Now What Am I Going To Do?

The Bottom of the Rut is Gone

It’s been a tough few weeks. With the truck transmission needing to be replaced and the customer shorting Gene $1000 dollars for the garage windows, Gene has felt like he’s stuck in the bottom of a muddy rut.

Even with all the problems, Gene has had a lot of work to do for his first year of self-employment.

Some of the projects have been very profitable.

Having a lot of construction projects is rewarding. It’s also one of the reasons he’s struggling to get proposals done and keep up with the paperwork.

To add to the busy, it’s time to get the tax paperwork gathered up. Gene needs to get it to the accountant so income taxes can be prepared. One more thing on the to do list that needs done. He’ll work on that next week after he gets this project that they’re working on finished.

After a couple weeks of late nights, Gene has the tax paperwork ready to take to the accountant. Another thing checked off the list.

On Monday, Gene starts the crew removing the kitchen countertops and cabinets for the current project. Once things are underway, Gene takes the paperwork to his accountant.

They look through the paperwork. As the accountant goes through the stack of papers he asks Gene a few questions.

There are a couple of things that he still needs.

Gene tells the accountant that he’ll get those to him later this week. The accountant says he will let Gene know if he needs anything else or has questions.

A few weeks later, Gene gets a call from his accountant that his income taxes are ready to be picked up. Gene looks at his calendar trying to find time to squeeze in a meeting. With all the construction going on, it’s hard to find time.

The thing is…April 15th is only a week away, so they schedule a meeting for next week.

Today’s the meeting with the accountant. After lunch, Gene drives to the accountant’s office to pick up the tax papers.

With this being Gene’s first year paying self-employment income tax, the accountant wants to go through the return with him. They sit down at the table in the conference room and the accountant begins explaining the different pages.

As they are going through the pages, Gene is beginning to feel a little nervous as he sees the numbers. Then the accountant gives Gene the return to sign and…

A voucher with $17,376 typed in the “Amount You Owe”.

Gene sits there quietly for a minute as he processes this number.

He looks up at the accountant with a distraught look on his face, “I don’t have that kind of money. I can’t afford this! How am I going to pay it?”

“You could borrow the money,” suggests the accountant.

“I already borrowed all I could to replace the truck transmission. Are there any other options?”

The accountant tells Gene that there is an option to set up payments with the IRS. Of course, there will be interest and penalties paying it off this way.

This would be better than pretending not to owe it.

Gene takes the paperwork and pays the accountant. It looks like Gene now has a new project to undertake.

After researching all the options, Gene contacts the IRS.

The process of setting up payments with the IRS was a nightmare and took weeks to get done. Now Gene has a monthly payment of $350 for the next 60 months. That’s five years and $21,000.

This is not how Gene pictured the first year of his dream business.

Now the bottom of the rut is not just deeper and muddy…it’s gone. Gene feels stuck. Like he’s got his hands and feet pressed against the sides of the rut without any way out.

Gene asks himself, “Why am I doing this? I could make more money and work less hours if I went back to work for someone else…”

If You Don’t Like How Things Are, Change is Required

Or You Can Just Keep Doing What You’ve Been Doing 

The definition of insanity is doing the same thing over and over again expecting different results.  

This common quote is attributed to a lot of different people. It doesn’t matter who said it. What matters is what it says. 

I think this quote is so popular because of the truth that it represents. 

I recently shared how change is hard. This seems especially true for people in construction but isn’t limited to them. 

Without intentional action, nothing is going to change. Things will just continue as they are.  

I know a lot about the struggle with change because…I’m one of those people who doesn’t like change.  

This was evident when our church was considering changing the hierarchy of our committees.  

As long as I can remember we had an Administrative Council to oversee other committees in different areas. These included finance, trustees, staff/pastor parish, nurture, outreach, witness, communications, memorial, and a whole lot of others. 

I thought this system worked just fine. If it ain’t broke, don’t fix it. 

Some in the church thought this system resulted in too many meetings. Many felt overwhelmed by the meetings. There were a lot of meetings. 

The suggestion was to reorganize and consolidate most of the committees into one larger committee. This might mean longer meetings, but fewer of them. It was voted on and approved to try the new system.  

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I was not for the change. I went kicking and screaming…okay, this might be a little exaggerated. The point here is there were some things with the old system that needed to change. And… 

Doing things over and over again expecting different results is insane.  

We made the change, and it seems to be working. 

