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.

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.

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!

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!"

What did you say? (A simple secret to closing more deals)

Have you ever been in a sales situation where the prospective client is listening and you're feeling you've got the deal, but you still lost the job?

Over the years, I've sat through a number of sales presentations where the contractor spend most of the time talking about themselves. They talk about their years of experience, the jobs they have done, how wonderful they are, but never do they listen to the client.

Talkers are those who measure the value of their conversation by how much they talk about themselves. They never run out of things to say about themselves, and they never listen.

If you want to close more deals you must do these two things.

1. Focus your attention on the needs of the client. Remember, it's all about them, not you.
2. Ask revealing questions and don't be afraid to drill down with more questions.

People buy for emotional reasons. Those reasons are:

• They WANT something.
• They NEED something.
• They DESIRE something.
• They seek a SOLUTION to their problem.

They resort to low price when they can't satisfy their emotional reasons. With that thought in mind, focus on them, ask revealing questions and dig deeper to get to their bare bone emotions for seeking your services.

The secret to closing deals is to ask questions and listen.

How to Squash Your Fears and Worries!

Two of the greatest executioners of success and achievement is worry and fear. Both work together in retarding your progress and creating inaction just when action is really needed. You are not born with fear. It is instilled into your very being by those you love the most. They teach you fear out of their concern for your safety. How often have you been told not to do something, or else it will hurt you?

When you were little, did you ever have your Mom tell you not to run out into the street because you might get hit by a car? The truth is, lots of people run, walk or whatever into the street and never get hit by anything! Instead, your Mom out of love for you instilled fear into your being in order to protect you.

Our Moms, as well as others, meant to teach us caution and good common sense, but instead instilled fear. Caution is a mental process; while fear is a destructive emotion.

Fear is also extremely dangerous because it produces a 'reaction' of automatic avoidance. By enacting 'avoidance' we sabotage our dreams and goals. We inadvertently avoid achieving them. Fear creates a brick wall between you and your destinations. To achieve your goals and dreams, there is no doubt that you will continuously face the things you fear. This gives you a choice. Give up on your goals and dreams, and settle for mediocrity, or face your fear.

In everything, you do, business or personal. You must always sail in uncharted waters, doing things you may have not done before. The longer you hold onto your fear, the more likely it is that you will never reach your destination. You'll find yourself taking the longest route possible, missing opportunities just so you can avoid your fears.

Worry involves the concern about the outcome of future events that have not occurred, and may never occur. It is a mental, negative and destructive energy working in our minds. It is highly focused and a projection or conjuring into the here say of an unknown future event or prophecy. Since your only point of power is in the present, worrying renders you useless because it perpetuates inaction. Since only action produces results, worrying produces inaction, which doesn't produce, create or change a thing.

This means two things. Worry can happen at any time, and even for something that may never happen, since it is always about an unknown future potential or possible outcome. Worry is the process of creating potential negative outcomes. Worry creates nothing, decides nothing, and accomplishes nothing. Worrying is crippling because it projects your mind into an imagined negative future where your imagination is allowed to run away from your reality. To eliminate worry, focus your attention on something in the present moment, something positive going on right now. When you focus on something positive, there is no room left in your mind for worry of any negativity.

Fear, unlike worry, is an event-triggered emotion, and this makes it even more crippling. Fear happens when you are faced with a set of circumstances in which you are both directly and currently involved. If you've ever attended one of my seminars, you have often heard me speak about being frozen in your tracks like a deer on a country road at night looking into your headlamps.  Fear does not happen unless you are in the proximity of the circumstances you fear, and since you will always be confronted with something that creates a fear for you, confronting the fear head on is the only solution of dealing with the fear.

To succeed in reaching your dreams and goals in the shortest time, to overcome your business and personal setbacks, you must be willing to constantly and consistently confront the things you fear. By confronting what you fear, fear begins to lose its control over you.

The Perfect Formula for Failure

It was hot. The summer heat was in full gear. While sitting at the lanai table, sipping a cold beer, the wife spoke to me. "Honey," she said, "I'm afraid we need to tighten our budget."

"Not again," I replied. "Yes" she said, "another one of our neighbors is in financial trouble."

"Who?" I asked. "The Logans, down the street," she said.

"Hmmm, how?" I asked. "They over spent, living outside their means, they're upside down in their mortgage, and now they've lost their jobs, and the bills are due." she said.

"What has that got to do with us?" I asked. "Well," she replied "The President and the board of the homeowner's association voted in an amendment that says that if any of the members of the association get in financial trouble, the rest of us will pay their bills."

"But didn't we help out the last time?" I asked. "Yes, but that was for the Jones and Legots, they both had financial trouble and still do. As a matter of fact, we have to come up with more money for them too," she replied. "Now, the Logan's are in financial trouble, and I hear the Boors are also." she said.

"That sounds unfair. We have bills to pay too." I said. "I know sweetheart," she said "But the homeowner's President says that since you are working, and they're not, it is only fair that you pay for them. He called it re-distribution, social justice, or something like that."

