Missed Deadlines Are Like a Big Shop Vac to Profit
It’s hard for some of us to make money…for others not so much. I’m not talking about how businesses and lives look on the outside. I’m talking about the real and truthful hidden beneath the exterior profit. Borrowed money often makes things appear way better than reality.
On one of Donald Miller’s Business Made Simple daily podcasts, this past week he talked about the importance of hitting deadlines. Missing them can cost you a lot, in both money and reputation. Missed deadlines are too common in construction. I know missed deadlines are costing me and my business.
On the surface, a missed deadline here and there doesn’t seem like it’s a big deal. The problem is that those missed deadlines don’t ever go away, they just keep getting added to previous ones. It starts out like a little snowball rolling down a hill, problem is…when it gets to the bottom it’s big enough to wreck your business.
You can’t go back in time and change the past; you can only learn from it.
Let me show you how missed deadlines cost you money. Let’s say the labor budget for a siding project is $10,000. This translates into 167 hours or 24 working days. The cost for labor and length of time needed for this project was predetermined by a data base using the square footage of walls to be sided.
Often production crews get to a stopping point mid-afternoon and rather than starting another section they quit for the day. This may happen a few times throughout the project. When they get to the end of a project, they happen to get finished at noon. It’s too late to start the next project so they wait until the next day to start.
If throughout the duration of the project the production crew stops 1 hour early each day, this adds 3 days to a 24-day project. These 3 days now pushed starting the next project back 3 days plus the half day at the end.
If this happens consecutively on projects throughout the year those 3 ½ days becomes 35 days. 35 days would be enough to do another project, not to mention the overhead costs that continue whether there’s work being done or not.
A 15% profit figured on the siding job would be $178.00 per day, times 3 days is $534.00 for that one project. Add to that the complete project missed is $4,798.00 lost to never be gotten back. Multiply that by 25 years of doing business that’s a lost profit of $119,950.00 sucked up by the “missed deadline vacuum”.
The problem isn’t the labor costs…it’s the never-ending overhead.
Every deadline missed in a company, whether production, sales, marketing, administration, or bookkeeping subtracts from the bottom line. Each of these little subtractions is like a little rock thrown into a pond. The ripples will inevitably spread throughout the whole company sucking up profit.
Meeting deadlines has to do with being intentional. Determining your priorities, getting them on the calendar and pushing forward. The only way I reach the goals I have for my life is to meet deadlines.
I’m going to make meeting deadlines a priority for 2021.
Here’s to a more profitable 2021!