If we aren’t open to change and trying new things, nothing will ever improve. We’ll just stay stuck in our rut. Walking back and forth as it gets deeper and deeper. 

It’s been said that a rut is grave with both ends kicked out. Don’t spend your life in a grave. There’s so much more for us if we just get out of the rut.  

Change is scary. We’re used to our rut. The change we don’t know is scarier than the pain we do know. This resistance to change could be because of the unknown. It could be the time the change is going to take.  

Another scary thing about change is that it’s not a one and done thing. Change is a continual process. We want simple, but that’s not how life works. The question is: do you want control over the direction of your life…or do you want to leave it to the world around you? 

We have the power of choice. We can choose to change or not.  

We also shouldn’t change just for the sake of change. Change should be intentional and based on knowing who you are, knowing what you want, and being true to these. 

Too many people drift through life without any direction or purpose. If this mundane rut is where you want to stay…just keep doing what you’re doing. But if you want to build a dream life…do something about it! 

“Change happens when the pain of staying the same is greater than the pain of change.” Tony Robins 

There’s Too Much to Do and Not Enough Time to Do It

This is Where Delegation Comes in 

Having too much to do and not enough time to do it is a common situation. This is especially true for people in construction. 

Chasing my tail and trying to keep up is a good description of how this past week was for me. There were four different construction projects being done at the same time. This involved organizing multiple subcontractors and materials. 

In addition to this, there are six construction projects that are either waiting to be started, need to be scheduled, or need change orders done. 

Oh, and don’t forget the proposals that need to be made, payment applications and invoices for the week, and record keeping. 

Sounds like a pretty normal week in construction, doesn’t it? 

This week wasn’t necessarily any busier than normal. It was the need for my involvement in the construction projects that was the big difference. This required a change of focus. I need help! 

One of the things that I struggle with is delegating. By nature, I try to do everything. It is my business after all. Serving my customers well is my responsibility. But me doing everything can only work if I limit what I’m going to do.  

Over the last several years, I have been working hard to figure out who exactly God has designed me to be. What my strengths and weaknesses are.  

As I worked through this process, I have reached a conclusion. God’s intended purpose for me is to help as many people as possible find solutions for building their dreams. Even if they may not know they’re looking for them.  

There is a limit to how many people I can help by myself.  

In Exodus 18:13-26, Moses was trying to solve all the issues of all the people. There were so many people that needed help and he couldn’t help them all. His father-in-law saw this and recommended that he share the load and put his energy and focus on what God had designed him to do…not everything.  

If I am going to help more people and help them well, I must share my load, just like Moses. 

One of the problems of delegation is that too often sharing of the load is done without much clarity or planning. Positions are just filled with the first warm body that comes along and says yes.  

Rather than helping to carry the load, this often just makes it heavier. If you have ever experienced this, it makes it harder to share the load the next time. 

It’s taken me a long time to figure out how to share the load, but I think I’m getting closer. My busy week would have been busier, or less would have gotten done, if it hadn’t been for my Virtual Assistant (VA), Emily.  

I couldn’t have done it without Emily! 

This help became evident as I was talking with one of the subs. He was working on one of the construction projects this week and asked me how I was able to get so much done.  

I told him it was my VA Emily. He said, “I need an Emily.” I told him to find his own, because he couldn’t have mine.   

In construction there are always towering mountains that need to be moved.  

The key to moving the mountains is to share the shovels.  

I am going to be careful and intentional about who gets what shovel. I need to make sure that the shovel and the person using it are a match. 

Now…who’s getting the next shovel? 

Even if delegating is not natural for me. It’s needed if I’m going to fulfill God’s purpose to help as many people as possible find solutions for building their dreams.  

This is a revision of a previous post titled Sharing the Shovels.

What are the Three Ways Heat Moves?

It’s Important to Know This Because Your Money Can Move with It

It’s that time of the year again; temperatures on the thermometer are creeping near the 100-degree mark. This raises the issue of keeping the heat outside and the cool air inside.

This issue is even more relevant if you live in a home that is 40 years old or older.

A home built before the mid-seventies is more likely affected by outside temperatures. Not enough insulation, single-pane windows, and air infiltration are all issues that may need attention.

Understanding how heat moves in and out of your home can help you determine what projects to consider undertaking to minimize the heat. It can also help determine which projects are most important.

There is a difference between heat and hot air.

A basic misunderstanding is that heat flows upward. This is not the case. Although, hot air rises because it is less dense than cool air.

