Jul 27 2008

The Easy Way or The Hard Way?

Published by Ron under Business Systems

Are you like most of adults who wish they had followed more of their parents’ advice?

It’s usually “Dang. Dad was right about that.”

That’s really a hard part of growing up. Accepting that we can learn from others’ mistakes, especially our parents’.

And note that I said mistakes, not successes.

Let’s face it, everyone learns best from mistakes, whether our own or someone else’s.

Yet, we all try to pattern success. Why is it so hard to pattern success? Why is it so hard to replicate another contractor’s approach?

Well, the approach we are trying to following almost always resulted from the combination of many factors coming together almost magically. Typically, our situation is different enough that the EXACT same approach will not work for us.

You have noticed that, right? No matter how much you try to follow the approach of a contractor peer, you rarely get the same results?

So, who should you turn to when trying to fix a problem that is (1) costing you money, (2) distracting you from the core tasks of growing your business, and (3) you’ve tried to solve multiple times unsuccessfully?

A. Yourself?

B. Your peers?

C. A professional?

The proper choice depends on your situation…but rarely is “A” the easiest choice.

Not to say you will not eventually solve the problem by yourself, but it may cost you a lot of money and headache along the way just for the benefit of “saving face.”

Choice “B” has worked well for many contractors when they could find someone in their trade who serves the same type of customers, is willing to truly share their secrets, and truly understands why their approach worked and how to adapt it to other situations. Peers who meet all three conditions are very hard to find.

Choice “C” is, quite honestly, the easiest path.

Find a professional who knows which basic solution will work best in your company and who knows how to customize the solution for your exact situation (including customer tendencies, employee personalities, and your personal skills and makeup).

Most consultants who have been around for awhile, have rolled out their solutions into several firms and have learned what works and what doesn’t work…and why.

So, if you are struggling to grow your business and continuing to fight the same fires, which path are you going to choose?

The easy way or the hard way?

Until we next chat - best of luck with your business,

Ron Roberts,
The Contractor’s Business Coach

No responses yet

Jul 24 2008

Something Really Cool Is Headed Your Way

Published by Ron under Financial Control

Attention Contractors, Developers, and Home Owners:

Keep an eye on the blog. As soon as I get the green light, I am going to be telling you about a new service that is very, very cool and way over-due.

The service is going to eliminate many of the payment headaches contractors and suppliers suffer while giving the client far greater security and support. The service is not quite ready for full roll out. The team who has dreamed up and deployed the online tool is still beta-testing the user interface.

It’s going to be a service you’ll want to use as frequently as possible. It’s that good.

Stay tuned.

Ron

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Jul 23 2008

What Problem Should You Fix First?

Published by Ron under Business Systems

Recently, while trying to explain what my client and I had already achieved together and why we were getting ready to focus on something that didn’t appear to be a pressing need, I stumbled upon a concept that you might find helpful with your business.

What I knew, and my client was about to find out, was that despite having a six month backlog of work he didn’t have any systems in place to ensure that he would have plenty of work at the end of the six months.  He didn’t understand why it was so important to address the situation now.

After stumbling around making various points and observations, it finally dawned on me that his business was straddling two different plateaus of performance and neither where the plateaus we are gunning for.  I hopped over to the whiteboard and drew a little chart that showed the four possible stages of business.

1. The Threat Stage

2. The Stability Stage

3. The Freedom Stage

4. The Great Wealth Stage

A business will never reach the Freedom Stage while still facing serious threats. Another way of saying it is that a business must be fully stabilized before freedom is possible.

Proven systems are what bring stability and eliminate threats.

In my client’s case, we had just put the finishing touches on his operations management to reduce the odds of blown budgets and negative surprises.  So we had stabilized his operations.

What we hadn’t stabilized was his sales and marketing.  Hopefully you realize that ineffective sales and marketing systems are far more threatening to your financial health than are operations systems.

The point I’m trying to get across is that you can look at each one of the areas of your business and ask yourself “Have we put in place a system that greatly reduces our risk?”

If not, invest time to implement those systems. Working on the systems that are completely broken or missing  will pay far bigger dividends than working on systems that are already functionally okay and realistically pose minimal risk.

Food for thought.

Wishing you great success.

Ron

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Jul 20 2008

Ever Been to Michigan’s Upper Peninsula?

Published by Ron under Uncategorized

Good Morning All,

How about a few thoughts from the road?

