More Work Coming In Than You Can Produce? – Here’s Some Guidance and Advice
The Joint Center for Housing Studies at Harvard University indicates that the dollars spent on remodeling will increase by 8.6% by the end of 2016. Most remodelers are already feeling this surge in spending as their backlog of work keeps increasing and at the same time the number of estimates they need to push out is also increasing. Smart business owners seeing this happening are already increasing their field staff capacity to take advantage of the work. Adding staff can help get more work done. However if production efficiency and organization are challenged due to the growth profits can quickly drop. To help these contractors out I have searched out and assembled the list of articles below. Each article is helpful, but collectively they can help identify a plan of action contractors can take to protect the profits they expect to earn by growing their businesses.
A good number of contractors have been contacting me for help in this area. Most share now that they have more staff they are challenged to properly manage them and the sequence of work. Others report they have come to realize they may have hired the wrong staff. The solutions to these problems are actually not that difficult to put in place. What typically gets in the way is not knowing what systems to put in place to support the growth and how to get things started.
Here is one message I got just today, from an employee:
“Hello. I was hired 3 years ago as an estimator. We had 2 carpenters and a super. We now have grown into 7 carpenters, super, production manager and additional secretary. None of our carpenters are "lead carpenters" but about 4 think they are. We are experiencing some growing pains for sure so any input would help. Thanks.”
So, here is my list of helpful articles for contractors seeking to advance and grow their production capabilities. The articles will help enlighten you to what your options are as well as several important considerations to be aware of before you jump in and get things started. I hope you find the info helpful and motivating.
List of articles about growing production capacity at a Remodeling Company:
Options for Managing Production
What’s the Difference Between a Production Manager and a Production Supervisor?
All I want for Christmas… Is a Real Production Manager!
Is He Really a Lead Carpenter?
Key Differences Between Carpenters and Great Lead Carpenters: Part 1
Key Differences Between Carpenters and Great Lead Carpenters: Part 2
Checklist for Implementing the Lead Carpenter System
Considerations for Putting the Right Employee on the Right Job
Help With Evolving From Contractor to Construction Business Owner
Most contractors can't explain how they do business, they just make things happen. In a smaller remodeling business, say up to about $5-700K of installed work, this may get you by. But as you grow your business, particularly if you want to 
Be careful here. If you don't explain how you do business before winning the bid on an architect driven remodeling project you might just be told how you will do business. Examples include how and when you will be paid, what will be considered a change order vs. what you should have assumed to be included, what margin you can earn on change orders, and what hoops you will need to jump through before receiving progress payments and final payments. Be sure to carefully read any AIA Contracts before signing them.
Skilled Carpenters are assumed to have the trade skills needed to do the work at hand and to understand construction. But just because a carpenter has these skills doesn’t necessarily also mean he or she has the rest of what it takes to be a successful Lead Carpenter. Below is the first half of a list of key skills a carpenter should have or will need to acquire to become a great Lead Carpenter. I created this list to help carpenters and construction business owners improve their chances of success developing Lead Carpenters and a true Lead Carpenter System. 
Speaking: Ability to speak clearly including selecting language, tone of voice, and gestures appropriate to a specific audience.
Creative Thinking: Has the ability and is not afraid to use imagination freely to combine ideas or information in new ways. Can easily make connections between ideas that seem unrelated to others.
You can get the opinions and advice of others so you can be more confident in your numbers and using them to make sound business decisions. Getting insight from others can also help you avoid costly mistakes.
Often financial information is held back because the business owner is embarrassed that he or she doesn't understand the business finances well enough to explain them or answer questions about them. This is not good. Imagine what a great employee will think about his boss and or the business if he discovers the owner is 
Hiring a construction or remodeling industry expert certainly can be expensive. Depending on the nature of the problems to be addressed the fees can add up quickly. However, compared to the money lost over time by not correcting or improving things that slow you down or increase project costs, years perhaps, the lost revenue and compromised profitability can far exceed the initial cost to fix the problem. Perhaps you could help your boss see the cost as an investment. To do this consider using a simple analogy from your world as an example to help get your intended point across. Maybe consider using the example of having a table saw. Sure you could do your job without one, but it sure would go a lot faster and come out a lot better, and at a much lower labor cost, if he made the investment in a good one sooner than later. And by doing so the labor savings alone would quickly cover the cost of buying the table saw. 
