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Contractors Shares How To Use Educational Seminars As A Marketing Tool

Posted by Shawn McCadden on Tue, Apr 15,2014 @ 06:00 AM

Brian Altmann

 

Guest Blogger: Brian Altmann, CAPS is the president of DBS Remodel, Inc.a full service residential remodeling company in LaGrange, NY. He frequently speaks at the Remodeling Show and JLC Live. Brian has over 28 years of experience in the remodeling industry. At JLC LIVE in Providence RI this spring Brain shared his experiences with me about doing consumer seminars as a marketing tactic.   He agreed to contribute this guest blog to help other contractors do the same.  He can be reached at Brian@DBSremodel.com

 

How To Be Successful Using Educational Seminars As A Marketing Tool

Offering remodeling seminars for consumersIn my 28 years in the remodeling business I have seen many relationships go south between homeowner and contractor! All too often the homeowner is in a position where they don’t even know what they just purchased from their remodeler. Whose fault is this? The remodeler was not paid as a consultant so possibly inadequate time was spent creating a job scope and contract. And of course, the homeowner only wanted to know two things…when can you start and how much is it going to cost! The blame should be spread evenly. I have always wanted my clients to understand EXACTLY what they were purchasing and felt that educating them on the process would be win/win for everyone.

This is why I started to offer seminars to teach prospects “What They Must Know About Hiring A Remodeling Contractor”.

 

Here are some details on how I do it

I always hold these seminars at a local hotel.  The seminars are complimentary and I always provide coffee and donuts. The duration of the seminar is 2 hours. During this informal, relaxed session we will discuss The Top Ten Questions To Ask A Remodeler During An Interview, how to handle extras, a well written contract, the value of a pre-construction meeting among other topics. I usually ask attendees in the beginning what they were hoping to learn and that helps me drive the content as well. We leave plenty of time for Q&A at the end.


Marketing to remodeling consumer with seminars

Marketing these seminars presents the biggest challenge, but, not one that is insurmountable! Many homeowners fear being sold at such an event. The key here is to keep all content objective and make this about the homeowner and their needs and not an infomercial for your company. Our seminars are sponsored by 16 local companies that are either vendors or trade partners. This allows us to create objectivity in our marketing efforts as well as help to subsidize the marketing budget.

 

Benefits of doing the seminars for remodeling consumers

The biggest benefit of conducting seminars is that DBS Remodel is perceived as the local expert in our industry. It is a great platform to create trust with those in attendance. We feel that if we give as much knowledge as we can to our prospects and sincerely help them…good things will happen! 

The short video below will give you an idea of some of the content we include in our seminars



The seminars are fun and quite easy to deliver

Many companies would balk at the expense of putting seminars on and those that do will be missing a golden opportunity.  Last year 34% of our gross sales came from homeowners that attended our free educational seminars. We have 15 scheduled for this year with two of them already complete.

 

Instead of waiting for the economy to turn around we are taking matters in our own hands!

 

Topics: Differentiating your Business, Marketing Ideas, Guest Blogs, Customer Relations

One Craftsman’s Thoughts On Traditional Carpentry and Work Ethics

Posted by Shawn McCadden on Thu, Mar 27,2014 @ 06:00 AM

Mike Ushka

 

Guest Blogger: Starting his working career in the mid 1970’s, Mike Ushka is lifelong craftsman.   Mike has spent the better part of nearly 40 years dedicated to traditional American carpentry and building.

Today Mike spends most of his time facilitating residential remodeling in Fairfield County Connecticut.

In this guest blog Mike shares his history and his thoughts regarding craftsmanship and work ethics.

 

One Craftsman’s Thoughts On Traditional Carpentry and Work Ethics

Having come from descendants of the 18th and 19th century, I was given the privilege of a mechanical upbringing that was rich in history.  Not to be confused with what we know today as "The Yankee Craftsman" who has every tool and vehicle that NASA can muster at his fingertips to get a table built.  I am referring to classically trained carpenters who are well seasoned, with an appreciation and respect for their craft.   Carpenters with an understanding of why things are done the way they are, and how they used to be done before battery powered yellow tools took over.

