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How Can I Ever Get Everything Done?

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Trying to Spin Too Many Plates at The Same Time Can Make You Dizzy

Maybe you’ve have seen a plate spinning act in some form or another. There are multiple plates spinning simultaneously on the top of sticks. The performer is running around trying to keep things from crashing to the ground.

When I was a kid, I remember watching Erich Brenn perform his plate spinning act on the Ed Sullivan Show. I remember him running back and forth, trying to keep all the different plates spinning at the same time. It was amazing…and a little stressful.

The same thing happens in our lives when we try to do too much.

The number of things we’re trying to get done just increases around the Holidays. I know the last couple of weeks I’ve have felt like I had a lot of plates spinning.

Erich knew what he was doing and had a system for keeping those plates spinning, but it was only sustainable for a short period of time.

Most construction companies operate this way, they’re trying to do too many things at a time. Just like the performer who keeps putting more and more spinning plates up on the end of sticks, we keep trying to do more and more.

There is a limit to how much a single individual can do. We can only run back and forth keeping the plates spinning for so long before they start crashing.

Trying to run a business without a plan or structure just increases the odds for failure.

To build a successful business there needs to be a sustainable process for keeping the plates spinning and this starts with a plan. It’s much easier to share and understand a plan when it’s drawn out. Just like constructing a building can’t be done when the blueprint is only in someone’s head.

Most construction business systems are similar. They consist of the same basic areas of operation.

Sales/Marketing

  • Prospecting for customers
  • Follow up on leads
  • Meet with prospective customers
  • Pricing and Proposals
  • Sales Reports
  • Advertising/Promotions
  • Marketing and Sales Planning
  • Customer Relations
  • Market Research
  • Public Relations
  • Product Development

Production/Operations:

  • Project Management
  • Project Assignments and Scheduling
  • Productivity Monitoring and Control
  • Quality Control and Documentation
  • Production Team Prep. & Development
  • Communicate with Team Members
  • Project Troubleshooting
  • Inventory Planning and Control
  • Purchasing and Vendor Relations
  • Customer Service
  • Equipment Maintenance and Repair
  • Facilities Maintenance & Repair

Administration/Finance:

  • Computer Systems
  • Team Member Records
  • Team Member Policies and Benefits
  • Office Support
  • Office Maintenance
  • Information Archiving and Distribution
  • Data Processing
  • Communications
  • Contract Preparation
  • Budgeting
  • Invoicing
  • Cash Flow Forecasting
  • Financial Reports
  • General Bookkeeping
  • Accounts Payable
  • Taxes
  • Banking

As you can see here, even just the basics are a lot of plates to keep spinning and there are a lot more to spin than just these. All these plates going around and around will make your head spin.

This is why at Solution Building, we’re making available the Business BUILDing tools and systems that were developed and have been used for years at Timber Creek Construction.

The Business BUILDing Toolbox is currently available at a discounted Holiday price.

There are a lot of plates to keep spinning in a construction business. Why not get some tools that will help you keep your plates spinning?

If you have questions or would like to know more about the Business BUILDing Toolbox you can schedule a free 30-minute construction company consultation here.

Why Choose Trick over Treat…Isn’t Treat the Better Choice?

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You Would Think So, But Construction Companies Do It All The Time

Halloween is almost here. Most of us have done trick or treating as kids. You know, that tradition where children dress up in costumes and go from house to house asking for treats with the phrase “trick or treat”.

The “treat” is usually some form of candy/sweets, although it might be some other small gift. The “trick” refers to a threat, usually an idle one, to perform mischief on the resident(s) or their property if no treat is given. 

Sure, there’s some cost to buying the candy and it requires some time to answer the door and pass out candy, but given the choice…

As a property owner…a treat seems like the better choice.

If the treat is the better choice, why do construction companies continually insist on tricks?

I’ve written a lot about construction companies being scared to do things differently. They’re stuck in the rut of “we’ve always done it this way”. Trying to build your dream business this way is like being in a horror movie.