"Why can't they get some kind of a job?" I asked. "Because the jobs are paying too little," she said "And they claim it is beneath them to work for such little wages."

"Hmmm," I thought and then said. "Sweetheart, are the remainders of the families okay with this?" "Well," she said, "They're all in trouble too. In fact, the association is also going to ask us to help out them as well, you know, for the good of the neighborhood."

"Eghads," I said and groaned, "It isn't working. We'll end up with nothing trying to support those who don't want to go to work, or foolishly got themselves in financial trouble. The entire neighborhood will be draining our checkbook dry!!!"

The wife just shrugged.

"When do we elect a new President and Board?" I asked. "Not for two years," she replied.

"Sweetheart," I exclaimed, "This is the perfect formula for failure of everyone in the neighborhood! It is time to sell and move to another neighborhood where we can work and keep our earnings for our self."

Think about it.

An Industry in Flames!

In the next 12 months, more contractors will go bust trying to wait out the economy, all while an inept President tells us he is creating jobs and  that the economy is well on its way to recovery.

With an economy that is in shambles, with millions of homeowners stuck in homes worth less than they owe in their mortgages, with the value of the dollar plummeting, with trillions of dollars spent and wasted by an uncaring Democratic controlled Congress in cahoots with its socialist President, and an unemployment rate that is double what a lawless administration is telling us. Things are not good!

In no uncertain terms, we are in an Industry that is engulfed in flames.

Just in housing alone, total housing construction over the previous decade now barely exceeds the lowest level of any ten-year period in records dating back to 1974.

Americans who worked hard, did the right thing, have seen the value of their homes fall through the floor, and their equity lost.

Without the rapid deployment of the housing inventory, things will be dismal for years to come. Even with the all wonderful supposedly going to make things better 2010 home buyers tax credit, we are left with the stubborn stench of no work.

Public work and commercial work isn't any better.

Which brings us to jobs. You can't have a recovering economy when so many are without jobs. You need JOBS to turn-around this economy.

And, let's talk about the so-called millions of jobs this alleged administration says it created.

It's pretty pathetic when ONLY 83,000 new jobs are created and 50,000 of those jobs were created by McDonald's. What does that tell you?

The real unemployment rate is around 18 million. If you consider the owners of small businesses who are unable to take a paycheck, it could be 25 million. Which means that even common sense or the Occam Razor dictates that the alledged jobs the Administration claims it created are fake and phony. Even with 500,000 new jobs a month, it will take three to four years to get everyone back to work.

The so-called shovel ready construction jobs that the stimulus was supposed to create, ended up being non-shovel ready. Another bust for a President who hasn't a clue what makes the economy work. However, that hasn't stopped him from joking about it. Rather pathetic if you ask me. Millions of Americans out of work, finacially strapped, and struggling to get through their day, and he jokes about it.

Mr. President, you can't cut off the two legs of the economy at the knees, and expect things to go well. Unless, you don't want it to go well. Raises an interesting question, doesn't it?


Anyways, about the two legs of the economy.

Those two legs are the manufacturing industry and the construction industry. They are the Achille's Heels of the economy. They employ the majority of people.  It’s the businesses that innovate and produce goods that consumers value that make America’s economic engine run. That means NO GOVERNMENT!

Never mind giving millions and billions of tax payer's money to companies that go broke or use it to create jobs in China.

Never mind "GREEN JOBS." Green jobs are a hoax. Green is too expensive and if no one has the money, they can't afford to go green. Green is dead on arrival. Just like the Chey Volt, it has its problems, one too many to be truthful. This clown just doesn't get it. People buy what people want, not what you want to force upon them!

Never mind pandering to the unions. I was a union contractor and I never found a union that GAVE a worker a job. Every week, it was I who signed their paychecks, took the risks and got the work. I've negotiated seven union contracts in my career, and all I ever heard from the Union side of the table was: "You've got to give us something to take back to our members, or I'll lose my next election."  It's time to eliminate the unions, especially from the public sector. They want too much for too little, and they're destroying the free market with their demands, and lack of productivity.

Never mind blaming Bush. Mr. President, man-up, you own this mess, and you created it with your socialist policies, rules, and regulations.

Never mind black balling the banker's, they're only human. They didn't cause the housing bubble to bust. Jimmy Carter, Bill Clinton, Barney Frank and Chris Dodd orchestrated that debacle.

Jimmy Carter started the fall with the Community Reinvestment Act, forcing banks to lend to uncreditworthy borrowers, mostly in minority areas.

Instead "common sense," age-old standards of banking prudence got thrown out the window. In their place came harsh new regulations, requiring banks not only to lend to uncreditworthy borrowers, but to do so based on race.

These well-intended rules were supercharged in the early 1990s by President Clinton. Despite warnings from GOP members of Congress in 1992, Clinton pushed extensive changes to the rules requiring lenders to make questionable loans. Thank you Bill Clinton.

Lenders who refused to would find themselves castigated publicly as racists. Federal bank regulators scrutinized financial firms' books to make sure they were in compliance.


