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How Having a Plan Can Help You Build a Successful Business

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A Plan is Only Good if You Use it

The past couple of weeks we’ve discussed how important the Production Tracker tool is and how it can help you see the future of your business.

Building a construction business is no different than building a building. If you don’t have a plan, you won’t know what to do. You will just be guessing.

If you don’t have the right tools and know how to use them, it will be a lot harder to build anything.

The Production Tracker is one of those business building tools.

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 your 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 tool and how they can help you build a successful construction business.

Average dollar amount of projects bid – This number (cell I-30) is just 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 are and how it compares with the proposed amounts. Like the average bid amount, this number tells you the size of projects you normally do. You can then make changes to what proposals you should 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 gives you a critical piece of information: knowing 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 will give you the number of weeks needed to do that work.

Projected date work should be done – This information (cell K-23) converts the projected time needed to do the work of the currently signed proposals (cell I-23) to a calendar 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 to be the most revealing and helpful when it comes to staying on target.

This information can increase a sense of urgency and focus. This information is critical to building a successful construction business.

I hope you’ve found this series on the Production Tracker, as a tool for building a successful construction business, helpful.

You can learn more about the Production Tracker by joining us for the Production Tracker Workshop at 10:30 AM CDT this coming Saturday, May 11th.

If you would like to know about some of the other business building tools we offer, take a peek in the Business Building Toolbox.

If you would like some help building your construction business check out the 5 steps here, or schedule a free 30-minute coaching call.

What’s Most Important as You Consider Doing a Construction Project?

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Isn’t That a Question That Everyone Would Like an Answer To?

Whether doing a construction project yourself or hiring it done, there are some questions you’ll need answered. These will include things like…

What is the problem(s) or issue(s) that need addressed?

  • It may be as simple as a door not latching or a window sticking
  • Maybe it’s some damage or wear i.e., rotten floor framing or water damaged window sash.
  • Could be the need of something to make life easier i.e., a ramp for a wheelchair, or an enlarged shower with a bench to make it easier for someone with physical restrictions.
  • Might be needing more space for a growing family i.e., a second bathroom, extra bedroom, or larger kitchen.
  • Possibly it’s a combination i.e., your existing deck is in bad shape and didn’t get used much because of the sun in the afternoon so a covered deck to replace the existing one.  

These questions are the starting point of a construction project.

The question about these questions, is where do you get the answers?

With the ease of access to information on the internet, people use this as their go to professional. The problem with this is, more often than not, that information is generic…and your project isn’t.

Every construction project is specific and unique.

With the exception of cookie cutter new construction, which is like going to a car lot and buying an already built house. Which there’s nothing wrong with but is not what most construction projects are.

I’m currently working with multiple customers asking the questions listed above. Let me give you some examples of why you need someone to help you find the solutions to your specific question.

A few weeks ago, I wrote about a project where a customer was looking for a contractor to repair some floor/wall framing damage and couldn’t find one locally. Currently we’re working to find the best solution. They probably wouldn’t find a solution to this specific issue on the internet.

Another example of the need for having a professional’s help is a window project that I was asked about.

This customer had a window that was put in in the early ‘90s and the bottom frame of the wood sash is rotting. They contacted the manufacturer’s retail store and met with a sales representative. The rep. told the customer that the problem was hail damage and all the windows needed replaced.

The customer received a quote for over $36,000 to replace these windows.

Having done other work for this customer before, they asked my opinion.

I agreed to give the customer a proposal for replacing the windows using the same windows previously quoted. My price was almost $10,000 less for the same work with the same windows.

This was before I even went to look at the project.

Having installed a lot of these windows over my career, I found it hard to believe that all of them needed to be replaced. So, I scheduled a meeting to look at the project.

After looking at it, I determined that of the thirteen windows originally quoted…only one needed replaced. All the others needed was some interior wood refinishing.

I haven’t got the proposal for this completed yet, but it’s going to be considerably less than $36,000. (I’ll let you know what it is, once it’s done)

This was a simple one size fit’s all solution that did not have the customer’s best interest at heart.

It takes experience, knowledge and a desire to help the customer find the best solution. To go beyond one size fits all.

The problem is…I can’t do this for everyone. There’s not enough of me to go around.