Everything is predictable. Rather than doing something different, they hide in the basement, the attic or behind the chainsaws, when they could just get in the running car.

Hiding behind chainsaws is what most construction companies do. They choose the discomfort of the known trick, over the uncertain treat.

I don’t think these companies started out hoping to have unhappy customers, or not have enough money to pay the bills, or to be working 70-80 hours a week for minimum wage.

The reason most construction businesses are stuck here is fear. They are afraid that trying something different might not work. They choose the discomfort of the known over the unknown.

It doesn’t have to be this way!

This is why over 30 years ago I decided that I wasn’t going to hide behind the chainsaws anymore and I got in the running car (okay, really it was truck).

Did everything I try work…no. Was it scary…yes. But I didn’t stop, I kept trying until it did. Then I worked on it some more to make it better. And then I started working on a new and different business tool or system.

This is where I figured out the 5-step business BUILDing process. I BECAME AWARE that what I was doing wasn’t working. Then as I researched, I began to UNDERSTAND the problems. Next, I compiled INFORMATION about what was needed and began IMPLEMENTING new tools and systems into my business. The more I used these tools, the more I LEARNED and the easier it became. This process led to BUILDing my DREAM business.

The great thing is, YOU don’t have to go through the long, hard, and scary process to build your dream construction business by yourself.

You can get the tools and systems that we use by going to the Business BUILDing Toolbox and get started quicker, and it’s less scary. If you would like to learn more about these tools and systems, check out the 5-step Business BUILDING Process. To learn more about how these business tools and systems can help you build your dream business, schedule a free 30-minute consultation.

Set yourself apart from your competition by choosing the treat over the trick.

The Payment Application is Another Important Tool in the Business BUILDing Toolbox

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This Tool Helps the Construction Companies See Their Cash Flow Ahead of Time

Concerns about cash flow is one of the biggest struggles construction companies and contractors face — and for good reason. These businesses typically lay out large amounts of money for project-related expenses. Waiting to get paid until the job is complete is a sure way for a company to go out of business.

This is especially hard on smaller companies with limited cash on hand when they are working on larger, long-term projects.

An alternative approach is for businesses to be paid when predefined stages or percentages of a project are complete, a model called “progress payments.”

Progress payments benefit all parties involved.

The Payment Application is an Excel spreadsheet that is used for tracking progress payments made on construction projects. A payment application is more than a simple invoice. It includes a schedule of values based on the proposal and the individual items included in the scope of work.

Construction companies aren’t banks and shouldn’t be carrying the cost of larger construction projects until they are finished. Progress payments help companies recover a portion of their costs for the project along the way, thereby maintaining a steady cash flow.

Payment applications can also protect companies in the case of client nonpayment throughout the construction process. At Timber Creek Construction we have a delay condition in our contract that we can stop working on a project if a progress payment is not received promptly. 

In the construction industry, a progress payment is a partial payment often made after the completion of a predefined stage of work — for example, demolition, concrete, framing, roofing or siding. These installments replace single, lump-sum payments at the end of a project or a “half upfront, half at the end” arrangements.

Making payments connected to the completion of a specific stage of work can create some confusion., For instance, does completion of concrete include sidewalks and garage approaches that may not be able to be completed until other things are done? That’s why at Timber Creek Construction we choose to make our payments based on periods of time rather than stages. We then determine how much has been done within the predetermined period of time and invoice accordingly.

Benefits to progress payments are:

  • Stable cash flow – Progress payments provide construction firms and contractors with a steady stream of income, thereby reducing the amount of working capital needed for projects. This makes it easier for companies to cover costs for supplies and labor throughout the project. This minimizes the need to go into debt.
  • Increased motivation – Reaching that next milestone to get that next progress payment is a great motivator in the construction industry. Being paid along the way can also drive productivity, reduce material and labor expenses, and result in higher profits.
  • Minimizing payment problems – Getting paid based on progress establishes a steady expectation of cash flow and when you should expect it. If payments begin coming in late, or not at all, it could be a sign that the client is having financial issues. Delayed payments help flag this early and can prevent the need to take legal action.
  • Opportunity to pause the project – If a customer doesn’t pay their progress payment for work completed, you may decide to pause work until the issue is resolved.

