things didn’t work out as planned. Your customers understood what to expect with their projects and were happy when they were finished. What am I doing wrong?”

That’s the question that almost every business owner asks themselves.

“Know this,” Gene said, “When I started my business, I was just like you. I struggled to keep up, worked too many hours, neglected my family, was mad at myself for letting down my customers, my family and myself. I kept asking myself that same question. What am I doing wrong?”

“By the time you were working for me, I had figured some things out. It’s amazing what you can learn when going to the “school of hard knocks”. Keep in mind this is the most common process but isn’t the most effective.”

“What really turned my business around was when I found out about Solution Building’s, Blueprint for Building a Better Business.”

Think about how much easier and better a construction project goes when you have a plan. The same thing is true for a business. A plan gives you direction, keeps everyone involved working together and improves the odds for a successful outcome.

“John, if this is something you would be interested in, I would recommend starting with the, ‘Blueprint for Building a Better Proposal’. This is the most important and most neglected part of construction communication. If you’d like I would be happy to meet with you and go through the process and answer any questions.”

“If you know of any other construction companies that you think could use some help doing proposals share this information with them and they can meet with us too.”

“There’s a lot more to the ‘Blueprint for Building a Better Business’, but starting out, you should focus on the proposal system. After you get this part implemented, we can discuss which part of the business blueprint system would be best for you next.” After talking with Gene, John thought, “I’m sure glad I made this call. For the first time in a long time I feel like there might be a light at the end of the tunnel that wasn’t an oncoming train.”

The New Website Is Here, The New Website Is Here

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“Things Are Going to Start Happening to Me Now”

Just like Navin R. Johnson in the movie, The Jerk, we all want to be somebody. Being somebody is more than just having your name in print in the new phone book…

or having a new website.

This doesn’t mean that we shouldn’t be excited about the newly rebuilt Solution Building website…because we are! It’s been a long process but totally worth it. Thanks Stacey with Custom Internet Services, for another fantastic job. This site is every bit as good as the Timber Creek Construction site.

Like Navin, we all start out wanting something but aren’t sure what it is or where we’ll find it. Navin’s search is filled with up and downs, successes and failures. He could have avoided some of his heartache if he’d only had access to a website where someone was sharing what they had learned from similar experiences.

Struggles are a part of life but can be reduced if we’ll some get help.

My hope for this new Solution Building website is twofold. First it is to help prevent construction companies who are struggling with a lack of business knowledge and understanding from becoming overwhelmed and unprofitable. Second is to help their customers avoid disappointment and frustration by knowing what to expect from the construction process.

We will do this by providing businesses with systems and training to make them more efficient and profitable while educating customers in what to expect through the entire construction experience.

When construction companies have the tools they need and customers know what to expect, both can achieve their dreams.

The first tool that we’re offering is the Blueprint for Building a Better Proposal. This tool consists of templates, samples and instructions on how to use the system. We are also offering a day long live workshop coming up on March 13th, where you will be given more in depth teaching and training.

You can find out more about this in these posts:

This is designed to help companies in the construction industry prepare consistent, clear accurate proposals for their customers. If you or someone you know would benefit from this Blueprint for Building a Better Proposal system, send them this link so that they can build better proposals.

Deciding What Should Be First on The List

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It’s Amazing How Things Become Clear with A Limited Amount of Time

 

There are so many things trying to get on the “to do” list and each one competing for the top position. Deciding which one should get that spot is tough. There are so many great and important things that we need or want to do.


It’s easy to say that we have limited time, but hard to actually schedule that way.


My computer’s battery is not lasting as long as it did when it was new. Recently while working out of the office, without the power cord, I had 2-3 things that I wanted to get done before the computer shut down. This limited time forced me to sort and prioritize them.


How do we decide what to say yes to? 


Emergency situations often require triage. This is the process of prioritizing patients’ treatments based on the severity of their condition and the resources available. In these situations, victims are divided into three categories.

 

  • Those who are likely to live, regardless of what care they receive;
  • Those who are unlikely to live, regardless of what care they receive:
  • Those for whom immediate care might make a positive difference in outcome.

 

These choices aren’t easy and often require a quick “gut decision”. A pre-determined system, training and experience aid in the process and provide for the greatest number of survivors.


Another life and death choice is deciding who gets a transplant when there are a limited number of organ donations available. Take for example a set of twins who both need a liver transplant and their father has one liver to give. Which little girl gets it? The early thoughts of a father would be to give half to each. The problem with this, half would help neither. The final decision will be determined by which one needs it most or which one is most likely to survive.

 


Most of the choices that we make in business aren’t this critical…or are they? The decisions we make can mean life or death for our business.

 

In medical life or death situations there is a system and plan in place before hand. This same type of system should be implemented in our business. We should predetermine how we are going to choose the most important thing to the life of our business. This is where things get hard.

 


What makes one thing more important than another?