Old Time Craftsman being lostMy Great Uncle's brother was a custom wood worker and built everything from tiny jewelry and cigarette boxes with minute inlay and detail, to a full spectrum of furniture and woodworking.  He built his shop in the cavernous basement of an ancient brownstone five blocks from the harbor in Philadelphia. In this shop he had every true carpenter's tool of the day including an entirely leather belt driven coping lathe that he built himself.  Every tool had a place and there was a place for every tool, all sharp, oiled and at the ready. From my uncle I learned the necessary task of stone sharpening; honing the edges of every tool, from chisels and planes.  I also learned how to sharpen each tooth of a circular blade and the art of "setting" the teeth of each handsaw in the shop, positioned teeth down and stacked front to back in the handmade wooden tool boxes that cuddled every tool.

I started my first paying job when I was nine years old in the early 70's.  I was clearing lots to build homes by the time I was thirteen, having become fluid with the chainsaw and sharpening the chains by eye without a jig.  By fifteen I was framing houses after school and on weekends, nailing off plywood and sheathing by hand, sharpening the "non-carbide" circular saw blades, hatchets and chisels by hand every night at home before returning to work the next day.


At that time the jobs at hand were conducted as poetry in motion.

There was no wasting of time as there were only so few minutes in the day.  Each minute was precious as this was our livelihood.  Once on site to frame or trim a building the job was set up in minutes. Pouches on, saws and hammers in motion, there was no time wasted. If you had to move it was for a purpose and you never left your work area or task unless every possible thing that could be done was complete; and then some. By the time I was seventeen and out of trade school I was into full blown house construction.  My skills as a fine wood worker had peaked and the jobs ran seamlessly.

Traditional CarpentryEventually the first miter boxes, buck saws and smaller radial arm saws arrived and we started to move away from the hand tools like the Yankee screw driver, the brace and bit and the miter knife. We started to use nail guns, carbide blades and a plethora of modernized tools to save time and money; not knowing that we would forever kill the "Traditional Carpenter".  I witnessed men become unwilling to use a hand tool.  They were unwilling to know, understand or simply feel the joy of building something you hoped would be there forever, built with your own two hands. Those days are gone.


We now live in the care free age of “get to work late” and chat over “five buck coffees’

If the nails won't set, the gun must be broken (send it out to fix it.)  “I can't do it yet the screw gun is still charging...If the miter is close just caulk it...I can't work the power is out...I need a table saw to rip that stud...Who has the hammer?...The header must be level...The floor must be level...I can only work eight hours, you can't make me work more than 8 hours...where's the laddervator?  Step flashing?  It's not my job to clean up after myself”--AND SO ON !?!?!

 

Best of both worlds

Building without power tools

As an experiment a few years back I decided to take a modernized crew and show them the light. The only power tools I allowed to frame a house were circular saws (without the $800.00 green attachments) and a sawzall (even I won't bitch about this as I hacked off a billion rafter tails with a hatchet as a kid.) The rest were hand tools. We not only finished the job in a fraction of the time with a much higher quality level, all the men had an earnest appreciation for not only what they had accomplished, but for themselves as well. They all went on to be better craftsmen, still working with the ethic that I had instilled in them that cold winter we built that house by hand.

 

Today I am a building and remodeling contractor enjoying the mature end of a proud career as I manage and consult in all levels of construction in New England.

 

Thank you for the opportunity to share this story and my opinions,

Mike Ushka Sr.


Topics: Worker Training, Guest Blogs, Opinions from Contractors

Choosing the Right Tools and Technology for Your Construction Company

Posted by Shawn McCadden on Sun, Mar 23,2014 @ 06:00 AM

Fleet Cars, Company Mobile Phones & PCs: Choosing the Right Tools for Your Construction Company

Phones for contractors

 

 

 

As a business owner, it's important to have your company and employees set up with the proper machinery and technology needed for success.

Here are a few things to consider as you seek out the right tools for your business.

