Too Busy to Build a Better Business?

The strong economy has lifted almost every contractor’s boat to a higher level at a faster pace. With more work comes more stress, more decisions, more commitments, more mistakes, and more things to get done. It also stretches your resources, time management, and ability to stop and plan your future. And the important question: has the additional workload increased your bottom-line and allowed you to reap the benefits of owning a bigger boat?

When you allow a heated economy to push your boat faster and faster, you get out of control like streaming down a rapid river without a rudder allowing the elements to take you where it wants to go. Is bigger better for your business? Are you getting the results you wanted when you first started your company? Are you doing more and at a higher level without allowing time to improve, plan or alter your course towards higher margins? Or are you working too hard to make enough money for all the effort, energy, sweat, and additional pressures required?

Before the economic growth began, your company was designed to handle and deliver the results you were currently getting. Your goals were to get more organized, install systems, upgrade your job cost tracking systems, or take more time to pursue better customers. But as your business grew at a faster pace than it could handle proficiently, you likely got bogged down, postponed your improvement plans, and encountered challenges. Some common growth problems include: profit margin shrinkage, missing bid items, not enough trained supervision or manpower, lack of financial resources and cash-flow issues, or low mark-up not high enough to pay for additional overhead or lack of productivity to produce more work.

Your Business Goal is Not to Be Busy.

Your goal is to build a business that works and delivers what the owners want! This includes a high return on investment of time, energy, people, and money. When you’re working too hard and accepting too many responsibilities yourself, don’t know your numbers until it’s too late, don’t have an accountable management team, and not making enough money, you get frustrated. Why? You can’t afford to hire or train the right people, or don’t have time to focus on higher margin customers or project types. In other words, being too busy forces you to keep doing what you’ve always done while hoping for better results. Dan’s Story

Dan started Connell Commercial Builders seven continued on page 66

years ago. It grew quickly to $2 million in sales with 15 employees. Then the economy started to take off and he grew to $5 million in annual revenue. This increased workload was beyond his ability to properly manage all the contracts he had signed. As a result, he worked harder, got out of control, profits began to fade, had no life, and he was stuck being too busy. When his company was smaller, it was easier for him to act as the ship’s captain, process the work flow, and meet with customers to keep them happy. But now he had to work harder and harder to keep his company above water at a higher and faster pace. Dan was frustrated and needed help. He had a few supervisors and key foremen, but he hadn’t delegated much of his responsibilities. He was still preparing the estimates, scheduling crews, awarding subcontracts, and negotiating every general contract. When he first started his company, he had time to find new customers, manage the work, and make sure everything went well. But now that wasn’t happening, and customers were demanding more hands-on supervision, lower prices, and faster schedules. Dan was stuck, too busy taking on low price work, and his old ways of running the business weren’t working at a higher level.

Building a better construction business takes a commitment to continuous improvement. Realize you’re never finished getting better or upgrading. When you get too busy, you don’t have time to improve your operations, productivity, people, customers, or margins. You only have barely enough time to keep doing what you always have done at a faster speed with lower results. And when great opportunities come along, you can’t fit them into your program and you miss out on better projects and customers. Remember Your Vision!

When your business began, you had a vision and goal of high margins, great customers, productive energized employees, organized systems, excellent service, and plenty of time to enjoy your time off. As you got busier, these dreams all got postponed and pushed aside in the pursuit of more. At this level, the owner acts as supervisor in charge of every decision, contract, customer conversation, price, purchase, delivery, and what work gets done when. He or she is fully in control of every moving part of the business. He is out on jobsites almost every day, and performs a lot of the work himself with the help of a few other continued on page 67

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Too Busy continued from page 66 employees. He is the boss and calls all the shots. He is the business. Without him, there is no business and no company. And worst of all, there is no time to upgrade or improve any part of the company.

As the small business owner does excellent work, he or she gets more referrals, customers and jobs. With more referrals, your company continues to grow. This requires renting a small shop or office. Next, you hire a field foreman, more field workers and a part-time office assistant to help with paperwork and pay the bills. At this point, the owner is still the estimator, salesman, project manager, and general field superintendent with everyone reporting to him. As the hands-on supervisor and manager, he makes every decision, signs checks, and still oversees each transaction, customer, contact, purchase, proposal, invoice, subcontractor, and employee.

More Work is Not the Answer!