I am sitting in the Houghton County Airport in Michigan’s UP.  If you ever get the chance, visit this area. It is absolutely stunning!

Kayaker’s paddling up and down the lake. Water front homes sitting along side restaurants and businesses. Hills with winding roads. Old copper mines dotting the landscape.  Amazing.

Spent a long day with my client who is headquartered here. We were both excited to see that his financial position is very, very sound. His banker must be thrilled with his balance sheet. Seeing a contractor who had actually significant wealth in the business was quite refreshing.

As usual, once I got face-to-face grilling my client on the position his business was in, the real threats were not the ones he thought they were. We had already put in place the systems needed to assure efficient field performance. He believed operations was his biggest threat. Turns out he needed to redirect his strategy and turn up the heat on his marketing and sales efforts.

He’s off and running. Back to KC.

Hope you have a great week!

Ron

No responses yet

Jul 07 2008

It’s Getting Tough Out There

Published by Ron under Marketing

The construction market is quickly becoming survival of the fittest. The weak are not going to survive.Their errors will become too great to overcome. Welcome to life during a recession. You may be too young to remember what a real recession feels like. You’re about to find out.

I am hearing two stories from contractors these days: many have no work at all and others are actually doing quite well. The middle ground, the place where most contractors lived, has all but disappeared.

Contractors who haven’t set their sales and marketing engines to full throttle are asking for trouble.The contractors who are doing well all appear to have well established marketing and networking systems. They’ve spent years building up and taking care of their contacts. That past effort is paying off in spades.

If you aren’t busting your butt chasing working and promoting your business, you’d better get started. Good work is not going to walk through your door. You’ve got to dig it up before somebody else does.

Bid prices are dropping like rocks. Your competition needs work and is willing to take it close to cost just to keep their crews and equipment busy.  That’s not a game you want to play. You need to find a better game because the truth of the matter is…

Recessions shake out the week business owners.

That’s why many economists believe mild recessions are a good thing for the overall economy (of course they are turning a blind eye and deaf ear to the suffering of the masses who don’t have the financial safety net to weather the storm easily).

The owners who don’t  know how take care of their customers and their staff are going to lose.The owners who can’t see past the immediate almighty dollar are going to lose.

It really is going to be survival of the fittest. The only saving grace is the government’s tried and true formula for breathing life back into the economy: huge federal construction projects. You might want to begin positioning yourself to take advantage of the opportunity that is likely to arise.

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Jun 23 2008

Are Contractors An Endangered Species?

Published by Ron under News & Notes

PRESS RELEASE

FOR IMMEDIATE RELEASE: 6/23/08

Polar bears were just granted “endangered species” classification, and while it’s probably a good thing, the certification does little to help another endangered species: the contractor. “It is not hyperbole to assert that the contractor in the United States, and in the world, in general, is being moved, one step at a time, towards extinction,” so says Lee W, Dodson, owner of thecontractorsside.com, a resource site for the worldwide construction industry.

The Los Angeles Times has noted recently that “the supply of good contractors is twenty years behind the demand,” and yet those who enter the profession have become the most maligned of businesspeople.

In its efforts to gain recognition of the contributions of the small contractor, thecontractorsside.com has worked to reveal the true nature of the business climate for one of the prime ingredients to the economy.

To further that effort, thecontractorsside.com has launched:

DIRTY ROTTEN CLIENT EVENT

OVERVIEW

http://www.thecontractorsside.com in association with BUILDERnews Magazine and http://www.filthyrichcontractor.com will give a business consultation to one contractor or contracting business who writes the most interesting story of their encounter with a bad client, supplier, official, or another contractor.

The business consultation will consist of a two hour evaluation of the contractor’s business and set up of a viable business model, then it will followed up by two one-hour follow up consultations to make sure the model works.

The consultation will be conducted by Ron Roberts of filthyrichcontractor.com, a well-known and respected business model consultant dedicated to the particular style of the construction business.

The discounted value of the program, available to members of thecontractorsside.com, is $1000.00, and Ron has testimonials that say it’s worth $100,000.00 if the construction business is in trouble. By registering on thecontractorsside.com and posting the experience the poster gets it free.