It was economic cannibalism


By the name of diversity, banks began making huge numbers of loans that they previously would not have. They opened branches in poor areas to lift their CRA ratings.

Meanwhile, Congress gave Fannie and Freddie the go-ahead to finance it all by buying loans from banks, then repackaging and securitizing them for resale on the open market. Thank you Barney Frank.

That's how the downfall began.

With those changes, the sub prime market took off. From a mere $35 billion in loans in 1994, it soared to $1 trillion by 2008!

We have no one to blame but the liberals!

Once government institutes such economically destructive laws in perpetuity, the destructive snowballing begins. Big government, Keynesian economics, liberalism and socialism do not work. Never have and never will.

Ironically, it was President Bush in 2003 who tried desperately to stop Fannie Mae and Freddie Mac from metastasizing into the problem they have since become. Today, Fannie Mae and Freddie Mac hold the taxpayers liable for over $20 Trillion in loans.

To make matters worse, it wasn't the Banking Industry that got hurt by all of this perverted regulation, they got a bailout, it was the Construction Industry ... you and me!

To turn this economy around, we the people need to take action!

1. We need to elect responsible people who are not afraid to make the tough decisions, willing to balance a budget, tackle entitlements and deal with  the deficit. We do not have a revenue problem in this country. We have a government SPENDING problem!
2. We need to flush the liberal agenda down the toilet and get rid of it forever! That means not only in our political representatives but also in our school system.
3. We need term limits with a descriptive authoritive as to what they can and can't do. No more career politicians who vote themselves a big raise and huge entitlements. It's the people's money and we should decide, not them!
4. We need to eliminate the Seventeenth Amendment. State senators need to be determined by their state legislatures and the State should pay their wages and expenses. Why not? They represent the state's best interests.
5. We need to make English the ONLY official American language. Can't speak it? Learn it like our forefathers did. Otherwise, stop discriminating against us Americans, who speak other languages!
6. We need smaller government and less regulation. Give back the State's Rights.
7. We need to protect our borders and face the truth. Illegal means ILLEGAL!
8. We need a plan from a strong President, whom WILL turn this country around. No more talk, no more lies, no more false hope or changes, and no more rhetoric!
9. We need a plan to turn the housing market around. Sensible loan procedures, the fazing out of Fannie Mae and Freddie Mac. No more bail outs for anyone. Run your banking business like a business or silently go out of business, just like we have to do!
10. We need to STOP pitting one American against another. Eliminate the Progressive Tax Rate and the IRS. A 65,000 page Tax Code? Give me a break. Institute a flat tax with no loopholes for personal or business. It is way past the time that big companies like GE start paying their fair share of taxes!!!
11. We need to re-think entitlements. Unfortunately, no one likes to talk about entitlements. Furthermore, unfortunately, they are taking this country down the tubes. I'm not saying eliminate them all, there are some needs that need to be addressed, but it should be done at the State level.
12. We need to eliminate ObamaCare. I don't know about you, but any program that has to have so many waivers, can't be good. Any program that "GUTS" Medicare by $500 Billion can't be worth the paper it is written on. Yet, they continue to lie telling us it's the other plan that will hurt Grandma. Honestly, for me, the Federal goverment should not be in the business of health, education, welfare, retirement, agriculture, housing, and food stamps. Did I miss anything?
13. We need a Congressional Rule that says if you can't write a pending bill on less than four pages, we don't need it. No more of we have to pass it to find out what's in it!
14. We need to stop pandering and throwing taxpayer's money to foreign countries that do not have our best interests at heart.
15. Eliminate the Fed and its printing policies. QE 2 went to prop up foreign banks!

The truth is this, the Democratic Congress and their President gave away $5 trillion in taxpayer's money that they wasted (actually gave it back to themselves through their political cronies) and added to our deficit, the greatest spending spree in the history of the country. Had they given it to each and every taxpayer instead, they would have enriched the economy by $450,000 per taxpayer. Now that would have stimulated the economy!

Meanwhile, what about you and your construction business?

The reality is that your business strategy must change, or you run the risk of going out of business. It really is that simple. Everything around you is changing, either you and your business change, or you will be left behind.

Things will not go back to the way they were four or five years ago. Things are still doing. Money is conversly being spent, there are even at the same time some customers, but not as many and a different customer than you had before. You can't wait for your phone to ring!

Doing nothing right now is the worst business strategy to adopt. Face it, the economy has changed—not for better but for the worse. There is no recovery, never has been, that is a lie. Things may even get worse. However, things can change. A recovery is in our future, maybe after the election, and things can change quickly. Never let your trust in the American spirit to bounce back leave you.

Meanwhile . . .

Don't sit back, don't wait for that next job to come to you, get out and find it for yourself. You can do it!

The lack of action by many in the contracting community ensures that a business death for those not adapting is a certainty. I don't want it to be you.

Things That Kept Me Awake At Night As a Contractor

When I first started my construction business in the 70's, I was young and full of hopes and dreams. What worries could there possibly be?

In a short period of time, I learned that life has its complications. Around every corner is an unknown. In this short blog, I hope to help some of you to discover the steps that helped me improve my construction business.