Just like a construction problem…

I’ll keep looking for the solution.

Here is the Million Dollar Question

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What if There Was a Way to Combine DIY and Professional Construction?

The question is probably more like a billion dollar one. The DIY industry is booming. It’s everywhere we look, TV commercials, internet ads, home improvement programs and online videos. There’s simply a level of pride that goes with doing things ourselves.

Why is the DIY industry so popular and prevalent?

That would be because the construction industry has let too many people down through a whole list of things. These problems certainly are good reasons to consider a DIY project. Here are a few other reasons you might think about doing your own construction project.

Price – is the number one reason for doing your own projects or being your own general contractor. Construction is expensive and the cost of professionals and general contractor’s markups are dollars saved.  

The important thing to consider is…

What are the dollars saved costing you?

As a professional I have witnessed too many DIY projects that have gone badly. The experience factor goes a long way to avoid problems. Depending on where you’re located, some construction actions require licensed professionals to do them. You probably wouldn’t stitch up your own gaping wound or represent yourself in court. Not that both haven’t been done, but they come with a risk. The cost of your time spent doing this rather than that, doing things over, unsolved problems or project disasters can be expensive.

The value of a professional often exceeds the cost.

Control – is another important issue that customers face. The construction industry has one of the worst satisfaction ratings. The only one ranked worse is the used car business. In too many cases customers have felt out of control. This makes it understandable why you would prefer to not deal with contractors. There is a comfort that comes from being in control of the project even with little or no experience.

Sense of accomplishment – is one of the best feelings that we experience. This feeling is especially connected with seeing a physical achievement. Stepping back and looking at something we built is satisfying. These are legitimate reasons you might consider doing your own construction project.

What if there was a way to do your own project while having access to professional experience, knowledge, and connections?

Wouldn’t this be great. This would be a win – win. If there was such a plan out there. What would something like this even look like? What would it include?

You might say, “There’s already services out there for connecting me with construction services. I can contact Angie’s List or Home Advisor.” The problem with these services is, the list of companies and individuals they provide to you, pays to be on the list. I know because they’re calling me regularly wanting me to pay dues and join. This isn’t the most reliable resource.

I’m considering something that would be more detailed and customizable. A service that would fit your individual needs. A mix of educating, advising, consulting. Something that would allow you to have your questions for your project answered.

This would allow you to “do it yourself” with the benefit of professional guidance.

As we research this service, we need your help. Give us your thoughts by taking this short survey or leaving comments below.

There Are a Lot of Construction Questions to Be Answered

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Cartoon man looking up at large question mark

 

 

 

So, Let’s Move on to the Next Ones on the List

 

I’ve answered 11 of the 21 questions asked by the scouts. The first eleven were answered in two separate posts, what are the best construction questions and construction questions about the physical process. Let’s see if I can squeeze the final ten in this post.


We’ll start with questions about types of construction.

 


Do you do more commercial or residential work?


I do more residential than commercial but do both. Commercial tends to be less relational than residential. I’ve always felt like the relationship between the customer and contractor is more than only a business transaction. In order to serve the customer well I need to get to know them. This only happens if a relationship is built. Commercial projects normally are more transactional.


Do you do more renovations or new building projects?


I do mostly renovations and remodeling projects. New construction is less challenging than remodeling. New construction has less restraints than renovations do. It takes more out of the box thinking to take an already existing structure and change it into something different. I love the challenge of finding a solution to these projects.


Do you build specially for earthquakes?


No. In this part of the country this hasn’t even been a part of the discussion up until recently. It still isn’t a big issue for local construction projects. If buildings are built up to the current building codes for our area, past tremors won’t be any reason to change this. Our focus should be on high winds and tornados.


How many permits do you need to build a new house?


This depends on where the building project is located, some places don’t require any. Normally there is at least one “building permit” for each project. There are also different permits for different areas of the project, i.e. plumbing, electrical, HVAC, etc. that are sometimes required. All permitting is determined by the local jurisdiction, so it is important to find out what the regulations are for the location where you plan to build before you start.


Have you ever built a tiny house?


Your definition of a “tiny house” will depend on how I answer this question. I have built three very tiny houses. None of these were built for living in, not that someone couldn’t have. The three tiny houses were built for playhouses but were more than a normal playhouse. All of them were built with the same construction as a full-size house…just smaller…a lot smaller.