The story does not have to be well written, but it does have to lay out the facts of the business relationship. With well over a hundred years aggregate experience in construction, the event will be judged by people who know the business, a panel of nine regular people from all over the country connected to the business:

http://www.buildernewsmag.com

http://www.hometalkusa.com

http://www.contractors-united.com

http://www.4allcontractors.com

http://www.filthyrichcontractor.com

http://www.aehcc.com

http://www.ondemancreations.com

http://www.thecontractorsside.com

http://www.helloworld.com/srstgary

In addition to the opportunity to get the best advice keyed to your particular business, thecontractorsside.com has arranged with BUILDERnews magazine to give a free one year online subscription to the publication to each registered user of thecontractorsside.com up to ten thousand new users or repeat posters.

The magazine is a terrific source for business info, well produced, smart, and professional. It could end up to be the best source for industry news and comment this year. If bought at the news stand, the year price would be $48.80, by registering and entering, the DIRTY ROTTEN CLIENT gets it delivered monthly right to the poster’s computer.

HERE’S HOW

Go onto http://www.thecontractorsside.com.

Register. Participation is limited to new registers or repeat posters

Fill out the form.

The poster tells the story. Keeps it clean and factual. Tells what happened. Tells what the problem did to his or her business, what it cost both financially and personally.

Anonymous postings may be requested.

Every post is read and evaluated according to a point system.

Early entry is advised as the competition closes July 8th.

The winner will be announced on Michael King’s Home Talk USA Saturday July 20th at 9:30 am CDT. Only one person will know the name of the voted winner, and she will reveal it to Michael King on the air.

Other prizes may be awarded to runners up the same day and time.

Digital BUILDERnews subscriptions will be awarded on a first come, first served basis up to 10,000, and will be automatically subscribed to the email address on the registration page.

If you drive on it, work in it, or live in it, a contractor built it.

“This project is designed to bring the downs of the business out of the shadows,” said

Dodson. “We’re particularly grateful that publications like BUILDERnews see the problem and are providing tangible support. As we are for the Michael King of Home Talk USA, and the other judges of the event.”

Will anybody listen?

“We believe so, but this one project will not be our last stand. We have a couple of other surprises coming within the month.” Dodson grinned. “We’re waking our members up to the power of the internet. Should be interesting. The market is smart, we want the contractors to get just as smart.”

Hope you find the time to participate.

To your great success!

 Ron

8 responses so far

Jun 20 2008

Radio Interview w/ Home Talk USA

Published by Ron under Housekeeping

For those of you gluttons for punishment, I will be on the radio tomorrow morning Saturday June 21st. The show is Home Talk USA hosted by Michael King.

Michael has invited Lee Dodson of the ContractorsSide.com and myself to kick off a little contest.

The spot will air sometime between 9:30 and 10:00 AM Central. To find a local station that carries the show click here.

Tune in to find out more. Call in to the show if you have questions.

2 responses so far

Jun 15 2008

You’re Not Done Until Your 100% Done

Published by Ron under Business Systems

The headline could, and maybe should, refer to punching out a job but today it refers to installing processes and systems in your business. Just like with construction projects, finishing off the last 5% of the implementation of a new business procedure seems to take 50% of the total time. The last 5% is painful, boring, and annoying…but it must be done!

A recent marking email I sent out to my newsletter reader list brought this point to mind. In the email I promised to share the secret to keeping crews on time and in budget. (Side Note: marketing emails to the list are few are far between.)

A bunch of contractors emailed or called in to learn the secret as they were struggling with their crews. A handful of these contractors had 95% of the solution in place yet they hadn’t completed the last few steps and therefore weren’t receiving the desired results.

It really drove home the point that if you don’t finish something 100% you will not receive the benefits you seek. In the case of construction projects that translates to not getting back your full retention.

So here’s my tip: Dad was right. If something is worth doing, it’s worth doing right.

Don’t let up until you’re done. In some cases, such as with keeping crews on budget and schedule, the follow through requires daily action.

Hope this helps you move forwards.

Take care,

Ron Roberts,
The Contractor’s Business Coach
913-961-1790

One response so far

Jun 13 2008

Sound Advice for Lean Times

Published by Ron under Financial Control

Good Morning~

Happy Friday the 13th. It certainly started off on a bad foot around my town. Nasty storms passed through during the night. If we get any more rain, Noah better bring his Ark.

Things have been hectic around here. Chasing leads. Helping clients grow. Networking with people from coast to coast to find valuable information for contractors. Meeting with my new business partner, Guy Gruenberg, to lay out our plans for the membership site.

My day was politely interrupted yesterday when an email arrived from an associate. He sent me something to look at that really needed to be shared. He gave me his blessing.