 

 

Selecting Fleet Vehicles

When choosing a company truck, you have to make tough decisions about which employees will be driving the vehicles and how they will be used. Consider these three things: the primary cost of the vehicle, the secondary cost, and what kind of image you want to project.

work truck for contractorsPrimary costs include the monthly car payment or leasing fee. Secondary costs include insurance, fuel, and maintenance costs. By leasing a vehicle, you can typically avoid maintenance costs, but you may face mileage overage charges or other fees. Crunch the numbers before buying or leasing to ensure that you're getting the best deal possible.

Think about the message your vehicle will send to potential customers. If your company is environmentally-conscious, consider a hybrid vehicle to stress those values. Consider the time you and your employees will be spending on the road, and consider vehicles that have your company name, logo, and contact information. Keep your vehicles clean and properly maintained to project an organized, professional company.

 

Selecting the Right Phones

If your employees are expected to check email and take calls regularly, equip them with smartphones like the iPhone 5s, which will allow them access to apps that could make them more efficient. Look for unlimited data as well so your team can receive documents, edit them, and perform other critical tasks on the go. Stress your company guidelines for phone usage and expectations, and enforce those rules.

Consider these apps for construction companies:

  • The Aconex Mobile app lets users capture photos, videos and audio on site. It also allows access to project documents, with view and edit features.
  • The iBlueprint app allows users to create and export custom floor plans. It’s handy for contractors and real estate agents who want to access blueprints on job sites.
  • Procore puts construction management at your fingertips, allowing users to create and manage punch-list items, access contacts, share and store project photos and log timecard entries.

 

Selecting Laptops or Tablets

Laptop for contractorsWhen choosing laptops for your team, consider both cost and functionality. If your team can exist exclusively in the cloud, desktop software may be redundant. Speak with your team about what tools and software they need to complete their jobs effectively. They'll be able to provide the best insight and recommendations, and will be aware of new programs and software that might make the company more efficient and productive.

Consider tablets for employees on-the-go, and have them pre-loaded with client-facing software that will project a professional image. The lightweight Windows 8 Lenovo IdeaPad Z500 Touch is a good option to consider for maximum storage. It's a good idea to invest in protective covers that will help extend the life of your tablet.

 

Guest Blogger: Marnie Smith is a freelance writer for a few San Diego publications, though she is based on the Los Angeles area.

Topics: Technology for Remodelers, Differentiating your Business, Guest Blogs

Know Who You Are, Then Build a Contracting Business That Works For You

Posted by Shawn McCadden on Sun, Feb 16,2014 @ 01:10 PM

Peter Schneider

 

 

Guest Blogger: Peter Schneider, Peter Schneider Builder Contracor, Inc. has 20+ years experience and knowledge of residential custom building managing each project hands-on. He's been featured in national trade magazines and local publications and he's served on the Board of Directors of the Fairfield County Home Builders Association.  Peter offered this guest blog topic after reading my blog article titled: "Are You Less Of A Contractor If You Sub Everything Out?" I think Peter's message is a valuable one for contractors to consider.

 

Contractors; Know Who You Are, Then Build a Contracting Business That Works For You

Subs vs employeesUpon a little reflection I’ve realized there are a lot of ways to organize a contracting business, none of which are the “gold standard” and all of which either purposely or inadvertently express the personality of the owner.  At your inner core are you a manager or a craftsman? Are you a little of both? Are you neither?  Generally, I’ve noticed successful people have figured out who they are and how they add value to the equation.  Then they’ve set up a business system to capitalize on their strengths.  

If you are good with your hands, and want to be left alone to do your work, you probably will be a good one-man show type of contractor who can keep busy working for a few General Contractors. I work with carpenters, tile guys and drywall tapers that operate like this – most of whom survived the 7 year long down-turn OK.

If you can teach others a trade like framing, painting, drywall, etc, you can assemble a crew that will make you a nice profit, but you will need someone to run the “business” end of things, at your direction, leaving you free to estimate and sell and manage production. Profitably managing direct employees is a job unto itself and in my opinion is only appropriate when you have a crew that specializes in one type of work.