Heat is unaffected by gravity and flows in all directions.

For example, if you apply a heat source to the center of a metal block, the bottom will get just as hot as the top and sides. Heat spreads in all directions and at the same rate.

Hot air is different. When the air in an attic or fireplace gets hot, the air begins to rise. This creates a draft or natural up flow. This is why vented ridges on roofs work so well.

Heat moves through your home in three different ways. Each needs to be considered and will require different methods or products to control this heat transfer:

  • First, conduction is like the metal block example above or the handle of a cast iron skillet on your stove. This is how heat moves through the walls, ceilings, and floors in your home. The temperature difference on either side of a wall determines how fast and which direction the heat will flow through it. The higher the R-value of insulation in that wall, the slower the heat transfer.
  • Second, convection transfer is like conduction, but occurs in fluids and gases. When a cold wind is blowing outside, this increases the loss of heat through the wall more than if the air was still. This is the “wind chill” factor. Convection ovens use this form of heat transfer to cook by moving hot air. This is why they cook faster than conventional ovens.
  • The last type of heat transfer is radiation, which is probably the most difficult of the three to understand. Radiation does not need a transfer material to move heat. This is how the sun warms the earth over millions of miles of empty space or how the top of a steak gets seared in the broiler. Radiant heat transfer is generally more of an issue in the summer but shouldn’t be ignored during the winter. Radiant heat is not blocked by standard insulation, but rather by reflectivity. An example of this would be the way dark colors of roofing, siding, etc. absorb heat and light colors reflect it.

All three of these are to blame for heat entering your home in the summer and leaving it in the winter.

Adequate wall and ceiling insulation, high-quality windows and doors would be a good place to begin. These can be expensive but will give you the biggest return on your investment.

There are several small ways to make improvements, including new weather stripping, filling voids in foundations with spray foam, sealing around electrical and plumbing openings, etc.

Also wind breaks (i.e. evergreen trees or privacy fences) can help.

NOW would be a good time to give some consideration to these issues before it gets even hotter.

Investing in these kinds of home improvements can help keep you cooler in the summer and warmer in the winter. They also provide an economic payback with lower utility bills.

Do what you can to keep the money in your home and minimize it being transferred with the heat.

How Deep Can a Rut Get?

Pretty Deep When the Bottom is Mud

It’s been a few months since Tony pulled his stunt leaving Gene high and dry without any notice. Gene moved on…what else could he do?

Gene replaced Tony with Darin. Darin is less experienced, but at least he has shown up so far. Of course, this may be because Darin doesn’t have anything to drive, so Gene picks him up and takes him home every day.

Gene has been very busy. He’s had a lot of construction projects to do, not to mention trying to keep up with the paperwork. Things seem to be getting busier and busier. Maybe things are going to turn around for his business.

As Gene was on his way to pick Darin up this morning, the truck began to make a grinding noise and it was hard to shift the truck into second gear. It didn’t get any better after picking Darin up and going to the job site.

Then it happened…the transmission went out.

When Gene got to the job site, he couldn’t get the truck out of second gear.

This wasn’t part of Gene’s plan. After getting Darin started framing the walls for the garage addition, Gene went to check out the truck. After messing with it for a while it became clear that it was going to need to go to the shop.

Gene calls for a tow truck and has the truck taken to the mechanic.

Gene goes to work getting the walls of the garage stood. This needs to be done if the garage project is going to be ready for the trusses tomorrow as scheduled.

Midway through the afternoon, Gene gets a call from the mechanic. The transmission needs to be replaced. This is going to cost $3,800, and Gene doesn’t have enough for that.

Now Gene needs to figure out how to pay for the transmission. This means he’s not going to be able to set trusses tomorrow.

Gene calls his wife to see if he could get a ride home. So much for things turning around.

While Gene’s wife is taking him home, he explains the situation. He informs her that he needs to use her car so that he can go to the bank tomorrow. He needs to see if he can borrow the money to fix the truck.

The next day, after Gene drops his wife off at work, he goes to see the banker.

Gene’s credit score isn’t great. After a little pleading with the banker, he gets approved for a loan to get the truck fixed. Gene calls the mechanic from the bank and gives him the go ahead to get the transmission ordered.

The mechanic says it will take a couple of days to get the transmission and then a couple more to get it changed. This means Gene needs to find a vehicle, preferably a pickup, so he can continue working on the garage project.

