Saturday, December 31, 2011

Six Resolutions For a Better Construction Business in the New Year

Every year at this time we tend to make resolutions to improve our lives and businesses. These are important decisions and determinations that we hope will stimulate us to improvement. Of course, you may very well have made New Year's resolutions in previous years, and yet before January was out you have already given up on them.

That's not going to happen this time, because in this article I'm going to provide you with a sharper focus.

As a specialist in showing contractors how to significantly improve their construction businesses, working with hundreds of you and seeing at close hand the problems you needed to overcome in order to become successful, here are SIX that we all need to work harder on resolving in our businesses.

  1. Remove all debt. Debt is a terminal disease, and like a cancer, you need to remove it from you businesses and lives. Starting this year, make a concerted effort to pay down all debt. To get started, list out on a piece of paper all your debt. Next, develop a plan to pay it down or negotiate terms you can work with. Third, do everything in your power to funnel any available funds to paying it down. If you save money on what item, take that 'extra' money you saved and pay it towards your debt. Make a genuine effort and you will be rewarded because then ... and only then ... can you focus on resolution number 2.
  2. Save cash. Cash is always king. However, if the economy changes for the better, you will need cash to fund your work. Sit down and establish your Capital Requirements and plan how you can set aside enough cash to manage your business if work comes your way. Another consideration is how long it takes you to collect your receivables. Whatever this is, one month, two months or more, make certain you have enough cash on hand to fund your operations. You should also make the same effort in your personal lives.
  3. Build a budget. You wouldn't attempt to build a project without a set of plans, would you? Hope not, so why would you try and build a business without a budget? A budget is your plan on producing sales and controlling expenses in order to produce a profit or desired end-result. I suggest you start by putting all of last year's spending on a spreadsheet, including sales for each month. Then take a hard look at them. Is there anything that you could improve? This exercise helps you to develop a good, tight budget for the upcoming year. Try it!
  4. Organize your office. This is one that really helps. We spend a lot of time in our offices. A clean, well-organized office improves our outlook, makes us feel better and automatically increases our productivity and creativity. Here is how you can start. Take a look aorund you. Can you better organize your desk, files, office equipment to help you? I bet you can, try it! Don't you feel better already?
  5. Develop a cost effective marketing plan. No business can survive without customers and sales. That means marketing in order to drive sales to your business. Spend some time and find out which one of these four 'things' are specific to your best type of customer. What is their need, desire, want or problem? Now, how can you provide them with a service or product that satisfies them? Remember, these are emotional triggers that 'make' your customers buy. Next, how can you get that message out to them in a cost-effective manner? Work on that. Do you need to spend some time handing out flyers in a specific neighborhood? Do it. Do you need to write a dynamic sales letter and send it to your propsective customer type informing them that you have what they want? Do it. Plan and do, it is as simple as that. In time, you will start generating leads and then turning them into sales!
  6. Find peace with yourself, your family, friends and your God. Many people think that it's only marital difficulties, business or financial problems that affect our lives. That's not true. Not telling our love ones that we love them, that we care about them and need them, as well as our God has a profound negative impact on our lives. The same goes for helping those in need. As Americans, our biggest asset is our willingness to extend a helping hand to those in need. I myself give a gift card  from our local supermarket every week in our church's poor box. Not too long ago I was standing in the checkout as a young mother with food and her babies in hand was paying for her groceries with gift cards. I don't know if any of them were from me, but I felt good knowing her children wouldn't be going to bed hungry. That good feeling makes it worth the effort.
These 6 Resolutions for the New Year - seven if you do them - may seem overwhelming or not, but they do work together to make for a better business and life for those that do them.

Monday, December 19, 2011

How to Navigate This Stagnant Economy!

With all the uncertainty in the economy, here are some tips to help you survive and thrive.

Tip #1: STOP Reading and Listening to the News and Media. Accept where you are right now, and focus on your business and family. They need to come first. No one, including the government is going to step up and bail you out. No one is going to give you a magic wand, or pill that will make things better. You are going to have to do it yourself, and the sooner you get started, the quicker you can get things moving in the right direction.

Tip #2: Slash Your Debt! Cutting back and eliminating debt is the first objective. Cut back on your expenses, steer any additional money towards paying off the old debt. You can't survive with the hangman's noose of debt tightening on your throat, and choking the life out of you. Trim the fat or unnecessary spending to make this happen.

Tip #3: Increase Your Productivity. Take a look at your day and ask yourself: "How can I get more done out of my day?" In a down economy, you'll have to do more yourself, and you cannot allow your day to be stifled by the unimportant things. You will have to make more phone calls yourself. You will have to do more tasks yourself. Times are tough and when you can't afford the luxury of hiring people to do these things for you, you'll need to organize your schedule to be more productive.

Tip #4: Save Cash! The banks aren't lending. Money is tight. You'll need to fund your operations yourself. Start saving money after you've paid off your debt. The sooner you can become your own banker, the sooner you can start getting back on your own two feet.

Tip #5: Remember Your Customers! This is important. Start developing a great economical way to keep in touch with past customers. Two things are possible from doing this. One, they may decide to buy some more of your construction services. Two, they may have a friend or relative or someone else they know who has a need for your services.