Like many of you, I started my business with a little money and a pickup truck. As a matter of fact, I didn't even own any tools.

After completing my tour working in the Middle East, I came home sick with viral pneumonia, and a small amount of cash saved up. After three weeks in the hospital, I contacted my friend and had him incorporate my business. When that was done, I had my business cards printed, and I was now a contractor . . .  so I thought.

Weeks without work, banks not excited about extending a line of credit for me, and surety companies telling me I was too young, left me without work, a slow drain on my cash, and dreams slowly being shattered.

That was the first thing that kept me up at night, worrying about not having work.

This brought me to lesson number one. Never wait for things to come to you, get up and get out and capture them for yourself. From that, I learned how to market my construction services. I also learned PR and used that very effectively to promote my business. Even in the most dismal of times, this two business metrics helped me to survive and thrive.

With work in the pipeline, I soon experience the next 'thing' that would keep me awake at night. MONEY!

You see. Your business survives on cash. Reality is, it is a cash eating machine, and if isn't controlled. It WILL eat you out of house and home.

That brought me to lesson number two. Understand your financial metrics.

My Dad was a successful contractor himself, and with a degree in Accounting, he taught a very valuable lesson. The real 'money' is made in the business end of the business, not in the contracting end.

What did he mean?

Simply put, you can make money in the contracting end, but if you do not understand and control the business end, the money will disappear through lack of control. You need to learn and control your financial metrics!

Once I mastered my financial metrics, I was making money, real money. My competitor's couldn't figure it out. I controlled my expenses, maximized my earnings and turn cash into assets. These assets became money-producing assets, not depreciating expenses. There is a difference. Shiny objects are depreciating objects, and it is in one's best interest to stay away from them. They will take you down!

Life was rolling along and I was being prepared for life lesson number three. There is only so much of me to go around.

Before I knew it, my time was being consumed from all sides and every angle that existed in my business. I was quick to realize that I didn't own a business, my business owned me!

The lesson I learned was "systematization."

This is probably the most misunderstood areas of a business. Very few contractors ever make a fortune owning their own construction business. Instead, they find themselves a slave to the business.

You can discover very easily if your business owns you by answering these simple questions:

Are you too involved in your business? Could you leave it for a few weeks and have your employees run it for you, getting sales, doing the work and making a profit without your assistance?

Could you let go of your "baby" without any fear or worry?

Do feel no one can do the "job" as well as you can?

Be honest and answer them for yourself. Understand that if you can't answer 'yes' this is not what owning a business is all about. Almost all contractors who own their own business work too hard for too little. Everything about their business is in their heads, and they believe they are the only people who can do it. A self-sabotaging misconception. In essence, they're trapped in their own business!

In this economy, you do not want to be trapped in your own functionless beliefs. You need to master your business metrics and properly apply them to your business. Times are difficult, and things are not going to be easy for some long time in the future. You need to take control of your business now, so you can survive and possibly thrive.

Knowledge is the key to success. What we do with knowledge determines the level of success we achieve.

Want to learn more? Check out this report and get it FREE by clicking on the report:

How to Spot a Contractor Without a Functioning Brain

STOP ... Doing This!


The contractor was desperate and I could hear the fear in his voice. "I need work really bad," he said to me, "I can't pay my bills, how can I bid the jobs cheaper? I've got a guy, who will give me a job for 5% over costs. What shall I do?""

The truth is, he can't take this job or any other for that amount. After I looked at his financials, this contractor didn't even understand that he was bidding too cheap already and losing a ton of money.

You see. The numbers don't lie. If you do not have a clue or a handle on your numbers, you're a contractor without a functioning brain. To be truthful, you're a train wreck about to happen.

You make your money with your business skills, not your construction skills!

Let me show you what I mean.

The average contractor, doing about $700,000 a year, has an overhead expense of about 25%. Some are higher, and others are lower, but it is a good average.

This means his overhead or burden to support his field operations is costing him around $175,000. Not a lot of money, and it doesn't include any profit. In order to generate at least a 10% profit margin above and beyond his overhead costs, he would need to mark up his estimates by 1.35 or more.

In other words, a $10,000 estimated cost would have to be sold for $13,500, and enough sales, ($700,000 at that mark up of 1.35) to make what he wants.

His margin of error is his 10% profit or $70,000. One bad estimate, or Sales below the $700,000 mark, one price increase not properly covered, and costs start to devour the profit first.

For an example, let's say that he lands a $700,000 job for costs plus 5%. His total Sales would be $735,000. Costs would be $700,000, leaving the difference to cover his overhead and profit. What is the result?

A net loss of $210,000!

Let me show you. -

$175,000 overhead + $70,000 profit = $245,000 - $35,000 = -$210,000

There is no way that volume can make this up. Too many are selling jobs too cheap just to get the work, and that is a perfect recipe for financial failure.

As sung by Kenny Rogers in the song "The Gambler," "You've got to know when to hold, know when to fold them, and know when to walk away!" You'll lose less money by walking away.