Gene calls his dad to see if there would be a chance to use his pickup for a few days. His dad lets him borrow the pickup so he can go ahead and work on getting the garage project finished.

It’s been a couple of weeks. Gene got his truck back and the garage project is finished. He’s on his way to meet with the customer and collect the final payment…and he needs this payment. Maybe now things will turn around.

As Gene gives the final invoice to the customer, he can tell that something’s wrong.

“What’s the matter?” Gene asks.

The customer looks up and says, “This is more than I expected. Based on the bid you gave me and what I’ve already paid you. The balance should be $7,500. Why is this bill $9,100?”

“The bid didn’t include windows,” replies Gene. “But after we got started, you told me that you wanted a window on each side wall of the garage. The additional $1,600 is for installing those two new windows.”

“Yes, but I had no idea two windows would be that much,” says the customer. “The price I saw for windows at Lowes was $100. I was expecting to pay an extra $250 or maybe $300 for those two windows, not $1,600.”

“Those $100 windows are nowhere near the quality of the ones I installed,” Gene says. “It cost me more than $300 for each window.”

After discussing this situation at length…the customer agrees to pay $600 for the windows if Gene wants a check today. Otherwise, the customer would let his attorney handle it.

Gene feels like the customer knows that with the truck transmission situation, Gene would settle for what he offered. Gene could take the $8,100 today or get nothing today and fight for the full $9,100.

Gene takes the $1,000 hit and leaves.

When it rains it pours and now the bottom of the rut is muddy.

The Hits Just Keep on Coming

And the Rut Just Keeps Getting Deeper

It’s Sunday afternoon and after getting home from church, Gene is back at his desk (the dining table) working on the third construction bid. He would rather be watching the NASCAR race, but there’s just not enough time for both.

Some people would say that getting three of the four bids done is pretty good. There are a lot of people in construction that wouldn’t sweat this, but it bothers Gene to not follow through on what he said he would do.

It’s getting late and the family has already gone to bed as he starts the next bid.

At 1:15 AM Monday morning, Gene decides to go to bed even though the bid isn’t done yet. He needs to get up in a few hours and do some actual construction work.

It’s Monday morning and Gene is on his way to one of the two projects that he has going. It’s 7:00 AM and he’s supposed to meet Tony at the first project at 7:30.

Tony works for Gene. He’s been working for him now for almost a year. He does good work and knows construction. This allows Gene the flexibility to split up and work on more projects.

Gene starts unloading the tools and getting the things ready that Tony’s going to need. This project is setting some new interior doors.

It’s 8:00 AM and Tony hasn’t shown up yet…Gene calls him, but there’s no answer. Where is he?

This job needs to be done this week.

Tony was supposed to pick up the new doors on his way to the job this morning. Gene calls the lumber yard, and they haven’t seen anything of Tony yet. Gene goes to work, removing the first door that’s going to be replaced, as he waits on Tony.

Still, no Tony, and Gene has three doors out. He calls the lumber yard and it’s going to be a couple of hours before they will be able to get them delivered. He doesn’t want to take out any more until the new ones are installed in these openings. It looks like Gene needs to go get some doors.

Gene heads to the lumber yard to go get the doors.

Gene’s hurrying down the highway in route to the lumber yard when he hears a siren. He looks in his mirror and right behind him are flashing red and blue lights. He looks down at the speedometer and wouldn’t you know it….70 in a 55.

He pulls over and starts getting his driver’s license and insurance information ready. The Highway Patrol Officer comes up and says, “Do you know why I pulled you over?”

“Yes officer, I was in a hurry to get to the lumber yard and get some doors for a job,” Gene replies.

The officer takes the license and insurance card back to his car and Gene waits. While he’s waiting, he tries to call Tony again…still no answer.

The officer comes back and gives Gene a speeding ticket for $150.00.

The day is not getting any better.

Gene makes his way to the lumber yard, gets the doors, goes back to the job site, and gets to work setting doors.

It’s lunch time, still no Tony and he’s still not answering his phone. He must be sick, Gene thinks. It looks like Gene is going to need to stay and work on this job today. He’s already called the customer of the second job to let them know that he’s not going to make it today.

It’s 6:00 PM and Gene got four of the seven doors changed. He’s loading up tools and picking up the job site. He never heard back from Tony, so he’s going to drive by his house on the way home.

As Gene pulls up, he sees Tony’s truck in his drive, so he must be home. He goes up and knocks on the door. As the door opens, Tony is standing there and he doesn’t look sick at all. He does look a little guilty though.