Peter Schneider Builder Contractor CrewIf you are excited about putting a team of specialized professional craftsmen together to construct a series of varied job types where organization & management are key elements of production & profitability, you’re a good fit for a general contractor operation. A GC set up is generally best for larger jobs like a custom home, a larger addition, or a whole house remodel job. Sometimes smaller jobs that require a higher level of craftsmanship like a special faux finish on walls, or custom built in cabinetry, or precision stone work are best left to the specialist sub contractor.  Higher end bath remodels are also a good fit for a GC with a loyal team of trade contractors. You absolutely must develop a team that you work with regularly so you can be assured of consistent quality and integration between trades.

For me, I’ve noticed the comparatively greater value of leveraging my time providing work opportunities for, and coordinating the activity of other professionals. 

There are inescapable sales, marketing and overhead costs of running a business not directly associated with performing your revenue producing activity. A good GC-Sub relationship takes this into account, or at least I like to think it does in my case.

 

 

Topics: Guest Blogs, Building Relationships, Subcontractor Considerations, Opinions from Contractors, Business Planning, Sage Advice, Business Considerations

Including General Production Costs in Your Estimates

Posted by Shawn McCadden on Thu, Jan 30,2014 @ 06:00 AM

Melanie Hodgdon, Business Systems Management

 

 

Guest Blogger: Melanie Hodgdon is a Certified QuickBooks ProAdvisor who has been providing financial analysis and QuickBooks training for contractors since 1994. She’s the co-author of A Simple Guide to Turning a Profit as a Contractor.  Melanie and Shawn often coordinate their efforts when helping remodelers develop financial systems for their businesses so they serve the contractor, not just their accountant.

 

Understanding and Including General Production Costs in Your Estimates

Estimators are pretty good about including costs for permits, materials, subs, and equipment rental in their estimates. And the really topnotch ones are also adept at estimating the amount of labor time based on knowledge of what their crew(s) can produce. But there is another element that often eludes even the most careful of estimators: the cost of those “necessaries” that will be used on a job but not easily assigned to specific jobs.

 

These include things like:

  • Miscellaneous Construction SuppliesBits
  • Blades
  • Rags and other cleaning supplies
  • Sanding disks and sand paper
  • Trash bags
  • Small tools
  • Dust masks
  • Assorted fasteners
  • Caulking and adhesives
  • Pencils, markers and chalk


Here are some more candidates:

  • General Production SuppliesCost to repair and maintain tools and equipment
  • Cost to maintain a jobsite trailer
  • Propane for the space heater
  • HEPA filters
  • Bungies, ropes and tie downs
  • Trash barrels or bins

 

These can be considered General Production Costs and you should have a method to allow for them in the job price.

 

Two ways to price your work

Basically, pricing consists of identifying the actual cost of X and then adding a markup. The purpose of the markup is to allow the selling price to cover not just what X costs, but also it’s fair share of the company overhead, with enough left over to contribute to company profit.

 

Option A: Include in the estimate

General Production Costs Option A

 

 

 

When you include an allowance for General Production Costs in your estimate, you increase the predicted cost of the job. When you apply a markup to the cost, you will also be marking up the predicted General Production Costs. Because you are charging your customer for the cost (income account), the matching cost should be considered Cost of Goods Sold.

For many contractors, including an allowance for these costs in the estimate will increase the likelihood that the costs will be covered.

 


Option B: Include in the markup

General Production Costs Option B

 

 

 

If you consider General Production Costs as being part of the cost of doing business (overhead), then you will account for them by increasing your markup on the job.

Ideally, both methods will result in the same selling price. However, in my experience, far too many contractors decide on a markup based not on the financial requirements of their company, but rather on a figure they found in an article, or what scuttlebutt tells them their competition is using. This WAG (wild ass guess) approach decreases the likelihood of capturing these costs in the markup.