The one drawback to progress payments is like most other business-related activities…it means more paperwork.

Construction companies and contractors need to make sure they are paid. Most don’t have a dedicated financial or accounting department to handle that function. This puts that task on the basic office staff or the contractor himself.

This is where having a Business BUILDing Tool and a system to use it comes in.

Next week we’ll look at the specifics of our Payment Application and how that tool works.

What Do You Need to Know to Run a Successful Construction Business?

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It Has More to do With Business and Less to do With Construction

There’s something exciting about the thought of starting your own business. It seems like a great idea initially. The problem is that most people don’t realize what it takes to operate a successful construction company.

We’ve all seen construction companies get started and then go out of business.

 According to the Small Business Administration…

60 percent of US construction companies fail within the first five years of operation.

These companies reportedly blamed several factors for their failure, including labor shortage, politics, insurance, taxes, natural disasters, and subcontractor incompetence. While these things may be a part of the problem, if we look a little deeper, we’ll see…

The real factors that brought about construction company failures are internal and within the owner’s control.

The reasons are more likely poor planning, inaccurate scheduling, hiring the wrong people, inability to innovate, poor management, and bad or no business system.

The good news is, that the next generation of construction businesses can learn from their forefathers’ mistakes and avoid failing for the same reasons. 

Owning or managing a construction business is a hard thing to do. And to do so successfully is especially hard.

The solutions to problems that can put construction companies out of business may not be easy. It takes a lot of planning, production management, hard work, and discipline to keep the business running successfully. But at least…

Most issues faced in a construction business are controllable.

Finding out what challenges are likely ahead can help construction companies be prepared.

Here are some reasons construction companies fail –

Lack of funding and/or poor cash flow – One of the reasons construction companies fail is not enough funds or unwise use of funds.

The ultimate dream of any professional in the construction industry is to earn more by owning and running a business, rather than collecting a paycheck working for someone else. But keeping a business operating at a profit is never as simple as just doing construction work.

There are processes and systems that need to be in place for collecting from customers and paying the bills. Construction requires tools, vehicles, and equipment, and these aren’t cheap.

It’s critical to maintain positive cash flow, have a budget for bills, and money saved for emergencies.

Overlooking these things can quickly lead your company to failure.

Poor project performance – One bad project can lead to a construction company’s closure.

Project performance is more than the physical construction work. The internal business systems for proposals, change orders, project management, invoicing, etc. are often not thought off when thinking about construction projects.

Construction projects are about good results. This includes starting and completing projects on time and within budget. Meeting contract requirements and customer expectations.

Failure in any of these areas may mean the closing of your company.

Failure to plan – Just like good planning can lead to a successful construction project, the same is true for building a successful business.

In project planning, you define goals and processes according to the customer’s requirements. You are intentional and clear on where the project is going and how you’re going to get it there.

A good builder will do the same when it comes to their business.

Consistant clear communication with customers, production teams, and suppliers is one of the important pieces of a good business plan.

The likelihood of companies going out of business without a plan increases exponentially.

There are a lot of risks lurking on a construction site that can cause a project to go poorly. The best way to avoid these risks is through awareness, understanding, and preparation.

The same is true for your company. If you become aware that there’s a problem and understand it, you will be more likely to avoid it. Instruction and learning can lead to building your dream business.

The road to success in the construction industry may be long and rough, but it’s worth it.

Become more successful through improved processes, systems, and management; take it one step at a time, and soon enough, you can achieve your ultimate business dreams.

Let us know what your biggest construction business struggles have been in the comments below.