Okay, I was kidding myself when I thought I could get all ten answered this week.


There are still five more questions. I will answer the last five next week. The remaining questions are about my education and my experience.


Those young people asked a lot of questions.

Round Three of the Construction Questions

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These Are About the Physical Process

 

This is the 3rd in the series of answering the questions asked by the Scout group. The first week we discussed the willingness of these young people to ask questions, unlike most adults. Last week we answered some basic construction questions.


As was the case last week, most often answers to questions need answers to other questions. With this being a one-sided conversation, I’ll answer these questions without having any specific answers to additional questions.


Do you hire the electrical/plumbing or does the owner?


This will vary on each project and will depend on the customer’s needs and goals, but as a general contractor I usually provide subcontractors. As an example of varying between projects, the owner of the project we’re currently working on is a retired electrician, so he’s doing the wiring on this project.


What equipment do you use most often?


I think the piece of equipment that I use the most often is a hammer. Some people would probably consider equipment as something motorized or powered. According to Collins dictionary, “Equipment consists of things which are for a particular purpose,” which would include a hammer. If you insist on only power tools being equipment, the second most used piece of equipment would be a cordless screw gun…there are you happy. 😊

 

Do you prefer to use more manual or electrical equipment?


Here we are again, manual vs. powered. I definitely “prefer” using electrical equipment or most any power tool over manual. Power tools make most tasks they’re used for easier. However, depending on the task being performed in some cases the manual tool is better suited and more productive. For example, you shouldn’t use a pneumatic nail gun as a hammer to drive a board into place.


How do you dig a foundation?


The size of the project will usually dictate how the foundation will be dug. If the project requires moving a large amount of dirt, for example a basement, then typically a large excavator (link) will be used. If it’s something smaller, we would most often use a mini excavator. (link) If the project is small enough or inaccessible to equipment then it could be dug by hand with a shovel.

 

 


These next three questions relate to the dangers of construction.

 


Where are the dangerous places on a construction site?

 

Everywhere on a construction site is dangerous. Sure, some are more dangerous than others, but heights are among the most dangerous. Falling is the number one cause of construction site injuries. Some other dangers on a construction site are; power saws, pneumatic tools, electricity, heavy equipment and cave ins of ditches.


How often do injuries happen?


This answer depends on how we want to define “injury”. Some people would consider a splinter an injury. For this answer I’m going to define injury as something requiring medical attention, i.e. stiches, broken bones, requiring a doctor’s attention, etc. During my forty plus years in construction I have personally witnessed or actually been injured 8 – 10 times. If I take that number of times over the forty years, that’s .000137%. As dangerous as construction sites are and as much construction that’s done, surprisingly it’s not as often as one might expect. The key is working smart and safe.


Have you ever broken a hard hat?


This is one of the most interesting questions asked and easiest to answer. I can answer it with a resounding NO. This is not to say they can’t be broken, but it takes a lot to break one.

 


There are still several questions left to answer so next week we’ll look at types and specialty forms of construction.


If these questions raise additional questions for you, send them to us in the comments below and well answer them.

 

What Are the Best Construction Questions?

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Neon question mark written in the dark

 

 

The Ones That Are Actually Asked

 

 

Last week I shared the list of questions asked by a group of Scouts. This week I’ll begin to answer them.


As I pointed out last week, due to the number of questions I’m going to divide them into different topics to keep the posts from getting too long. This week I’ll start by answering some basic construction questions. Keep in mind that asking and answering questions is communication and communication is a two-way process. This means that before I can answer questions fully and accurately, I need some questions answered.

 


How much does building a new house cost?


This is the most common first question. It only makes sense; cost is a critical part of deciding whether to build. It’s also one of the most difficult to answer, especially when asked without any specifics.


Here are some of the questions that need answered to determine a price:

  • Where will it be located? – location effects things like utilities, sewer, lot preparation, zoning, permitting, etc.
  • How big? – more square feet costs more.
  • How many levels? – stacked is typically less expensive per square foot.
  • Type of foundation? – slab, crawl space or basement.
  • How high are the ceilings? – higher is more expensive.
  • What style of roof? – more complicated costs more.
  • How many windows? – more windows cost more.
  • Quality of materials and finishes? – there’s a wide variation in quality which translates into a wide variety of price, i.e. cabinets, countertops, flooring, light fixtures, plumbing fixtures, etc.