More work keeps coming. So next he hires a junior project manager or estimator, and a full-time administrator to handle more of his workload. Now as a micromanaging boss, he gets frustrated with employees not doing things the way he wants. He starts to get more and more stressed-out having to keep too many balls in the air, managing lots of people, and getting all the work done. He feels over-worked and out of control without systems, structure, standards, accountable employees, or a handle on job costs. Cash-flow is tight, he spends lots of time chasing money, and he’s not getting a very big paycheck for all the effort and time he works. The pressure of owning and running a too busy business is getting to him. He’s not achieving his vision and doesn’t see how he can ever get his business to work.

Most small business owners stay stuck at this level - too busy keeping their speeding boat headed in the right direction while continuing to do the same things without taking time for improvement. When companies grow beyond the level where the business owner can control everything himself or make all the important decisions anymore, it gets stuck. At this point, the owner is unable to manage, supervise, and take care of everything efficiently. He or she knows they need to do something different, let go, hire better people, delegate, install systems, find better customers, improve service, get a better handle on costs, or find more hours in the day.

Higher Margins are Your Goal!

A business that continues to grow without higher margins, can’t meet the goals, needs and wants of a driven entrepreneur. When you get frustrated continued on page 68

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with too much work and nothing to show for it, you begin to hate going to work because of all the demands, stress, and pressure to get everything done for your customers, employees, bankers, bonding company, subcontractors, and suppliers. So, what should a business owner do who’s stuck? Remember your dream of growing a highly profitable business? You know you need to install systems, structure, scorecards, and a management team. But you don’t have any time with all the work you have to complete!

To take control of your boat and build a better business, you must stop being too busy and focus your energy on owning a high margin company instead of supervising, directing, controlling, or doing the work. You must draft a written business blueprint or plan, replace yourself with operational systems, get your company organized so it will operate without your constant supervision, install structure and a management team who can run your company, and implement scorecards to track your progress towards achieving the results you want. And you must stop going after low margin work by using a written business development, sales and marketing plan.

When you get stuck, you hate going to work because you have more demands and pressures than you can handle. So, what should you do to get unstuck and grow your business with higher margins? 1. Re-focus on what you want! Stop and remember your original dream of owning a growing and profitable company that achieves your vision and goals, is organized, makes lots of money, has loyal customers, is run by your empowered management team, and gives you freedom and time to enjoy your life. 2. Realize you are a BIZ-Builder! You will never reach your goals if you don’t grow. Are you too busy working to make any money? To grow, you’ve got to let go, delegate, and do what you do best. Growth starts with customers who want what you sell. And you are the best salesperson in your company. You must make time to go out and build relationships with loyal customers plus find new ones. 3. Replace yourself with BIZ-Systems! In order to delegate to your team, you need written systems and procedures in place that don’t rely on you dictating and directing every move and decontinued on page 69

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cision on every transaction. Put your standards on paper and train your people to follow them.

This is how you get beyond YOU as the business.

Systems allow you to get out of doing and supervising work, and create time to make building your business the top priority. 4. Hire the best! Now that you know where you are going and have systems in place, you can start to build a strong management team prepared to take your company to the next level. Good people without written systems can’t do a great job without your constant input. 5. Enjoy the ride! With your company organized and growing, you can now focus on creating more opportunities for your business to prosper and grow.

Remember, Busy is Not Better!

In order to get Dan’s company back on track building a better business, he made a decision to change how he managed his business and seek better customers and projects. He started delegating more responsibility to key managers and supervisors. As they stopped relying on him to make their decisions, they started seeing the company’s potential and got excited about their new roles and accountabilities. To increase and improve their net profit, the team invested time to standardize operational systems and start a training program. With the improvement program moving forward, Dan gained more time to meet with existing and new customers to develop relationships and win higher margin work. Connell Commercial Builders’ profits began to rise, equity and net worth grew, and Dan was able to spend more time with his family. He had righted his ship, installed a new rudder, stopped doing what he had always done, and taken the time required to get his ship headed down the right river. n

George Hedley CPBC is a certified professional construction BIZCOACH and popular speaker. He helps contractors build better businesses, grow, increase profits, develop management teams, improve field production, and get their companies to work. He is the best-selling author of “Get Your Construction Business To Always Make A Profit!” available on Amazon.com. To get his free e-newsletter, start a personalized BIZCOACH program, attend a BIZ-BUILDER Boot Camp, or get a discount at www. HardhatBIZSCHOOL.com online university for contractors, Visit www.HardhatPresentations.com or E-mail GH@HardhatPresentations.com.

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