Tip #6: Find Out Why Your Customers Buy From You. Not everyone buys from you. That means that the ones that do are a powerful resource for you. They can help you figure out how to get more them. Sit down and write a set of revealing questions, some really hard questions as well. Uncover what they like and didn't like about working with you and your company. You've just uncovered some great things to build on and things that need your immediate attention in correcting. Better yet, you've got some powerful research material for Tip #7!

Tip # 7: Discover How to Drive Business to YOU! Marketing your business is a key skill you need to learn and develop. Marketing drives sales to your business. Anyone can master it. In my own businesses, marketing is what brings in the sales, not me, my name or anything else. The same goes for your business. Not sure how to get started? Would you be willing to spend less than $45 to get your hands on how? One sale is all you need and the others are strictly gifts from the gods. Buy this book and get started. "How to Market & Sell Your Construction Services Like Magic!"

Bottom-line is that this economy is going to be with us for a while. Waiting for this economy to bounce back will do you and your business more harm than good. You can't afford to wait it out. Start doing the things that will help you survive and thrive and in themselves will make things get better.

Thursday, December 15, 2011

My Christmas Message to America

Dear America:

Times are tough, and things could always be better. Do not allow your hopes and dreams to be buried by the skepticism of today. Things always get better when you feel they are at their worst. Remember, all minds, whether they be men's or children's, are little. In this great universe of ours man is a mere insect, an ant, in his intellect, as compared with the boundless world about him, as measured by the intelligence capable of grasping the whole of truth and knowledge.

In our lives, we will make errors. Things will go wrong. Times can be difficult, if not a strain on our collective will. However, if you believe, if you can dream, if you can correct your errors, you can make all things better. The most real things in the world are those that neither children nor men can see. It starts as a dream, a mere seedling, then it sprouts into a vision and with the proper care and nourishment, it grows itself into a reality.

Things will get better, and things will change, as soon as you decide to correct the path you are presently on. The greatness of you has yet to see the sunrise of all ages. You have only begun to advance the innovations that man can create. Let no man or ideology put you down. Let no one diminish your future. Let no one snuff out your dreams. Stand up; believe in the truths of your Founders. Repair and make strong the foundation of your Constitution. Defend your Bill of Rights, and most importantly, adhere to your values and principles. They are the thread that holds you together.  

You may tear apart that which weaves you together, but there is a veil covering the unseen which not the strongest man, nor even the united strength of all the strongest men that ever lived, could tear apart. Only faith, charity, and believe can lift the veil and reveal the greatness that belongs to you as a people and country.

You are the shining city on the hill. The beacon that those less fortunate search for in their darkest hour. You are the rock that mankind will stand tall upon to free all men of all nations and guide them to be free and self-governing for themselves. It is your principles and values that the wicked will always try to corrupt. Use these values and principles to defend yourself for they are your shield.

Consider and fear the natural tendencies of the iniquitous to oppress people. Prevent them from doing their evil. You have shown all men; that man can rule themselves, he needs no master, since only God gives us our inherent rights. It is up to you to preserve order and be prosperous as a nation. You are that beacon that shines the truth for all mankind.

In the words of a great believer of America, "Ask not what your country can do for you, but what you can do for your country!" Our strength is within ourselves as a people united in our fundamental rights transferred to us by our Founding Fathers.

God Bless America!

Tuesday, December 6, 2011

The Truth About Markup

If you're using a markup rate that you found or heard of, you are probably leaving precious hard-earned money on the table!

The truth is, many contractors have no clue on what their markup should be. They either use a guess, or some "number" they read or heard about.

Markup is derived from carefully calculating your costs and the amount of money you want to earn as profit at the end of the business year.

Costs must include all your field expenses and your overhead amounts. In your overhead, you MUST have a reasonable salary for yourself. If you haven't ever included it, then you are shortchanging yourself.

If you never realized this before, realize it now. Overhead is a 'burden.' It doesn't make a profit and should be lean and mean, but still does the job of administering your field operations.

Working for the draw

Too many contractors work for a draw. What I mean is this. If you have any money left over after paying all of your bills whatever is left is your salary. This is the wrong approach!

What you need to do is include a reasonable salary for yourself in your overhead amount. This is commonly called "Owners Salary." If you often work out in the field, taking the spot of a hired worker, then you would cover your salary in the estimate to do the work for the amount of time you would be working on the project. The difference of time when you are working in your office doing estimating or administrative duties, would be covered in your reasonable salary in overhead.

If you are not including your own reasonable salary somewhere, field or overhead, your markup is shortchanging you!

Making a Profit

As a business owner you have an obligation to make a profit. Profit is not a dirty thing. You need profit to grow your business, market your services, carry you through difficult times, and take care of your customers.

What is the right profit amount? I hear this often from contractors. Years ago, many in the industry thought making 10 or 12% was a good thing. I suspect that if you can make more, go for it. As long as you make it legally and morally correct there is nothing stating how much you can make. The truth is, right now we are in a difficult economic time for some, therefor, making whatever you can is probably the best answer.

This is an important subject that as a business owner you must get a proper handle on. This is a business skill you must learn and master.

The bottom-line is ... your markup must cover your expenses, provide you a reasonable salary and make you a profit.

If you would like an invaluable resource, check out my book on markup. It has sold over 10,000 copies and will easily guide you through the process. It is also a down loadable product that will pay for itself quickly. Click on "How to Calculate Your Money-Making Markup!"