If you would like to learn how I can help you get a handle on your business, check out and get my FREE Coaching Report by clicking on the report.

Why suffer the consequences of not having a handle on your business? It's costing you more than you think without it!

Stop Doing This or Go Broke!

This is serious ...

As a friend, and hopefully your mentor, I hope you're not doing this.

I know times are hard, jobs are difficult to get and few and far in between.

But ...

Dropping your price to get the work, isn't worth it!

Let me explain.

I've been overwhelmed by contractors coming to me in desperate situations. What I'm seeing is desperation, pure and simple.

Understand this ...

Bad decisions will cost you money, cost you time and eat into your profits. In the worst case, one bad decision can totally kill off your business. That means, taking work for nothing is a losing proposition!

If you want to lose money, stay home and watch Opray, you'll lose less money!

Every single contractor who has come to me, when I look at their financial, has taken work below costs and ... volume doesn't make it up. It just makes it worse!

When you are in some kind of pain – physical or emotional or financial— any kind of discomfort – you tend to act on things you believe will alleviate that pain. And your belief that something will help grows stronger the longer the pain goes on. After a while, anything with a remote chance can look like a winner. Wishful thinking starts to seem quite grounded, and grasping at straws feels like anything but.

In other words, you make BAD decisions!

It’s to decide in favor of something we think will bring gains today or tomorrow than for a strategy which may take weeks, months, or longer, to materialize. This means a fortune-changing strategy, which will help us, can get sacrificed to something mediocre we think will help us with a short-term remedy.

So, why did they do it? Grasp for straws? Settle for failure?

Here is what I found.

• They didn't know their numbers.
• They didn't have a strategy.
• They didn't market.

They short-changed their chances for success, because they didn't know. In other words, they allowed themselves, through desperation, to become the victim.

Listen, the economy is tough, and it will be tough for a long time. As a matter of fact, it will never go back to the way it was. That is a thing of the past. You need to adapt.

How you can get started.

1. Take the time and calculate your markup. Even better, calculate three. A low one which I like to call my last chance or worst case. The one you think is right and an optimistic one. Then calculate the results of each one if they were used. Which result do you like? Run with that one. If someone wants you to do it for less, walk away.

2. Develop a strategy. You know times are tough, how will you compete? What will you do? Lay out a plan and work the plan.

3. Learn how to market your construction services. Get your business out in front of your prospective customers. Don't wait for them to come to you.

Every contractor whom I am working with who is doing the above with me is getting work and making money. It's not easy and there is not a ton of it out there, but they are getting their share. Taking work for nothing, leaving money on the table just to get a job with high hopes, is a poor strategy.

I hope this will help some of you to start making a better decision on getting your work at the right price.

A Contractor's Thought About the Future of Our Industry

The results are in. Last week Washington announced that the unemployment rate dropped to 9% and that industry had created 36,000 new jobs. If you listened to the media, miracles have been spun and the future is bright and rosy, or is it?


The truth is, the math doesn’t add up. If 36,000 new jobs had been created and 600,000 fewer people were off the unemployment line, what happened to the unmentioned 564,000 people? It appears that Washington and the media isn’t going to talk about them. I guess they’re invisible.

And this is only the beginning.

Look around you, things have changed and our world is different. The two biggest sectors of industry that employed people, Manufacturing and Construction have been silently shuttered. Over 43,000 manufacturing plants have been shut down since NAFTA took hold in 1994. That means jobs that we no longer have and jobs that have left this country.

The unemployment rate in the construction industry now exceeds 20%. Unfortunately, that number only counts that collecting unemployment. However, what about the self-employed contractors who can’t collect because they are ineligible, don’t have work or customers to support their basic needs and are slowly devouring their life’s savings?

When you look at it in this manner, you might be wondering, how worse can it get?

Here’s a thought or two to chew on.

Real estate is dead. Waiting for it to return would be like waiting for typewriters to replace the IPad. Furthermore, if it does, we could be looking at 20 to 30 years down the road. It also brings another burden to bear. So many people have their money tied up in real estate, they will be caught short and forced to live where they are and not move up like in the past.

That means repairs, remodeling and renovation will be more attractive than new construction.

Let me explain.

In case you hadn’t noticed costs are escalating. This is in part to the reckless spending in Washington, bailouts and stimulus and of course, quantitative easing. All this has contributed to the devaluing of our dollar, and that means rising costs (inflation). Higher construction costs make staying where you are and repairing, remodeling, renovating, or renting, more attractive.

To further add to this is rising fuel costs. People will be caught between an axe and a grindstone if they live too far from work. This will start a trend to live closer to work and a need to cut down on travel costs. Younger workers and families who can’t afford to buy will be renters. I believe we will see an up- trend in communities of homes and apartments built closer to work hubs.

The truth is things will not get better until Washington does some serious cutting and focuses on re-building our manufacturing base. Without manufacturing at reasonable and competitive wages without all the messy government regulations, our nation cannot start producing the products that made this country great to begin with.

Lets be realistic, this being a nation of consumers isn’t working.