 

Why I typically recommend Option A

Also, as companies have diversified with changes in the economy, the type of work they do has also changed in many cases. Burying these costs in overhead can make the changes less obvious than placing them in Cost of Goods Sold where significant changes are more likely to be spotted. For example, companies performing lots of RRP work might see a significant increase in these costs due to the requirement for filters, respirators, contractor bags, signage, duct tape, Tyvek suits, etc. The effect on the gross margin (when these costs reside in Cost of Goods Sold) might be noticed more quickly and reliably than remembering to deliberately dig into the overhead accounts to find and monitor them.

 

Estimating vs. job costing considerations

Estimating and Job Costing

Once your General Production Costs are part of Cost of Goods Sold, an allowance for the inevitable cost can be included in the estimate. This means that you will charge for them as part of your pricing strategy. However, because of their very nature, you won’t be able to attribute them to individual jobs, so when you look at job cost reports, you will not see an “actual cost” for these items, making the jobs appear slightly more profitable than they probably are. The achieved margins of all the jobs will look higher than the overall achieved margin from the Profit and Loss Statement since the Profit and Loss Statement will contain the dollars spent on General Production Costs and the individual job reports won’t.

 

How to calculate General Production Costs for estimating purposes

The simplest way is by comparing General Production Costs with Materials costs. Express the relationship as a ratio or percentage. For example, if in the last twelve months you spent $500,000 on materials and $8,000 on General Production Costs, you will need to add 1.6% ($8,000 ÷ $500,000) to your estimate to cover them. When estimating, this figure can be added as a line item as shown in the sample estimate template below.

 

Excel Estimating Template

 Screen shot from Shawn's new estimating Template

 

Final thoughts

Each job has enough surprises in it. Why not at least plan your sell price to include an allowance for the costs you know you can count on?

 

 Contractor coaching

Need help with General Production Costs?

Call or  Email Shawn today. 

 

Do it now so you can be confident you are pricing your spring and summer projects correctly!

 

 

Topics: Business Financials, Financial Related Topics, Guest Blogs, Estimating Considerations, Keeping More Money

3D is the Way to Be: The Future Of Construction Projects

Posted by Shawn McCadden on Thu, Jan 23,2014 @ 06:00 AM

3D is the Way to Be: The Future Of Construction Projects

Steven Clark

 

 

Guest Blogger: Steven Clark is a graphic designer who transitioned to being a work-from-home dad last year, after his triplet boys were born.

 


3D modeling

Although we can use computer modeling, high-tension bindings, and cranes hundreds of stories high to build super-skyscrapers, construction technology has advanced less far than some might think. After all, the concrete we use today is a result of an invention dating back to the Roman Empire, one that the University of California claims lacked the strength of today's concrete only because our ancestors did not have reinforced steel. As we look forward to the future of construction, much will remain the same -- plans will have to be drawn, foundations laid, and so on -- but many new inventions will change how much time, effort, and resources go into a project.

 

 

Beyond 3D

Uses for BIMAs the movie industry races to develop three-dimensional blockbusters, the construction world has left the third dimension in the dust. The newest trend is one step further: four-dimensional planning, which allows a person to not only see the entire view of a building, but see it from every possible angle. This gives contractors the opportunity to see possibilities they didn't before, plan better for construction, rent any kind of special equipment they might need and plan for supplies and safety. The American Society of Mechanical Engineers reports a new type of paradigm known as BIM, or building information modeling. This paradigm is being used in computer development of construction, and engineer Richard Beattie claims it can boost the approval rate of designs up to 90% percent BIM allows the architect, engineers, and clients to view a building's depth in addition to its height and length.

 

Building A Better Brick

3D printers for construction

 

Bricks as we know them represent one of the oldest human inventions in history, with civilizations dating back over five thousand years having used dried mud and mortar to create buildings. Yet the basic stature of a brick has changed little since then -- until now. Architizer reports that ceramic bricks made by 3D printers may soon replace their traditional red counterparts, since these bricks can be created quickly on the spot with fewer materials, weighing less, and having greater strength. A honeycomb design makes these bricks better able to withstand everything from the weight of its neighbors to a gale-force hurricane. Bricks still need to be attached to everything from window sills to floors, however, and the rubber sealing mechanisms offer a new hope as well. Thermal-bonding rubber seals minimize heat loss when utilized as a bonding agent between composite or traditional bricks. This rubber bonds to ceramic as well as plastic, glass, and wood.