From time to time, I am motivated to pass along helpful guidance generated by friendly “competitors”. Hopefully, it is further proof that I am committed to serving your best interests with this blog and my newsletter.

Bruce Cotterman sent me the following to look over and quite honestly I thought it was spot on for protecting yourself during these lean times. Should you choose to reach Bruce after reading his advice, please let him know that you found out about him from the FRC blog.

How to Protect Your Financial House During Lean Times

Start now managing for the slow down and start making the painful decisions while you have the staying power. Weather the storm staying true to customers and suppliers and you’ll be positioned to lead and see double digit growth with price premiums when it’s over.

1. Cash flow is King, manage weekly if not more often from this point forward.

Talk now with your accountant, set up weekly cash flow reports

Start building up your cash on hand

2. Time to start reducing overhead costs

Reduce inventory, hold off on purchasing and unload what you have, discount if needed

Reduce payroll removing non-performers (hold onto performers)

Better to do it now while they can find alternative work rather than later if the economy tanks or approaching the holidays

Place on hold any acquisitions, maintain existing equipment (there are exceptions)

Say no to any un-necessary purchases or spending

3. Aggressively start collecting on Accounts Receivable NOW!

4. Pay your suppliers. When times get tough, they’ll remember you and help you.

Ask them what they are seeing?

Ask them for business referrals as a dependable contractor

5. Make a personal visit with your bank where you have a rotating account

Let your bank know the actions you are taking.

Ask them what they are seeing?

5. Market and sell as if your survival depended on it.

Promote your staying power and warranties to counter the fly-by-night contractors.

Keep advertising going to keep the pipeline filled, but nothing extravagant .

Hustle

Use the web smarter

Offer competitive rates by promoting discounts rather than lowering prices

6. Talk to your staff and performers. Let them know that you what you are doing to weather any slowdown.

DO NOT HIRE. Use 1099 sub contractors and temps for now.

Do not worry about releasing non-performers. The performers will understand and appreciate not having dead-wood around.

7. Use the slow down when it occurs for planning and positioning including some marketing when the economy returns strong.

Bruce Cotterman of The BAS Group in Atlanta, Georgia, provides management consulting and marketing services to small to medium size businesses. www.theBASgroup.com

One response so far

Jun 06 2008

Time to Help Repair the Reputations of Contractors

Published by Ron under Housekeeping

Our friends over at www.thecontractorsside.com are doing their best to repair the reputation of contractors nationwide. They have started a grass roots campaign to force an LA Times writer to publish a pro-contractor type article. They are making gain with him but could use your help. Please read the following letter to the editor and then email your feelings to Mr. Lopez.

Here is the original correspondence from Heather Aitken:

Please email the following letter to the editor to the Los Angeles Times (robert.lopez@latimes.com) and then send it on to ten other contractors and so on, so we can let the press know how honest contractors feel.

Thecontractorsside.com

Here is Lee Dodson’s letter to the editor:

Dear Mr. Lopez,

I read with interest your story on unlicensed contractors being busted.

This is of interest to legitimate contractors everywhere, however, I do not see and have not seen one article anywhere, in any publication, that gives favorable mention to the contractors who slug it out every day in a tough business.

Contractors already know that unlicensed contractors hurt the business, but reports of this nature tend to tar all contractors with the same broad brush. In this state, contractors operate under the most stringent rules in the country,

Contractors must not only be licensed, they must carry a bond, must carry workers’ compensation insurance or self insure, and are required to go to mandatory arbitration without recourse to appeal in the case of dispute.

Add to these facts that the codes and regulations, price increase in permits, and heavy zoning restrictions, and the cost to the contractor has skyrocketed in the past few years.

The customer does not know the intricacies of the business of contracting, nor does the customer care. He looks at price, and there is where the cheap guys see an opening, i.e. unlicensed contractors.

The licensing process (testing, evaluating, authorizing) is fairly good, but the process needs streamlining. It can take months to move forward. But after the licensing process is successfully completed, the licensing entity becomes the adversary of the contractor, rather than becoming the ally. The Board becomes solely an advocate for the consumer, leaving little doubt that the contractor bears burden of proof of innocence.

Accusations of malfeasance against the contractor weights in favor of the contractee, and the contractor bears the total burden of expense while the other party simply shows up, the State on his side.

