Seven features of a successful building company

Pretty much everybody who starts out in business has a dream of one day owning a successful and profitable company that provides them with a comfortable and enjoyable life. Some builders achieve this, which is great, but many don’t. Many suffer a rollercoaster of emotions and financial results and seldom feel in control of their destiny.

1In my years of working with builders I have seen successful builders who still want to do better and struggling builders who just want to reach some stability. I have helped builders at both ends of the scale to move to a better place and over those years I have seen a pattern of where success comes from and how to assist in replicating it. Although there are many factors that go into growing a successful company, I have picked my top seven to feature in this article. Get these right and you are well on the way to achieving your dreams. Have a plan and implement it It would be extremely unusual for you to start a building project without a set of plans to guide you in its construction. These plans are usually very comprehensive and come with a long list of specifications. Why is it then that most people attempt to build their business with no plan? A business plan acts like a rudder on a ship. It helps to keep you on course for where you want to go, helps make minor course directions when external forces push you off your path and helps keep you away from dangers. But it can be 2 confusing. Google “business plan template” and you receive about 1.5 billion results! Total overwhelm and most plans don’t suit your average Kiwi builder. That is why I typically use a simple one or two-page plan model for my clients. It provides the longer-term direction you need but is also 3 useful in focusing on the short-term actions needed to make real progress. The best plans are useless however if they are consigned to the bottom draw and seldom, if ever, referred to. A plan won’t magically make your business grow by sitting in a drawer. It must be implemented, adjusted, actioned and updated on a weekly, quarterly and yearly basis. It should be a systematic process that ticks periodically, not just a one-off event that is then forgotten about.

Confident, but not cocky Being in business, especially construction, is not for the faint hearted. It is a hard, risky business and sometimes hard, risky (but not too risky) decisions need to be made. Making those decisions and bringing people with you requires a level of confidence. Making no decision in a situation can often be worse, so the ability to gather the necessary information, seek others’ opinions and then make a decision is vital to keep your business moving forward. Having a plan with a clear vision and mission to guide you will also help. Part of the decision-making process is checking whether a particular decision will take you off course or help you to stay on course. Having the right level of confidence will help push back against overly demanding customers who are attempting to drive down your price and deny you a fair profit. You need to have the confidence to hold a sustainable price or walk away. But you need balance. Letting your ego get in the way can be as bad as being too meek and not making a decision. The best business owners I see are those who are confident, but not cocky. The sign of a good leader is someone who can park their ego, be more humble and seek the opinion of others. Someone who takes the blame on themselves when things go wrong and praises the team when things go right. “Whether you think you can or think you can’t, you’re right”. – Henry Ford Know your numbers You cannot hope to keep a construction company on track for success unless you have a reasonable understanding of the key numbers in your business. As mentioned earlier construction is a hard, risky business. It is also rather “lumpy” in its cash flow and sometimes A plan won’t magically make your business grow by sitting difficult to read what the underlying trends are. Because of these features it is even more important to develop a regular reporting process, so you are better able to take some in a drawer. corrective actions sooner when things are trending the wrong way. By the time your accountant gets round to completing your end-of-year accounts, it may be too late.

Put some measuring processes in place and then get in the habit of looking at the numbers on a regular basis so you can better control your business and therefore your life.

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You need to know: 5 • Larger volume of leads (maybe). • how much monthly revenue you need; • what Gross Margin you need to be hitting on projects; • how “liquid” the company is; • how efficient your labour is; and • how are you running against your budget. I would guess that less than 20% of builders have a really good handle on their numbers on a regular basis. Guess what? These 20% are probably making the best profits. So, what are the key areas of your company that you would like to have more up to the minute information on? Do you have some SPECIFIC targets you are aiming for on an annual basis? Put some measuring processes in place and then get in the habit of looking at the numbers on a regular basis so you can better control your business and therefore your life. Build a great team and lead them 6 Ask most people in business “who is the most important person in your company” and most will answer “the customer”. Hard to argue with that because without a customer you don’t have a business. I believe first equal place should be “your team”. And by team, I don’t mean a bunch of labour-only subcontractors who float in and out on a whim. By team, I mean a group of motivated and engaged members, who share in your vision and mission and who you can rely on, to consistently deliver the standard and volume of work that aligns with what the customer is paying for. It may take you some time to develop such a team, but it is vital to allow you to build a true business that relies less and less on your own efforts and more and more on the team below you. It comes down to your leadership and how you delegate down responsibilities and resources to your team. In the book Extreme Ownership, the authors say, “There are no bad teams, only bad leaders”. Being a good leader is therefore vital to the development and performance of the team. You should spend some time developing the skills and systems that will help you become a good leader and train your foremen and supervisors on how to be good leaders too. Pick a niche and dominate With the construction industry so buoyant currently, why is niche marketing so important? That’s a fair question and many builders prefer to go wide with their customer target for fear of running out of work. Being a generalist does have its advantages. • Different job types to help with team skill training. Actually, that’s about all the advantages I can think of. Looking at developing a market niche (or two) to focus on may appear a braver path to go down, but being a bigger fish in a smaller pool, rather than a small fish in a bigger pool, has its advantages too. For example: • More effective advertising • Cheaper marketing costs • Being viewed as the expert • More efficient (thus lower cost) field operations • Able to charge higher prices • Better understanding of customer needs and emotional “hot buttons” I think the benefits outweigh the negatives, if the niching process is carried out well and followed through consistently. Leads in nonniche areas will still probably come to you anyway, from past clients and the like, so you can still say yes to those jobs if you wish. The niching process is more in how you proactively market your business to attract new leads in your favoured area. So, how could you niche your business? Build a solid sales process Selling is often an area that builders feel uncomfortable in. Images of used car salesmen come to mind, twisting peoples’ arms up their backs to cut a deal on a car that may not even suit their needs. Selling however, is a vital area in business and thankfully like any business skill can be learnt and refined. Most people are not natural born salesmen. Many of us are a bit introverted and prefer to be out there building stuff, rather than quoting jobs and trying to convert them into future work. Therefore, developing a clear and documented sales system framework will help. It enables you to focus on improving the PROCESS, rather than just feeling you need to improve your personal sales skills. A good sales system will help you: • build better trust with customers quicker; • filter out the time wasters; • move customers steadily along the process; and • make it seem way more unpressured and natural.