 

Topics: Future of the Remodeling Industry, Design Trends, Guest Blogs

Who's Paying For Your Carpenter's Non Productive Time?

Posted by Shawn McCadden on Thu, Jan 16,2014 @ 06:00 AM

Melanie Hodgdon, Business Systems Management

 

 

Guest Blogger: Melanie Hodgdon is a Certified QuickBooks ProAdvisor who has been providing financial analysis and QuickBooks training for contractors since 1994. She’s the author of A Simple Guide to Turning a Profit as a Contractor Melanie and Shawn often coordinate their efforts when helping remodelers develop financial systems for their businesses so they serve the contractor, not just their accountant.

 

Who's Paying For Your Carpenter's Non Productive Time?

Non Productive Time for CarpentersI was discussing the cost of labor the other day with a client, and he told me he really had a handle on what his costs were. “No kidding? That’s great,” I said. I then quizzed him on what factors he’d included, and was impressed that he’d gotten so many: wages; company-paid payroll taxes; Worker’s Comp; liability insurance; vehicles, cell phones, and small tools used by production workers; health insurance; retirement. “And what about non-productive time?” I asked. Puzzled, he asked me what I meant.

The fact is that while it’s relatively simple to calculate what it costs to pay a production worker for an hour of time, you have to remember that he’s not going to be available to perform the work that you estimated for 100% of that time.

 

Hours for carpenterLet’s do the math.

Assuming no overtime, a worker is typically paid for 8 hours/day, 5 days/week, 52 weeks/year. This adds up to 2,080 hours. So you’re paying him for 2,080 hours a year.

But for how many hours will he actually be available to you to perform the work you’ve included in your estimate for labor?  Subtracting for some common events, we see the number of hours available for producing the estimated work starts to evaporate.

Productive hours for a carpenter

Nonproductive time for carpenter

 

 

What else cuts into that productive time? How about those weekly production meetings? OSHA safety meetings? Meetings about the new health insurance or retirement options? What about training and education? How about the requirement that they clean out the vans every Friday afternoon? Do they help clean up the shop? Maintain tools? Are they paid for commuting time?

 

How might this affect estimating the cost of labor for a job?

Let’s say that you pay Will $20/hr. After adding all the burdens to that hourly rate, you discover that his total annual cost is $63,500.

You can look at this annual total in two ways: how much does Will cost you per paid hour, and how much does Will cost you per productive hour: the hours that he’s actually available to perform those labor tasks you included in the estimate when calculating the job’s sale price?

Labo burden for a carpenter

 

From the chart, you can see it costs over $5/hour more for Will’s time when you base the cost on his productive time.

 

So what does this mean in terms of pricing jobs?

Using the wrong labor cost can be devastating, particularly in jobs where there is a high proportion of labor.

Let’s see how it would play out in jobs with varying amount of labor.

For a 100 hour job, based on the burdened cost per paid hour, the estimated cost would be $3,053.

Those same 100 hours, based on the burdened cost per productive hour, costs $3,553. So the cost difference between using the paid vs. productive hr cost figure would be $500. For a 1,000 hour job, the cost difference would be $5,000.

The cost of non productive time

 

Now let’s look at the selling price of the job, assuming a 50% markup.

For a 100 hour job, the difference in selling price would be $750.

For a 1,000 hour job, you’d be underpricing by $7,500!

Pricing a remodeling project

 

Pay rates for carpenters

 

So next time you estimate work, be sure you’re working from realistic costs. Labor is tricky to estimate anyway; getting a handle on what it really costs for that hour of nail banging will bring you closer to costing and pricing your jobs accurately.

 

 

 

Need help with figuring out your labor costs?

Call or Email Shawn today. 

 

Do it now so you can be confident you are pricing your spring and summer projects correctly!