“So, what happened today?” Gene asks, “You were supposed to work on setting doors today.”

Tony looks down at the ground and says, “Ya, I know. I should have called you and let you know I wasn’t going to be there.”

“What happened? Why didn’t you show up or at least call me?” Gene asked.

“Well,” Tony said, “You know that big construction company that’s doing that big project out on the edge of town? I saw the production manager at the hardware store on Saturday and he offered me a job making two dollars an hour more than you’re paying me…and I started today.”

Gene looked him in the eye and said, “So, you took it and started today without even letting me know! I can’t believe you would do that. You knew I was depending on you.”

And the rut just keeps getting deeper and deeper.

A Blueprint for Building a Better Business

You Need a Plan if You’re Going to Build a Successful Business.


It was late on a Saturday night and Gene was sitting at his desk in his home office (otherwise known as a dining table). This was the office of his construction company.  

He was working to get at least one more construction proposal done before going to bed. He had promised four different customers proposals this week. If all goes well, he’ll have this second one finished before midnight. As Gene crunched numbers, he worried that he might have forgotten something. This had happened before.  

He asked himself, “Why am I doing this? I could make more money and work less hours working for someone else. Heck, I’d be better off flipping burgers. This sure isn’t how I pictured my construction business five years ago when I started.” 

“I had no idea that running my own business would be this hard!” 

Gene rubbed his eyes and stretched his back and thought, “I must be doing something wrong.”   

It’s Saturday, and Gene was working like crazy all week, trying to keep up. With production crews not showing up, materials not delivered on time, cost overruns… There’s not enough time to do everything. This means not enough time to get the proposals done. Even if he works tomorrow, he’s not going to get all these proposals done in time. This means he’s going to disappoint at least one of the customers waiting on a proposal. 

This is not a very good way to run a business! “How am I ever going to turn things around?” 

When Gene finishes the second proposal and looks at the clock, it’s 12:40. It’s already Sunday and he still needs to proofread it, print it, and sign it.  

Something has got to change!  

“I’ve been leaving home early and getting home late all week. I’ve hardly spoken with my wife or kids for days. I can’t keep going like this!”  

“I’m tired of trudging back and forth in this rut with no clear way out.” 

Why Is Change So Hard?

This Seems Especially True for Construction

Change is the biggest issue that the construction industry faces. Why are people in construction so bullheaded? They are some of the most stubborn and headstrong people. 

This starts at a young age. As children, we have fewer external experiences to draw from. This restricted resource limits our view. This is why young people think they already know everything. 

This narrow perspective then becomes our standard and we see no reason to change. 

I think this is why resistance to change is so prevalent in construction.  

We’re like little kids that started out working for someone. We learned how they did things by watching them. This is why when we start our own construction business, we think we already know everything. 

I was a dreamer at an early age. I had big ideas and plans for my life. A part of this dream was to have a big, successful construction company. I was going to build great things. 

So, I worked for a few different self-employed contractors and then started my own construction company… 

Because I already knew everything.  

As I grew up and those dreams weren’t happening as I had envisioned…I became disillusioned. I gave up on those dreams and accepted that they were just that…dreams. This is when the grind of life sets in. It was disappointing to accept that this is all there is.  

It was frustrating, just plodding along day after day feeling stuck with no way out. 

Then, one day I was smacked upside the head and had a life changing wake-up call.

In December of 2012, I was literally hit upside the head with a board among other things. We were installing wafer board boxing on the wall of a second-floor addition. I was standing on a plank approximately 8’ above the ground when…it broke. 

Fortunately, I don’t remember any of this ordeal from the time I was measuring until I woke up in the hospital three days later.  

Based on what I was told by the guys that were there when I fell, I hit my head on one of the ladders, then on the concrete slab, and then the board hit me on the head. It sure is good that I have a hard head. Seriously, I was fortunate that I came away from this accident with only a concussion. 

The point of telling you this is that it caused me to reevaluate what I was doing and how I was doing it. 

This incident made me aware that something was wrong and if things were going to change…I needed to change it. As I was looking to understand what was going on, I began to read. The more information I gathered, the more I learned about what needed to change. 

One of the first books I read was The Traveler’s Gift by Andy Andrews. This book teaches seven fundamental decisions for creating a successful life. It gives you a front-row seat for a man’s journey that changes his life.  

