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How to Build a Successful Construction Business Without a Master’s Degree

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Building a Successful Business Doesn’t Have to be Slow and Painful

The majority of small and medium sized construction companies have the construction part figured out but get overwhelmed by the “business” side of things. Most of the people working at these companies learned a trade…not how to run a business.

Like me, most started doing business full of enthusiasm, having no clue what could go wrong. I had no clear plan or system for running a business.

Trying to balance construction projects and running the business can be overwhelming.

I had no idea how to do a proposal, a production budget, or accurately invoice a customer for progress payments. No one told me I should set money aside for things like taxes, tools, or emergencies.

One day I looked up and wondered how I got here. I liked building things…not necessarily running a business. As I built my business, I learned these things, but it was a slow and painful process.

The truth of the matter is…building a business doesn’t have to be slow and painful if you know how.

Think about it, a traditional trade school education will cost between $7,000 and $40,000. It’s been my experience that a real-world, hands-on education is worth even more. Often classroom education doesn’t translate well to the construction site.

Early on in my construction career, I was working for a local house framer. On a couple of different occasions, he hired some young men from the community college’s construction program, for summer help. After a few times of doing this, he stopped.

He said, “It took longer to unteach and reteach than it did to start from scratch.”

Looking back, I now realize how valuable that hands on education was. I just wish I’d had someone teach me the business part.

Instead, I got my business degree from HKU, also known as Hark Knocks University. And let me tell you, the tuition is high and it takes a long time to graduate. What’s an education like that worth?

Wouldn’t be great if you could get 40 years of experience without having to wait 40 years to use it?

You can!

This is what we’re doing a Solution Building. We are taking those 40 years of hands on, trial and error education and making it available to other contractors through programs, trainings and downloadable tools.

One of these tools is the Blueprint for Building a Better Proposal system.

This proposal system allows for the preparation of proposals that communicate clearly and accurately with customers, while allowing for increased profitability. It will give construction companies years of advantage over the competition for a lot less than the cost of a traditional education.

Currently this proposal system is available at a Holiday price of $497 plus some additional bonus templates through the end of the year.

Education vs. Regulation

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How Learning Can Benefit Both You and Your Customer

 

Recently I was working on a small ceiling repair project. It was one of those simple projects that turned a bit more complicated. Due to city building codes and the lead based paint regulations this small $1600.00 project was going to end up doubling in price.12236333666_3c5a6a5cd9_o

The project consisted of removing the balance of some water damaged plaster and lath, approximately 108 square feet. Lead based paint regulations require the removal and cleanup be done by a certified lead abatement contractor if the work exceeds 100 square feet. This isn’t about lead based paint regulations. That’s a topic for another day. The issue that I want to discuss is what this requirement caused. Due to the lead paint abatement, a building permit was needed. No problem. I pulled the permit, the demo was done by a certified lead paint abatement contractor. New sheetrock was installed, finished and painted. A new ceiling light fixture was hung. Everything was looking great and I called the inspector to come do the final inspection. This is where things get a little bumpy. The inspector asked about smoke alarms in the upstairs bedrooms. We check and find that there aren’t any. By code in this jurisdiction if a building permit is pulled for a remodel and there aren’t interconnected smoke alarms, they have to be installed. This meant we had to install a smoke alarm in each bedroom and a smoke and carbon monoxide alarm on each level. All of these alarms need to be hardwired together. Don’t get me wrong, this is a great idea. If they’re asleep in the upstairs bedroom and there is a fire in the basement, then all of the alarms will go off. The problem is…this is an old two story home with a basement. Have you ever tried to get electrical wire from one level to the next in an old house? If not, trust me it isn’t easy. All of this because we were a few square feet more than the minimum. Regulations can be a real problem and in this case expensive.

For a long time, I thought that licensing of contractors was just another way for the government to make more money, not to mention an additional cost that I had to pass on to my customer. More rules and regulations that allow some bureaucrat to stick their nose in someone else’s business. Like they really know what’s best for every customer. Regulating continues to expand and I don’t expect it to get any less any time soon. The problem is that not all contractors approach things the way that I do. There are a lot of “contractors” out there that don’t care about the customer or are just unaware and/or untrained. These are the guys that have made it necessary to have some level of protection for the customer. It would have been easy enough for me to have divided this project in to two separate projects and these rules wouldn’t have applied. This isn’t how I do things.

Okay now for the real point of this rant…I mean blog post.

I’m all for the protection of life and property. The question is, how is this best achieved? I think that education is as important as rules and regulations, maybe even more so. If both contractors and customers are better educated it could help decrease the need for regulations. Education allows for the understanding of the reasons. Just like the project above, understanding the benefits of the connected smoke alarms makes sense. It should be up to the customer if they think it is worth the cost.

One problem with regulations is that there are so many that it is difficult to keep up with them all, especially for those people not involved with it regularly. Not every situation can be regulated. I think when we over regulate in an effort to protect we make it so people no longer need to think for themselves, because someone else will.

Back to the interconnected smoke alarms of the project above. With some research by an electrician and working with the inspector we were able to find some 12-year battery powered alarms that are interconnected with a radio frequency rather than hardwired. This not only met the regulations, but also met the intent. It gave the customer the protection needed and kept the additional cost to the customer from getting out of hand.

By working together, the customer, electrician, inspector and myself came to a reasonable working solution. Not all builders would have put forth the effort to meet the required regulations while looking out for the customer.

Another class in the ‘school of hard knocks’ completed with a passing grade.