 

 

Topics: Business Financials, Labor Costs, Financial Related Topics, Earning More Money, Guest Blogs, Estimating Considerations

Why Contractors Should Get A Line Of Credit When They Don’t Need One

Posted by Shawn McCadden on Thu, Jan 09,2014 @ 08:27 AM

Why Contractors Should Get A Line Of Credit When They Don’t Need One

Melanie Hodgdon, Business Systems Management

 

 

Guest Blogger: Melanie Hodgdon is a Certified QuickBooks ProAdvisor who has been providing financial analysis and QuickBooks training for contractors since 1994. She’s the co-author of A Simple Guide to Turning a Profit as a Contractor.  Melanie and Shawn often coordinate their efforts when helping remodelers develop financial systems for their businesses so they serve the contractor, not just their accountant.


Contractor cash flow


A line of credit can be your cash flow insurance

I recently had a conversation with a client who, after an incredibly profitable startup a couple of years ago, encountered a perfect storm of difficulties and recently found himself facing a severe cash flow crunch. This is one of those things that happens in any industry, and seems particularly prevalent among construction and remodeling companies


The problem is sort of like health insurance.

Contractor Line of CreditWhen you’re young and in perfect health, it seems stupid to waste money on insurance. There are so many more important (and fun) things to buy: trucks, tools, additional personnel; the list is endless. I remember when I fell off my roof, my life didn’t flash before my eyes, but I did have a very clear sequence of thoughts.

  1. I hope the cat isn’t lying where I’m going to land (he wasn’t)
  2. This is SO going to hurt (it did)
  3. I really, really wish I had insurance (I didn’t)

 

Back to the cash flow issue.

The point is that when everything is going great and you have oodles of cash, it seems stupid to waste time setting up a line of credit. However, that’s exactly when you should apply: when you don’t need it.

Once you need a line of credit (or, more accurately, once you admit to yourself that you need it), the chances are pretty good that your Balance Sheet will look pretty bad, and it’s your Balance Sheet that creditors want to look at.


Working with your lender

Getting a line of credit as a contractor

 

Your bank is actually less interested in your income or even your profit figures; what matters is the extent to which you’re able to pay off debt, and the degree to which your company is running on credit. We’ll look at the critical numbers in a follow-up blog. In the meantime, one of the things that saved my client from being turned down by the bank was that he had an excellent relationship with the bank staff, who went to bat for him. While things were going well, he’d made a point of sharing his successes with key personnel. They knew he was a hard worker with a solid business plan and a track record of success, and this personal knowledge allowed them to see past the current bad-looking financials.


 

Here is a summary of steps to help contractors secure a line of credit

  1. Contractor balance sheetLearn more about your Balance Sheet, the often under-utilized and misunderstood financial report that can spell success or failure
  2. Make a point of getting to know your bank personnel, particularly your loan officers; this can up your chances of approval by lifting you from anonymity
  3. Apply and get approval for a line of credit when your books look good, when you have plenty of cash, you’ve paid down debt, and you don’t need credit

 

 

 

Topics: Business Financials, Success Strategies, Financial Related Topics, Cash Flow, Guest Blogs

Close More Free Estimates: Be There for the "Which Builder" Decision

Posted by Shawn McCadden on Fri, Dec 27,2013 @ 06:00 AM

Graeme Owen

 

 

Guest Blogger: Graeme Owen, based in Auckland NZ, is the builders' business coach.  Since 2006, he has helped builders get off the tools, make decent money, and free up time for family time, going fishing, and enjoying sports.  Get his free ebook: 3 Reasons Builders Lose Money and How to Fix Them for High Profits at TheSuccessfulBuilder.com

 

To Close More Free Estimates Be There for the "Which Builder?" Decision!

Close free estimates

 

Are you wasting time preparing building estimates for jobs you don’t get? Frustrating!  And costly!  Maybe you are like so many builders making one of the most common estimating mistakes: Not being with the client when they are deciding which estimate to accept!

There is no doubt that the builder who is with the client when they are deciding on which estimate to accept is highly likely to get the job.  Wouldn’t it be great if you could be that builder? The thing is...you can.