The bonding companies, knowing they own the contractors’ business, can charge maximum fees for a “required product,’ and they do. In my investigations into bonding companies, I have found not one contractor who has received the advertised “preferred rate” for bonds. Bonding companies do an absolutely perfect “bait and switch” maneuver that nearly always results in doubling the original cost of bond.

Workers’ Compensation packages soar in expense as another “required cost of business.” Due to the overwhelming number of fraudulent claims, the snail-like pace of adjudication and settlement, the ineptitude of investigators, the onerous medical proving up, the system is burdened at more than quadruple its capacity, thereby increasing costs to the insured which, in turn, is passed on as increased cost to the end user.

Add to these facts the unending number of stories of “bad contractors” who rip off the clientele, and any story, repeat any story, dealing with the construction trades rises to a tacit indictment of all contractors, unlicensed or duly licensed.

One might ask if the licensed contractor has any recourse but to report unlicensed contractors, and the answer is no. Most contractors are loath to become involved with any authorities over any but the most egregious of violations because it does not serve their interests and because most contractors want to stay off officials’ radar. Anonymity is the best protection.

One might further ask if anything has been done to help small contractors. Again, the answer is no. Legislatures and government bodies have done absolutely nothing, passed no laws, written
no new regulations to help those whom “if you drove on it, if you work in it, or if you live in it, a contractor built it.”

Courts have been no better. In Southern California, according to the L.A. Times, seventy-five per cent of all civil actions involve construction related cases. My research indicates that the contractor may as well stay on his or her current job to make the money he or she will need to pay off the judgment because, from Small Claims to Superior Courts, eighty-five per cent of the time the ruling is for the client.

This anti-contractor attitude has evolved from a belief that contractors make a killing on every last project. The reality is that most small contractors work to a less than twenty percent markup that is rarely achievable. Most small contractors do well to reach a ten per cent profitability, if that.

Across the nation, the situation is remarkably the same. Since I launched my website:
http://thecontractorsside.com, I have heard from thousands of contractors the same series of complaints about identical issues, but the one foremost complaint is the use of official bodies and rules to either reduce payment, or to not pay at all.

Why is this complaint so common? The easy answer is that there are a lot of cheaters out there, but it could well be that cheating has become institutionalized as a product of unbalanced regulation on a business which may be the only business in our country that remains unable to be outsourced.

I heard recently from a contractor who boasted he had never been stiffed on a payment in
his twenty-five years of plying his trade. I thanked him for his call and asked if he might
have any advice to contractors who had not been as lucky. He rattled off a few well-known
practices and said if a contractor followed the rules, he would be paid. I thanked the man
and sat down to write my constituents his wisdom.

Yesterday, the same contractor called with the news that while he had played by the rules, done his due diligence, he had just yesterday been stiffed for $8000.00. He was still stunned by the event. Needless to say, he registered on the website ten minutes later.

What can be done to improve the lot of the small business contractor who has next to no power with officialdom or media?

Because the small contractors have no true advocacy aside from small publications and loosely organized trade associations, they have limited access to redress, and few speak on their behalf.
Their sole recourse is to become educated as to their market, and that means sharing information. There are business seminars and coaching institutions which can help in the “business” of the business, but these entities focus on individual practice rather than a group effort towards commercial overview. Again, the contractor is isolated, insulated from information essential to the conduct of informed practice, i.e. good customer, iffy customer, bad customer up to and including suppliers, officials, banking institutions, architects, and engineers.

No one shows any intention of taking the contractors’ side, therefore, the contractor must take his or her own side in the work of improving the business, and this means in the area of policing not only unlicensed contractors, but also in the area of policing every area of
contractor-societal interconnect, including self- and client-education.

If contractors initiate the improvements, the effect can be far-reaching and effective, but they must take action to preserve the small business venue.

If the small contractor opts out, the results for the economy can be disastrous. Prices for construction will soar when the only bidders are large companies who perforce control the market.

It is said that this country runs on small business. It employs more people than major corporations, provides more peripheral and entry level jobs, is more responsive to market pressures, is more highly creative is problem solution, and is truly the backbone of the nation.

The contracting business needs some good news and good press.

http://thecontractorsside.com is the only resource for this kind of information and the only established advocate for the contractor. If you want to know what’s happening in the construction business where it really matters and where to take action, this is the place.

I am cc’ing this message to my constituents so they can sign onto it in agreement and
send it to you so the thousands of diligent, honest contractors can finally get some credit
where it is due.

Respectfully,

Lee w. Dodson

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