In the book, David Ponder lost his job and his will to live. He supernaturally travels throughout time visiting historical figures such as Abraham Lincoln, King Solomon, Anne Frank, and more.  

Each visit yields a Decision for Success that will change his life if he implements them. 

This book showed me that I, like David Ponder, had a choice.  

Was I going to keep doing things the way I had been…or was I going to do something different? 

I decided to change and do something different.  

When we’re young we think we have all the time we need. There’s no need to think about the future…we’ll get around to that someday. Then, one day we wake up and realize life has flown by and we haven’t done the things we wanted to.  

You don’t have to wait until you’re smacked in the head to make changes. 

I made changes to my life and my business. People who knew me before and after can see the improvement.  

Change is a choice, and you can choose to change. 

If you’re in construction and would like to learn more about some of the changes I made and how you can make those same changes, check out solutions for building a better construction business. You can also check out our business building tools and trainings or schedule a free 30-minute construction company consultation to learn more.

What Made You Start Your Construction Company?

If You’re Like Most People in Construction, You Don’t Know…

Last week we discussed how 96% of construction companies go out of business within the first 10 years. This is a problem if you’re in construction.

As I was discussing last week’s post with a friend, he asked me why I do construction. Why would anyone want to start a construction company with odds like this? This question started me thinking about it.

Why is anyone doing construction if the chance of staying in business is so stacked against them? This question prompted me to reach out to some people in construction and ask them.

Why am I doing construction and how did I get here?

When I was growing up, I knew exactly what I was going to do. I was going to farm with my dad, just like he was farming with his. This was going well until those plans got changed.

When I was in my early thirties my dad died of cancer at fifty. This wasn’t a part of the plan.

At that point we were farming together, he owned some of the equipment and I owned some. The problem was, I couldn’t afford to buy his part so…I got out of farming.

In addition to farming, I had been doing some construction in the winter. I liked doing it, was good at it, so this seemed like the logical thing to do.

The problem was I knew construction…not business.

So, why are others doing construction and how did they get here?

To answer this question, I reached out to some people I know that are in construction and asked them the question…Why are you in construction?

I’ve known Doug Wright, with Wright Floor Leveling, for years and have used their company for a variety of projects over the years. They do foundation repair/replacement, crawl space repair, basement repair, masonry repair, new masonry, and more.

Here’s Doug’s story: he did not plan to go into construction…he planned to play football. Then he was injured in college, and it ended his football plans.

His dad was a stone mason and Doug needed a job, so he went to work for him. As things progressed, he became more entrenched in the business, and the prospects for change became harder and harder.

Not to mention that he wasn’t a fan of change.

So, Doug is doing the construction that he knows and is good at.

Chris Schovan is a painter that hasn’t been in business too long but is great at what he does.

Chris learned to paint as a young man from his grandpa who was a professional painter. His grandfather told him that knowing a trade would always give you something to fall back on.

He was working for a pole barn company and/or in manufacturing when the pandemic hit, and he got laid off. Then someone at church needed some painting done and asked him if he knew any painters. He ended up doing this project which led to other projects and he’s now as busy as he’s ever been.

He likes the freedom of schedule because he doesn’t have to punch a clock.

I use Chris because he provides great customer service and does quality work.

I’ve known Josh Dobbs of Flint Ridge Service and his family for a long time. Josh was a firefighter and planned to be fire chief someday until smalltown politics derailed that dream.

While considering what to do next, he was talking with some guys in real estate and the glass business who told him there was a need for someone to do handyman-type things. So, he started doing some odd jobs. As the demand grew, so did his business. Now he does a variety of construction, excavation, and fencing.

He had never done construction before he started doing odd jobs.

Josh uses the leadership skills he learned in the fire department and the ability to see a need and then figures out how to do it.

Leonard Mumford, of Mumford Contracting, is the owner of a full-service construction company. Leonard and I work together in a variety of different ways.

Leonard was in construction years ago and after going out of business, he swore he would never do construction again. He worked in oil field and sales but was miserable. Then he had the opportunity to do some construction work on the side and was making more money part time.

Then his son convinced him to go back into construction…which he swore he never would.

Now Leonard is doing more construction than ever.

The common thread in all these stories is that none of them grew up dreaming about going into construction…playing football or being a fireman, yes, but not construction.

Not everybody knows what their vocation is going to be. Things happen and we have to shift and make changes. These changes, some big and some small, lead us down paths that we didn’t plan for.