Construction also is a big factor is solving the unemployment problem. Unfortunately, government is broke. Trillions have been foolishly spent on the shovel ready jobs that produced very little of anything. That means that a prime opportunity to jumpstart the economy with public works projects have passed, and we’re left paying the tab. What really amazes me is that no one is screaming and wanting to know where all that money went.

At the present pace that Washington is working on solving our financial mess, we could be looking at 50 years or more. However, we the people with our voting rights can change that quickly. Every American needs to take a hard look at their incumbent and not be afraid to vote them out for those who promise tough reforms on the tough issues. Never mind how much pork they brought home, the pig is dead because they’ve skinned it alive already.

Without the working middle class that pays taxes and buy products, and can’t do so if they do not have their jobs in manufacturing and construction, nothing changes.

The result?

We will have no choice but to live within our means. It is being forced upon us. The options you have today will be gone tomorrow. A lot more is going to change and you better be prepared to change with it, or it will feel like a steam roller running over you.

Now is the time to take a deep breath and realize what is happening around you. Change is upon you and if you ignore that change and fail to adapt yourself to it, you will get left behind. And yes, I am doing the same for myself that I am recommending right now to you.

The way I see construction changing is simple. People will still have to spend some money, and they will be selective. I can almost guarantee you that where they live and work will be a priority. That means repairing, remodeling, and renovating in both the residential and commercial sectors will produce a demand. That demand won’t be overwhelming, which means the smart and astute will get what work there is. They will have to market and control their costs. Waiting for your phone to start ringing off the hook with work means you’ll be waiting a long time. Working for nothing or too cheap, means you’ll be broke.

All of us have to pay our debts, live within our means and force our elected officials to do the right thing. Keynesian economics and its big government approach as the solution to our problem is the problem!

We are a great nation filled with great people who have brought huge leaps in progress to the world with our free thinking, products, innovations and ideas.

Some say that the whole idea of America being the leader of the world is over and that free enterprise is dead.

I say hogwash to that.

Our Founding Fathers knew they were embarking on a daring experiment. They laid the groundwork and gave us the map to follow. Somewhere, we’ve gotten off the path, and we need to get back on it.

What a novel idea they had, free men free to be innovative, creative and enterprising. To be whatever they wanted to be, to go as far as they wanted. No wonder it worked so well.

The truth is no other country has ever done a better job of reigning supreme over the world than America.

It is said that if a great nation doesn’t rule, then an un-great one will.

Some say it will be China. However, they can’t walk the talk. Think about it. Are they as innovative as us? Are they as technologically advanced as us? The answer is no. Their GDP is only one-third the size of ours. At their present pace of growth, it will take them 20 to 30 years to catch us.

Unfortunately though,

The problem is that our present government will do its best to screw things up, but we have no one to blame but ourselves. Americans have to be far more intelligent and less emotional when it comes to the voting booth. We need to get back to our roots, our constitution and the fundamentals that our Founding Fathers established for us to be the great nation of free men and woman whom they envisioned.

In the future we must be careful how we cast our vote. We must understand the issues that confront us, the problems that besiege us, and the actions that must be taken, no matter how difficult, in order to free us from them. We must elect those who will do our bidding and not use our vote for their own selfish means, self-centered goals and financial goals. It's time that they got paid what they are worth, and that means they are getting paid too much!

The greatest strength of our country is its people. We are innovative; free thinking, hard-working and industrious. Our most powerful asset is our ideas.

When you set ideas free, you set business free and everyone benefits. Government can’t do that. Reality is, we need government to get out of the way!

I believe that we can get back to doing that, set our ideas and innovation into motion and this is the key to latch onto: Ideas and innovation set free today will become the breakthroughs of tomorrow.

Right now the economy is a roller coaster ride, putting your stomach in the uncomfortable feeling of being stuck in your throat. It’s hard to think about anything, let alone getting ahead. Especially when you have so much pressure squeezing you from all sides, and you have no clue what tomorrow will bring you.

It’s almost a flight or fight decision.

It must be similar to what the cave man felt when a mastodon showed up at the cave door.

Like the cave man, it’s important to keep a clear head and not let your emotions take over. You need to examine the situation, plan, take action and keep a clear head. Because …

It’s not the size of the mastodon that is the problem …
It’s the size of the opening to the cave.

You see, there might not be such as big as a problem for you that you perceived at first. Instead of being reactive, maybe you just need to be “active” and build a smaller opening to your cave.

America’s future and your own, depends on what you do today. I can not emphasize this enough.

The time for panic is over; the need for despair behind us no matter what the future brings us. Now is the time to sharpen your business saw, clean your tools, mend your fences, learn how to market your construction services, and slash the fat out of your operating expenses.

The time to get started is now.

Our free ideas, free market, and free enterprise are still the best way to turn this country around and get it back on track. The sooner we start working on it and demanding our politicians work on doing the right things for us, the quicker we can get back to work.

Let’s put our house in order and notify our government to stop trying to transform our America into something that we neither want nor will not work.