If you hear that objection it may be the truth. But you know what they say about the definition of insanity. Depending on your relationship with your boss perhaps you could ask what he has already done or will do different to get that profitable job. The positive news is that often times the business is actually already in pretty good condition. I find many construction businesses might only need a few tweaks and or new processes to make significant improvements. If the expert helps start with low hanging fruit the initial changes can often generate the additional money needed to finance additional changes.
Most construction business owners are thoughtful and kind people. They are also typically very busy and put in a lot of hours to help keep the business going and keep the employees working. If you see things that your boss doesn't, keep these considerations in mind. Choose a good time to share your opinions and offer your suggestions. Most importantly, do it with good intention and respect. I hope you have a boss who is willing to listen and will hear your suggestions. 
The great recession changed this scenario somewhat due to layoffs and downsizing. The surplus of unemployed field workers got as high as 27% for the construction industry during the recession. Unfortunately many skilled workers left the industry for other jobs, less physical jobs and or better job security. This has set up what is expected to be a major labor shortage problem for our industry as the economy and construction pick up again. Many contractors around the country are already reporting challenges finding skilled carpenters to keep up with construction demand. As the demand goes up, so will the wages that carpenters can demand to either stay at their current jobs or that other contractors will use to lure workers away to work for them.
If you plan to hire additional carpenters as your business volume picks up now is the time to put a plan together for not only finding, but also attracting good carpenters to work for your business and then to get them to stay with your business. The compensation package you put together should not only capture their interest, but also help them see opportunities for future growth and increased compensation if they are loyal and motivated.
The automobile industry uses a flat rate manual to determine the labor costs for auto repair services. The strategy they use is not to estimate the number of hours to do a certain task, but rather the typical actual cost of the labor to perform the task. A repair shop that uses flat rates pays their employees for what they accomplish, not how long it took them to do it. A construction or remodeling business could do something similar. Such a strategy could also help the business and the employees learn where to invest training to improve performance and stimulate wage increases for those who buy into performance based opportunities.
The best way to find out what will motivate team members is to ask them. While interviewing recruits or existing employees, find out not only what motivates them to grow, but also why. Connecting the “why” to the “what” can help get you, your business and that employee to where everyone wants to be much faster for two reasons.
Include in your record keeping not only the reviewer’s comments, but employee’s feedback about how well the company helps him or her to get there. If your process includes writing down what has been agreed to at this review, both the company and the employee will know what to do between now and the next review. You will also both know what you will be discussing at the next review. This helps minimize the typical fears experienced by both the reviewer and the employee when anticipating the next review meeting and what they should talk about during the next review. 
Grow or get out of the way
To help manage the process of building employee skills, avoid mutual mystification. Clearly detail your vision and sell the goals involved to your team members. Ask for a commitment for this required growth, both personal and professional, from each team member. Ask them how they see themselves fitting into this vision. Employees can choose to grow with the company, or, to be fair, perhaps they should be told that the company will out-grow them.
If you are the business owner, create job descriptions for employees who will complement the skills you bring to the business. This helps you to concentrate on what you are best at and/or prefer to do yourself. If you plan to eventually give up certain responsibilities, keep an eye out for your replacement and include mentoring as part of that person’s career path. Mentoring helps socialize the employee into the nuances of the already established norms and values of both the job position and the company.
It’s not easy to replace employees as they leave your team or to bring on new hires that possess the necessary skills to ensure your business grows. Doing so also delays the rate at which you your construction business can grow. You need to also consider whether you feel it is really fair to existing employees if you don’t give them the opportunity to move up within the company. If you are not developing employees as the company grows, you will eventually face a revolution, rather than an evolution. If this happens, you may be forced to replace these employees with others who already have the skills the growing business needs. This approach can be very risky and expensive.
I always found that great employees are far more motivated by opportunity, responsibility, accomplishment and a sense of personal fulfillment than by the use of short-term incentives, such as cost of living wage increases, one-time bonuses, or an occasional pep rally. The right strategy, as long as it is sensitive and relative to the career path of your employees, will help keep those employees on the team. It can also steer your company in the direction of recognizing who can move up the ladder and how to train them to ensure that your business evolves. The effects of such strategies are longer lasting and often permanent for the business and its employees. Additionally, this strategy works well because existing employees are familiar with your company’s systems. They already fit into the culture and know how and why you do business the way you do. It will take longer for new employees to learn about your culture, adapt, adjust and become productive dedicated members of your team. Having employees start their career paths at the bottom of the ladder affords the business owner the advantage of limiting the expense and risks if the employees do not fit in or decide to leave the business.