This lack of preparation and planning is why 96% of construction companies don’t make it past the 10-year mark.

Three of these five examples here have made it past that point, but trust me, this doesn’t mean that everything is smooth sailing.

All of them have expressed concerns about the business side of things.

This concern is common and why at Solution Building, we’re working to help construction companies with business tools and training to alleviate some of those concerns.

If you would like some help with your construction company’s struggles schedule a free 30-minute consultation.

Chances Are Your Construction Company is Going to Fail

How Can You Change the Odds in Your Favor?

According to the US Department of Commerce, 96% of construction companies fail within the first 10 years. This is a higher failure rate than any other kind of business.

If you’re in construction…this is a problem.

Having been in construction for more than 40 years, I understand how hard it can be to build a successful business. It takes a lot more than just knowing construction to be successful. Knowing business is as important as knowing construction.

Over those 40 years, I became aware of the problems and began to understand them. I gathered information and learned how to implement it into my business.

That’s why I beat the odds.

I’ve learned a lot over those forty-plus years and here are 7 reasons that construction companies fail:

  1. Insufficient Cash Flow – Without a positive cash flow, it is hard for construction companies to keep their doors open. A lack of cash flow makes it hard to pay for materials, make payroll, maintain tools, etc.

When cash flow is negative, companies often make hasty decisions or take on jobs that aren’t a good fit for their company. This can result in further profit loss and more cash flow problems.

  1. Unprofitable Projects – A lot of construction companies fail simply because their projects are unprofitable. Guessing at what a project is going to cost to do is not a very good plan. This is why having a proposal system that is consistent and accurate is essential to staying in business.

At Timber Creek Construction using our Proposal system, we consistently come in 25% under budget. This is in before overhead and profit.

  1. Doing Estimates Rather than Proposals – It’s essential to establish clear communication with construction customers. Creating a detailed proposal, rather than just estimating, gives both the construction company and the customer a clear understanding of what will be provided and what they can expect. Following up with a contract is another step to achieving this goal.

There are as many bad customers out there as there are bad contractors. Some of those customers simply want to get the work done for free. They will argue about things that, they claim, were promised. A signed proposal and contract will help to prevent this from happening. 

  1. No Production Payment Plan – Having an accurate and understandable payment schedule with construction customers will set your construction company on the road to success. Not having a payment schedule requires your company to finance the project and consumes your cash flow. You are not a bank.

In my experience, you need to get some money prior to starting a project. This amount will depend on the size and type of project. Then invoice the customer with weekly progress payments that coincide with the percentage of completed work as outlined in the proposal. Customers appreciate a well-documented payment schedule that communicates clearly.

  1. Not Using Change Orders – Unforeseen issues and changes creep into most construction projects of any size. Changes orders are needed when changes are made to the project’s scope of work. When a job change occurs, the construction company should submit a change order to the customer for approval. Waiting until the end of the job to bill for additional costs will be problematic. It will often result in customers being upset, giving bad reviews, and resisting paying.

Customers get excited about the work that is being done until the final bill comes. Then they find themselves over extended and unable to pay.

  1. Poor Customer Service – Most construction companies don’t listen to their customers very well. These companies just focus on completing the work according to the contract. If they get paid, they assume all is good. But remember, construction companies are in the business of serving customers, this includes communicating clearly and consistently.

Most customers will only do a handful of sizable construction projects in their lifetime. Construction companies should remember this and help them build their dream.

  1. Lack of Organization and Processes – Building a sustainable construction business is impossible when the bulk of the business is operating without being organized. To stay in business, you need processes and systems that can be efficiently managed by the people you hire to help you.

For companies that use sticky notes and boxes full of folders, you have a problem. 

Job leads and customer management, project details, task management, communications, schedules, progress tracking, equipment management, the list goes on and on. Each of these elements is extremely time-consuming, error prone, and can negatively affect profitability and cash flow.

You can avoid making the same mistakes most construction companies make by being aware of and understanding these problems. Then implementing and learning processes and systems to ensure that your company succeeds.

This will help you to be in the top 4% of businesses in the construction industry.

Successful construction companies use business tools to build, increase profits, and manage their businesses. Now that you have a clear understanding why construction companies fail, it’s time to make some course corrections.

To help you with this we have a Business Building Toolbox with tools that can help you change the odds in your favor. We also offer training and implementation of these tools into your business if that would be helpful. If you have questions, schedule a free 30-minute construction company consultation.