 

This is some of the things that need to be determined before getting an accurate price.


As a vague answer to a vague question, in the middle part of the US where we do construction, you can figure an average home to cost $110.00 to $150.00 per square foot of living space.

 


How long does it take to build a new house?


The answer to this question will be directly connected to the answers of the last question. Size, design, level of finish, etc. will all effect the length of time to build a new house. An average 2000 square foot home will take 6 – 9 months.

 

 


How much wood does a new house take?


Once again, the answer is going to depend on specifics of the house. Let’s just answer the question using the average 2000 square foot house that we have been using. Let’s assume that it’s going to have wood floor joists, sub-floor, wall studs, wall boxing, ceiling joists, rafters, roof sheathing, siding, windows, doors, cabinets, etc. All these things combined will be around 40 pounds per square foot. That means the wood used in a 2000 square foot house will weigh around 80,000 pounds, or 40 tons.

 


How much steel goes into a house?


There are some cases where houses are framed using steel, but typically that’s not very common. There are some steel things commonly used, like nails, screws, joist hangers, reinforcing steel in concrete, etc. Sometimes steel beams and posts are used for supporting heavier loads and wider spans. In a typical wood framed house, it takes around 10 pounds of steel reinforcing, fasteners and misc. per square foot to build. This means that our 2000 square foot wood framed home would have around 20,000 pounds or 10 tons.

 


Next week we’ll answer questions about the construction process. If you have any construction questions you would like answered, asked them in the comments below.

 

 

What Is the Cost of Cheap?

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The Importance of Knowing What You’re Getting, Before You Write the Check

 

Too often people decide to move forward with a construction project without asking the right questions. It is important to get the answers before you start. What is the purpose or reason for the project? Who is going to do the work? What is it going to cost? The answers to these questions will have significant impact to your satisfaction (or lack thereof).

The number of horror stories that I have heard from customers about previous construction experiences is unacceptable. A construction project is a big investment and should be a fun, exciting and dream fulfilling incident.

Just recently I served as a professional witness in a small claims trial between a home owner and a contractor. Both sides had valid arguments, but the whole problem could have been avoided with better communication. The project was started without any written agreement. It was destined for problems from the very beginning. The contractor didn’t get paid for some of the time they had spent working. The home owner had to hire someone else repair some work that had been poorly done. They both had to pay court costs and neither won their case. When the trial was over it cost both parties more money, more time and more heartache.

Cost is so much more than just dollars. It is also time, contentment, enjoyment, etc. Remember…ask the questions before rather than dealing with problems after.

 

  • How much is it going to cost? – It amazes me how often projects start without this question being answered. I understand that it requires time, experience, and commitment from a contractor to prepare this ahead of time. Just like in the situation above, starting a project with no agreement, no clarity of what the project consists of, just a verbal hourly rate, leaves too many unanswered questions.
  • What is the purpose of this project? – Why am I considering it? What is the reason or reasons I want to do it? It may be the need for extra space for a growing family. It might be to fix some problems or issues; leaking roof, sagging floor, unsafe wiring, lack of insulation. Maybe it’s just because you would enjoy a nice new kitchen, a man cave, a walk-in closet, an attached garage or a nice new deck. The list of reasons can go on and on. The important thing is to get clear on the reason(s) before you start.
  • What do I want in a contractor? – This is an answer that will be as different as the people asking questions. Your preferences might be quality, personality, integrity, price, etc. The important thing is for you to decide what is right for you before starting the project not after.

“Is there anyone here who, planning to build a new house, doesn’t first sit down and figure the cost so you’ll know if you can complete it? If you only get the foundation laid and then run out of money, you’re going to look pretty foolish.”

Luke 14:28-29, (MSG translation).

There are many factors to consider and questions to answer when doing a construction project. If you do it before, it will make the whole experience better.

What questions do you have that need asked before you start your project?

 

Here are a couple of other posts that you might find helpful

Six Ways To Find Your Right Builder

To Hire or Not to Hire, That Is the Question?