 

Here are three keys to being present when the client is deciding "which builder" to hire,

1. Discuss Other Estimates

In your first meeting with your client make sure that you discuss with them how many other estimates they are planning to get. Even though they may like you and tell you you are the only one, it is highly likely that they will consult another builder - if only to check that you are not “ripping them off.”  Also, if they are borrowing money for the build, they may be required to get multiple estimates.

2. Set the Estimate Close-off Date

Having broached the subject, discuss the close-off date for accepting estimates.   Make sure that you give yourself enough time to get your estimate together and enough time for your client to talk to other builders.

3.Remodeling sales meeting Position Being There

Finally, in your first meeting ask permission to be with them when they are making their final decision. Set the date and time for that meeting on your first visit.


Here is an example

You say, “Will you be getting other estimates?”

They say, "Yes."

Accept this graciously with something like. “That’s great.” Then say,

“When do you think is a good date for us to have all the estimates together?”

“What we request is that when you have all the other estimates together we meet and go over them with you. This way you can be certain that you are comparing apples with apples. Now I know that you are probably quite capable of doing this yourself, but we have had cases where people have accepted estimates they have later regretted. They did not fully appreciate exactly what was covered and ended up paying more than they had expected. So it’s our company’s policy to do this. Is that OK?”

“When would be a good time for us to meet?”

 

No More Free Estimates

 

Summary

Follow this simple procedure and you will increase the number of times that you are able to be with your client at the strategic time when they are making their decision on which builder to use.   Some will not agree.  But if you don’t ask, none will agree!


 

Post and share your comments below.

Would you try the scenario described above?

So, how many of the last 5 estimates did you close?

What have you found to be the best key to turning estimates into sales?


Topics: Sales Considerations, Differentiating your Business, Guest Blogs, Estimating Considerations, Customer Relations

All I want for Christmas… Is a Real Production Manager!

Posted by Shawn McCadden on Thu, Dec 19,2013 @ 06:00 AM

Steve St Onge

 

Guest Blogger:  Steve St. Onge founded RI Kitchen & Bath, an award-winning design/build residential and light commercial remodeling company located in Warwick RI specializing in kitchens, baths, and multi-trade interior renovation projects.  Steve contacted me about help finding a production manager, so I convinced him to do this guest blog as a way to find a good candidate.  Steve can be reached via email at Steve@rikb.com

 

 

All I want for Christmas… Is a Real Production Manager!

Dear Santa Series

 

OK, so why is it so hard to find a complete package???

I want an employee who has:

  • A complete understanding of residential construction including knowledge about the challenges of older homes – say built before 1940, and also a working knowledge of current building code. 
  • A person with field installation experience so they understand just how long a task should take and what a quality fit and finish really looks like.
  • A people person – someone who can assemble and motivate a team of skilled professionals to complete projects on time, as well as maintaining a professional, respectful and solid working relationship with the architects and sales and design team that brought the project to us in the first place, with the ability to overcome challenges of missing information or changes, along with that all important trait of empathy for the client’s experience.
  • Production Manager wantedA communicator -someone who can exchange ideas, and be open to other’s solutions in addition to being able to clearly articulate their ideas through verbal and written channels in a timely and responsive manner.
  • A problem averter, not just a problem solver, because once there is a problem, it is too late.  This has to be someone that has vision and can plan and then implement that plan.
  • A detail person, someone who is organized, doesn’t lose the details and can create spreadsheets and collate data to analyze the stats and make adjustments to stay on schedule or increase efficiencies.
  • A tech savvy person, who understands how to leverage technology and use it in new and creative ways to manage multiple projects and tasks at the same time.
  • A student- someone who wants to continue to learn, and grow and accept new challenges.
  • A teacher- someone who is willing and able to share their knowledge to help others.
  • A happy person with good manners and a pleasant demeanor - someone you would invite to dinner.

Is this too much to ask?   I’ve been good….  Really.

 Production manager wanted

 

This is the second blog article in the "All I want for Christmas" series here at the Design/Builders Blog.

If you would like to contribute a guest blog for the Design/Builders Blog email Shawn with your suggest topic.

 

Topics: Fun Stuff, Hiring and Firing, Recruting, Production Considerations, Guest Blogs