 

What should be the highest priority? Should it be production or proposals, record keeping or customer service, marketing or staff? We’re faced with tough decisions in business every day.

 


I can’t answer this question for you, but I’m tired of struggling with this dilemma and plan to design and implement a “business triage” system going forward.


What will give my business the highest chance for survival?

How To Win The Race Of Business

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You Win by Never Quitting

 

It’s NASCAR race weekend in Kansas City. My brother-in-law and I have already enjoyed Saturday’s race. There were several things that happened late in the race that changed the expected outcome. The winner of the race was not the one who lead most of the race, but he kept racing until the last lap and won.


Currently we are sitting in the hotel lobby, waiting to get back into our room, which we are locked out of and our stuff is inside the room. It appears that the battery on the electronic code reader is dead. Technology’s great…when it works.


I’m writing this on the hotel’s computer in the lobby since my computer is locked in the room.


Most people would say the only way to win a race, is to finish ahead of everyone else. I would argue that there are other ways you can win. For me winning is as much about staying true to values and core principles as it is finishing first. There are races inside of the race. Points accumulated toward the championship, sponsor visibility, etc.


When racing you need to be ready for whatever challenge is around the next corner. (Like being locked out of your hotel room.) There are other drivers, wrecks, breakdowns, all things that are out of your control. Things learned in this race or this season, help me to race better. Winning is how you deal with difficult situations.


This doesn’t mean you should race without passion or a desire to win.

 


In racing there are pit stops and caution flags that give you a chance to catch your breath and regroup. The same is true in business. Take advantage of these opportunities when you get them.


It takes more than a driver to win a race. It takes a good team, a good system and good equipment. Business is no different.


Winning the race is about how you run it.


Galatians 5:7, 2 Timothy 4:7 and 1 Corinthians 9:24


Three hours and we’re back in our room. The hotel was very apologetic, they comped our room, gave us free breakfast coupons and additional points. They had a computer and it served me well.


I’m going to call it a day so that tomorrow we can race another day.

When you win…remember to celebrate.

This video is from the Sunday race, 10/20/19

How To Balance Passion and Profit In Business

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It Doesn’t Have to Be One or The Other

 

Why is it that the owners of small businesses struggle to even make minimum wage? When you factor in the number of hours and amount of stress that most small business owners endure, often it’s less.


I had this conversation with a local contractor last week. The same conversation I’ve had with different contractors, including myself, repeatedly over the years.


Self-employed people are generally in business for one of two reasons. They either love what they do or they’re in it to make all the money they can. The ones who focus on quality and service usually don’t put enough effort into profit. On the other side, the ones who focus on profit, do so while neglecting the quality and service.


Let’s look at some of the reasons for this problem.


In a Score Contracts blog post, “8 Reasons Why Small Businesses Are Not Making Money” they list eight reasons. Most of these you have heard or experienced, but some are worth repeating.


#2 – They don’t know what they’re doing. They are technicians or trades people trying to run a business. They need to have a business plan in place and use it.


#5 – Poor thinking. Most are hard workers but have poor thinking habits. They spend more time planning their meals, vacations and daily chores than they do their life.


#6 – Lack of education. Not formal schooling, rather self-motivated expansion of knowledge like reading, studying, courses, on the job training.


#8 – Self-doubt or fear. Most people quit before they even get started. They look at the options and then talk themselves out of even giving it a real try.

 


Here are some additional reasons that small businesses find it difficult to make money, found in a blog post “17 Truths About Running Your Own Business”. 


#1 – You can’t be everything to everyone. You need to decide what your priorities are, be selective and learn to say no to the things that aren’t.


 

#6 – Your business isn’t a piggy bank. You can’t just spend money on everything you want without a plan. You need to be sure to have money for taxes, equipment or building repairs, investments, etc.

 


#8 – You can’t do everything. You need help. You need a team and they need to be good. You need to know what that looks like and how to get them.


#10 – Your customers are your most important asset. Treat them as such.


#17 – You are your own most important client. You need to spend some time every day working on your business and not in your business. If you don’t take care of the business, it won’t last.

 


What are we going to do to make our business profitable while being true to our passion?


As is the case generally, everyone’s specific situation is different. The important thing is to listen, learn and apply information learned. If you learn new things and don’t use them, they’re worthless.


Application is the hard part.


Because we have struggled ourselves with finding a business system to fit our needs, we decided to develop a user-friendly business system that can be tailored to different business’s needs including training and implementation support.

 

 


It doesn’t have to be only passion or profit; IT CAN BE BOTH.


Here are some previous posts about some of our business system thoughts and struggles.


Building Your Business Is Critical to The Survival of The Business
Be Careful About Short Table Legs
What Does It Take to Be a Builder?
The First Next Thing to Building A Better Business

 

Share business struggles that you or someone you know has had in the comments below. This will be helpful to us as we design the system.