Metal Construction News, February 2021

By George Hedley PROFIT BUILDING Fix What You Need to Fix Starting the year off right for your construction company without a written list of improvement areas a specifi c business plan measurable goals or a budget isnt a good idea if you want to grow improve make more money or get to the next level To improve your bottom line profi t margin takes a plan to make it happen You cant just hope by working harder you will make more money Making 1 or 2 more net profi t starts by identifying things you can change improve or fi x You might need to hire stronger managers standardize your change order rates implement a monthly project management review process develop a job checklist for areas that continually cause mistakes or upgrade estimating software programs What Do You Do to Fix Your Company So what are you doing about making this upcoming year better than last What changes are you going to make to improve your projects people productivity profi ts systems or results What are you doing about training your future workers foreman or project managers to become the company leaders you need What are you going to stop doing and or start doing different to improve the value of your business secure better customers make higher margins or get a higher return on your investment Spend Money to Make More Money Successful companies invest time to get their management team together to stop and look at whats working and whats not After reviewing their results they analyze what they need to do to improve over the upcoming year And then to make sure they achieve results they want to hit they meet monthly to update their progress and make the adjustments to keep on track and continue heading towards meeting their annual goals As a contractor business coach I often facilitate these annual company management meetings for clients As a team we work together to draft a FIX IT LIST of the things they want to fi x and improve over the next year Some contractors are able to organize and create successful management teams and business plans by investing in workshops or books to learn how to develop their own business plans or blueprints And others have better luck hiring a professional consultant or coach to assist with the process Whatever your method is it still takes time money and dedication to build a better company What Do You Need to FIX Twelve months from now what accomplishments changes and improvements do you want to achieve Where do you want your company to be What will make your next year results better than the past year What problems do you want to go away and never happen again What people processes procedures and systems do you need to add implement reinstate eliminate or improve What problems regularly occur in your company that need to be fixed or eliminated Start by making a list of things that went wrong cost you money shouldnt have happened or other areas to improve My observation is that the same problems and challenges keep ending up on FIX IT LISTS for construction companies large and small Take a look at these common FIX IT LIST items many construction companies have on their list First check off each area you would like to fix or improve over the next year Next rank each area as a top priority to improve A medium B low C or not an area that needs improvement 0 FIX IT LIST PRIORITY CHECKLIST Management Team Set regular meeting schedules Develop a management team Delegate responsibilities to team Develop and track company goals Review fi nancial results monthly Estimating Develop accurate estimates Upgrade estimating software Maintain job cost history Standardize burden rates Standardize change order T M rates Eliminate missed items Improve subcontractor and supplier coverage Business Development and Sales Improve bid hit win ratio Seek higher margin work Bid against less competition Manage customer relationship program Manage referral program Improve proposal and presentations Project Management Eliminate profi t margin shrinkage Develop PM standards and systems Improve turnover from estimating Create contract writing standards Improve scheduling system Improve change order management Develop job close out system Field Management and Production Manage weekly job cost tracking system Update scorecards for foreman and supervisors Upgrade scheduling and logistics Eliminate call backs and punch list Standardize fi eld meeting agendas Set standard job and crew rules Systemize equipment management People and Organizational Chart Clear chain of command Eliminate poor performers Hire positions needed Develop better hiring system Manage training program Employee review system Results based incentive program Accounting and Administration Upgrade software Provide timely fi nancial results Improve collections system Now that you have created a working list of your highest priorities to improve over the next year get your management team together and whittle the list down to a short list of your top fi ve must do priorities Start with only fi ve priorities to fi x fi rst to keep it simple and achievable Too many companies try to fi x 30 things at once and fail instead of creating victories by fi xing their main problem areas fi rst Assign team captains to work on each of your top fi ve improvement areas Ask them to gather a team to help them create a standard or system to fi x their assigned problem Also develop a deadline for each area of improvement When a standard or program has been created for the different areas you can then move on to the next top priority to start working on next Take Time Now to Fix Your Company I get calls all the time from contractors wanting to make more money get their companies organized and systemized and do what they need to do to build a better business The process always starts with identifying what they want and where they want to be in one three or fi ve years Get your team together and take the time to list out what you want and what changes are needed to achieve your goals George Hedley CSP CPBC helps contractors grow and profi t as a professional business coach popular speaker and peer group leader He is the author of Get Your Construction Business to Always Make a Profi t and Hardhat BIZSCHOOL Online University available on his website To help get the improvement process started email gh@ hardhatpresentations com to get a copy of Georges BIZ BUILDER BLUEPRINT worksheets Visit www hardhatbizschool com for more information February 2021 METAL CONSTRUCTION NEWS 9 www metalconstruct ionnews com