We don’t care about the rest of the world; it is time for the rest of the world to lift itself up to our standards. You politicians have had your chance, now do it our way. We’re ready to get back to being number one again, and we know what works. Its American innovation, entrepreneurship, leadership and ideas, now step aside because we’ve got work to do.

The State of Our Industry

Another year has passed us by, and we are no better off than we were one, two or three years ago. As a matter of fact, too many contractors find themselves a lot worse off and a future that is bleak, if not unpredictable.

To be honest because someone has to be, gone are the promised results from trillions in dollars and whatever else this Administration has promised.

Gone is the promise that if we "invest" unemployment would not reach 8% Instead, we have a wildly underestimated unemployment rate of 9.6% To be honest, and as I have said someone has to be. Unemployment is somewhere around 16% (M6 numbers) and if we take into account all the small business owners who are unable to earn enough and going without, it is encroaching 25%

Gone is the promise of "shovel ready jobs." Instead, hard-earned taxpayers dollars have been wasted on highway signs boasting of results never produced and their insidious lies to the American people, and other pork they shoved down our throats.

Gone is far more than I believe the average American realizes.

Had we a crystal ball, possibly we could have seen through the inability and the inexperience of this Administration to improve the American economy. Maybe, people would have seen the fallacy of Green and LEED. Let's be honest (since someone has to be), until costs come down, demand goes up and there is an incentive (taxes) Green, and LEED is D.O.A., or at best, hemorrhaging profusely.

Good News and Bad News

Unemployment will not be addressed until Americans feel confident that Washington has a plan to control spending, balance the budget, and reduce the deficit. Meanwhile, big business will continue to keep its operations employment lean and hoarde their earnings, and small business will pay the price for being small and being the target of progressive politics.

If anything, I hope that you understand that you cannot wait for the Big Government of Washington to solve your business problems. Instead, you need a plan of your own. Here is why.

Housing will remain in a flux for most home builders until the inventory is reduced, or they come up with a better mousetrap. That mousetrap will have to be small, affordable, efficient, convenient and close to the homeowners place of work. Okay homebuilders, I just gave you the formula for your success.

Remodeling, renovating, and repairs will lead many to sales providing . . . they market properly. People and business will stay put until they feel confident. They will remodel, renovate, or repair what they have. If you are already in this sector of the industry, low expenses and smart marketing will be the key to your success.

Commercial construction will be plagued by its inventory and this is a major concern. Delinquencies and the failure of our banks to lend will keep the return of this sector in a head hold for years to come. Again, look to remodel, renovate, and repair to commercial properties as your major source of income. Low expenses and targeted marketing will be your tools for success.

Many were pinning their hopes for survival on the Promised Land of Infrastructure. With a broke Federal government and many state government's teetering on the abyss of bankruptcy, forget it because it ain't gonna happen! I hate to say it, but the HUGE union pensions for government employees, and the COSTLY progressive entitlements will keep them in the red or until they can shake these gorillas off their backs through bankruptcy court.

Agriculture is doing well so expect to see capital investment made in this industry. I believe that there is great potential for manufacturing. I see a lot of us getting fed up with China and its inferior products, for example 'drywall.' If you're like me, I would rather spend a little more but get the great quality and reliability from a product that says: "MADE IN AMERICA." To hell with the Chinese and their crap.

In the petroleum industry drilling is as dead, just like Obama intended. Watch the natural gas industry because Pickens was right. At this present moment big petroleum is looking to buy out the ng producers. What do they know? Well, oil is getting expensive and we have plenty of natural gas and Americans won't like paying $7 or more per gallon for diesel or gasoline. If they bring it on-line they will have to spend billions redoing their infrastructure

The good news is that the country will not come to a screeching halt. Life will go on. The affluent are still spending and people are finding a way to address their needs. You will see sales but few of them. At least nothing like five years ago. Those that will survive and thrive will have to educate themselves on managing their business far more efficiently than they do today. They will have to produce lean production costs, controlling overhead costs and producing effective and targeted marketing.

In short order, if you do not have a plan and strategy coupled with an adapted business mindset and focused marketing to capture your fair share of the limited sales opportunities that will present themselves within your marketplace. You are screwed. We are in this for the long-haul.

If anything, I hope this insight will help many of you. Maybe even rattle of few cages, so to speak. The doom and gloom will be a reality for those who do nothing to improve their businesses. Success will come from adapting, improving, change and something called evolution-flexibility.

Will you evolve or become extinct?

If you would like to discover how to evolve and adapt, I will be addressing this at my yearly SUPER Business-Building Conference in Orlando this March 21, 22, 23, 2011. So, be careful; if you do nothing or decide to do something for yourself and your business, it will profoundly determine your future.

Two 'Things" You Need to Know About Your Customers

"Henry, this has been my best year yet!" the conversation went, "as a matter of fact, I'm stepping up my marketing to make 2011 even better!"

Good news to hear from a contractor doing his work here in the Sarasota area, most certainly an area hard-hit by this down economy.

How is he doing it?

Simple, by focusing on what emotions and emotional drivers his prospective customer is using.