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Get you out of the ship’s engine room and on to the bridge!

As your business grows you may even have other team members take over the sales function from you, so having a documented process to follow will help facilitate this.

Which brings me on to my last point…

Build systems to replace yourself Michael Gerber in his book The E-Myth, talks about the journey of a business owner from Technician to Manager to true Entrepreneur. Most people do not make it to the entrepreneur stage and become stuck at the lower levels. The hardest level to go past is often the technician one. This is where the owner feels that he or she must do or control everything themselves – “Nobody can do it as well as me” or “I don’t trust anyone else”. This is a recipe for burnout.

In order to move the business to a place where it can really grow and flourish, you need to be able to develop and document systems to help do the heavy lifting for you. Systems allow you to consistently produce the same results for customers without you being everywhere. They will prevent 7 fires from breaking out and allow you to move out of lower value task areas and focus on the more important areas of the business.

For help in reviewing your business strategies and direction reach out to me for a complementary strategic review session. Email: andy@tradescoach.co.nz or call: 027 688 6721.

Andy Burrows, Director of The Trades Coach and NZCB National Partner. I encourage you to take advantage of a free business strategy review session to see how we can improve your business performance. Call Andy today on 027 688 6721 or email andy@tradescoach.co.nz.

Sustainability updates

Environmental sustainability continues to be a high priority at Winstone Wallboards. Throughout 2021 we’ve been working to improve our sustainability position particularly around improving the availability of plasterboard offcut recycling options.

GIB® Plasterboard Offcut Recycling

Working with a diverse range of waste collection businesses from around the country plasterboard offcut site collection services are currently available in Auckland, Nelson, Christchurch and Queenstown with further regional services on track to be introduced throughout 2022. There are also a growing number of regional council offcut collection points at landfill sites as well as a growing number of composting companies looking to accept plasterboard offcuts into their operations.

Why does this all matter? Because not only does it reduce the amount of waste going to landfill, but the gypsum that’s extracted from the plasterboard offcuts is reused for compost and other agricultural products.

To learn more about recycling options for GIB® plasterboard including a list of current providers go to gib.co.nz/ sustainability/

Minimising Plasterboard Waste

Most of us know that plasterboard offcuts are among the largest contributors to site construction waste, and to effectively tackle the problem everybody has a part to play. Clear ownership and accountability for waste minimisation, both during design and construction, is essential, and reducing the amount of plasterboard waste created on site is a vital piece of the puzzle. That’s why our team has developed a series of practical steps to help installers with ‘Onsite Tips’ and designers with ‘Design Tips’ to support the building industry minimising construction waste especially as landfill disposal costs continue to increase year on year.

Composting Guidelines

Why you should consider including Gypsum into composting products is outlined on our ‘Plasterboard composting guidelines’. It covers best practice guidance through to the many benefits composting brings

Environmental Certifications

Winstone Wallboards’ holds a number of environmental certifications to help support your project including an Environmental Product Declaration (EPD) for GIB® plasterboard and other certifications such as Global GreenTag and Declare. In 2021, GIB Aqualine® , GIB Weatherline®, GIB Barrierline®, GIB Toughline® and GIB Toughline® Aqua became the GECA (Good Environmental Choice Australia) Ecolabel certification which is a recognised ecolabel on both sides of the Tasman.

Moving in to the New Year and reflecting on 2021, we take great pride in our achievements and new partnerships. But the journey is far from over, we look forward to having an even greater impact on all things green in 2022 and beyond.