First, you must understand that everyone buys from emotion. Those emotions are want, need, desire and/or looking for a solution to their problem.

However, it is even more important to understand what is driving that emotion. There are two emotional drivers, necessity and narcissism.

Let me explain.

If a person's home burnt down, it would have to be re-built so they would have a place to live, that is a need and re-building it is a necessity. The emotions would be need and seeking a solution for their problem by the driver of neccessity, a place to live.

If a person was making more money and wanted to express their new found business success by owning a bigger, newer home so they could impress their family and colleagues with their new found success and status symbol, their emotions would be of want and desire driven by their narcissism.

As you can see, each is using an emotion but they are driven by a different driver, which brings a different perspective.

In order to execute a great marketing and selling program it is important not only what emotions the prospective customers are using to buy, but what driver is motivating that emotion.

I'll touch deeper into this in March at the SUPER Business-Building Conference for Contractors.

Meanwhile . . .

Good marketing!

2011 – The Good, the Bad, or the Ugly?

Here we go again, another year, another dollar … maybe? Again, we find ourselves facing another year of “known’s” and “unknowns”. Unfortunately, the “knowns” are uninspiring, at best.

Where ever you turn. You read articles in the newspapers, or hear news clips from the radio, or watch the humdrum of TV news, either the economy is upbeat or down in the dumps. It seems that they can’t get the story straight. Then again, the media aren’t the media anymore.

The truth is, it is costing more to live, and it doesn’t look any better for the future. There is a drag on the economy, but it is making a slow rebound and there will be a great need for the services that our industry offers. However, emphasis is on the word "slow."

I do expect that government funded projects will stall dramatically due to deficit and debt that continue to grow at the state and Federal level. The crutch that has to be worn is that the Obama Administration really missed the ball with its stimulus debacle. Instead of throwing billions of our hard-earned tax dollars at silly partisan sinkholes, it should have plowed more money into the infrastructure and really kick-started the economy. After all Construction is the Achilles Heel of the economy.

If you remember, Vice-President Joe Biden broadcasted that as a result of the stimulus spending, it would be creating 500,000 jobs a month this year. Hmm? Still waiting!

Housing will be slow but the “Big Gorillas” of the new home industry, are buying tracks of land at discounted prices as they look to the possible future of building new homes. The truth is no one knows when that will be, so possibly they could have waited and bought it even cheaper. Time will tell the wisdom of this decision.

Interest rates will undoubtedly have to climb and wage earners have to be willing to spend, but with an unemployment rate that officially (that’s a laugh in itself) scratching at 10% (more like 18%) I doubt we’ll see many movements in that arena soon since so many are 'giving up' finding work rather than Amercians going back to work we can't believe the numbers.

Expect prices to rise dramatically as gas approaches $5 a gallon, which is on the near future horizon, but also understand why. As the Fed keeps printing money it devalues our dollar. Our dollar is the World Reserve Currency. Unlike other countries that have to buy US Dollars to purchase oil, we don’t so we’ve always had an advantage in the cost of oil being less for us. There is behind the scene meddling by a number of countries (China, Russia, Saudi Arabia, India to name a few) to remove our dollar as the World Currency. If that succeeds, we could see $7.00 or more per gallon for the fuel that powers our economy. Watch this closely!

If interest rates creep up, I would expect a small flood of work to come on hand as owners attempt to take advantage of the last of the low interest rates. The only real problem is the banks. It appears that ‘holding’ money seems to be a better advantage for them until the Fed removes their “binky” and strips away the nipple that has been feeding them.

Therefore, I would expect service side of the industry to do well as owners want to keep existing properties up to date. Handyman services should also do well as homeowners look forward to repairing, as well as remodeling for those who want to update.

On the commercial side manufacturing and agricultural are showing signs of a strong comeback. Retail is at a crossroad. The holidays of 2010 showed many of them that they can make more money on-line than in the expensive upkeep of a box store. I would expect to see retail downsize it stores in lieu of the bigger profits that can be made on-line. Already, many big name brands are scouting this arena. Does that mean that shopping malls could be our next big ghost towns? Could be but only time will tell.

Hopefully, this year will be the last of the bottoms, and we truly start a climb out. I expect things to be slow, for some, they won’t even notice if a recovery is taking place. I don’t believe anyone can sit on the sidelines and wait. You must be proactive, get out and get your sniper scope clearly focused on what the prospective client is looking for and discover how you can get them to realize you’ve got it for them.

There will be sales out there, few but for those you have the ability to market your construction services will do much better than those who are sitting home waiting for the phone to ring.

Take heed in this advice, things are changing and you best change with them. If you are still stuck in the last century you will soon find yourself a dinosaur … extinct!

Marketing your construction services is the key to success in 2011 and beyond.

For those of you who serious about being successful in this economy and realize that change is necessary, you can spend three days with me in Orlando, Florida on March 21, 22 & 23, 2011. We’ll spend three days revamping your business plan and strategy so you can better position your business to getting more sales. This includes working on your marketing plan as well. Find out more at: http://www.contractorssuperconference.com/