Subscribe to the Design/Builders Blog

The Design Builder's Blog

What’s the Difference Between a Production Manager and a Production Supervisor?

Posted by Shawn McCadden on Tue, Jan 12,2016 @ 05:30 AM

What’s the Difference Between a Production Manager and a Production Supervisor?

differences between a production manager and a production supervisorAs a remodeling contractor seeks to grow his or her business past a million dollars it’s important to bring someone on to help with getting the work done. Without doing so the business owner can quickly become overwhelmed wearing too many hats.   At this stage in business it’s important to decide whether you want to hire a Production Supervisor or a Production Manager. Before making the decision be clear on the difference between the two and how you should decide.

 

What is a Production Supervisor?

A Production Supervisor supervises the work to be completed as well as the employees and other workers doing the work.   The key word here is supervises.  

With a Production Supervisor on-staff employees performing the work typically have little authority to make decisions about how the work will be done, who will do what, and in what sequence the work should be performed.   All of those decisions are typically left up to the Production Supervisor.

what is a production supervisorWhen subcontractors become involved in the work they too will be supervised by the Production Supervisor. They will be required to contact the supervisor for project information, onsite decisions and to discuss solutions when challenges and or discrepancies occur at the jobsite.

If the home owner has questions, wants to make changes, and or is upset about something they too would typically be referred to the Production Supervisor.

This method of production management works well if your business relies heavily on subcontractors and or only hires carpenters with little or no project management experience. You might want to think of the production supervisor as sort of a baby sitter of both the job as well as the workforce used to complete the work. If you decide on using a production supervisor be sure to hire employees who are OK with being supervised all the time and are not interested in career advancement.

 

What is a Production Manager?

Unlike a Production Supervisor a Production Manager manages the work and the workers involved in completing projects. The key word here is manages.

With a Production Manager on-staff employees working on the job should have the skills and or be trained to independently follow written work orders. They should also have the skills to make on-the-job decisions about how the work will be done, what equipment is needed, when to order materials to maintain efficiency and what to do when common challenges and discrepancies occur. To facilitate this ability many remodeling companies hire or create real lead carpenters.

lead carpenter system for business owner workshop click here

When subcontractors become involved in the work they are typically managed by the on-site project foreman or the Lead Carpenter. Onsite decisions and discussion about challenges or discrepancies with their contracted work descriptions are commonly solved right at the job site. This can be very cost effective because the Lead Carpenter or foreman is already at the jobsite, saving hours of commuting time and other related costs for the Production Manager.

what is a Production ManagerIf the home owner has questions, wants to make changes, and or is upset about something, again those things are typically handled right at the jobsite. The Lead Carpenter can reach out to the Production Manager for things outside of his expertise or authority.

This method of production management only works well if your business hires and or trains field staff to take on project management responsibilities. You might want to think of the Production Manager as the Production Mentor.  In addition to organizing project schedules and securing the right resources so site employees can be successful, the production manager is also typically responsible to mentor the company’s field staff so he or she isn’t required to supervise at the job site. If you decide on using a Production Manager be sure to hire employees who have the cognitive ability and desire to learn project management skills.

 

Related articles:

Topics: Team Building, Business Growth, Production Considerations, Leadership, Definitions

Key Differences Between Carpenters and Great Lead Carpenters: Part 2

Posted by Shawn McCadden on Thu, Jul 09,2015 @ 06:00 AM

Key Differences Between Carpenters and Great Lead Carpenters: Part 2

Skills to be a lead carpenterAs I pointed out in part one of this article 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. In the first article I listed the basic skills and thinking skills a carpenter must possess to be eligible to become a Lead Carpenter. Below is the second half of a list of key skills a carpenter should have or will need to acquire to become a great Lead Carpenter. We will be covering these topics and others at our Lead Carpenter System Workshop for business owners coming this summer.

 

This second list describes the people skills and personal qualities a carpenter must possess before becoming a great Lead Carpenter. These are skills that can be learned and mastered while working as a carpenter. Training, supervision, mentoring and coaching by the business owner and or other leaders in the business can help the right carpenters acquire these very important skills. Before investing in a carpenter in these areas make sure your Lead Carpenter to be has the demonstrated cognitive ability and willingness to learn and apply such skills.

 

People Skills needed to be a Lead Carpenter

  • Social: Has a natural ability to show understanding, friendliness, and respect for the feelings of others, but at the same time is able to assert oneself when appropriate. Also takes genuine interest in what people say and why they think and act the way they do.
  • Negotiation: Ability to assess and identify common goals among different parties and at the same time clearly present their and the company’s position. Can also examine possible options and make reasonable compromises.Lead Carpenter skills
  • Leadership: Can appropriately communicate thoughts and feelings to justify a position. Can also encourage or convince while making positive use of rules or values. Demonstrates the ability to have others believe in and trust in them because of demonstrated competence and honesty.
  • Teamwork: Contributes to the team offering ideas and effort, but also does his or her share of the work to be done. Has the ability to encourage other team members and can resolve differences for the benefit of the team. At the same time can responsibly and appropriately challenge existing procedures, policies, or authorities for constructive purposes.
  • Cultural Diversity: Works well with people having different ethnic, social, or educational backgrounds and understands the cultural differences of different groups. Can also help the people in different groups make and embrace cultural adjustments when necessary.

 

Happy_lead_carpenter-wrPersonal qualities needed to be a Lead Carpenter

  • Self-Esteem: Understands how beliefs affect how others feel and act. Can identify irrational or harmful beliefs they may have and understand how to change and or adjust them when needed.
  • Self-Management: Honestly assesses his or her knowledge and skills accurately. Proactively sets specific and realistic personal as well as professional goals and can self monitor progress toward those goals.
  • Responsibility: Works hard to reach goals, even if the task is unpleasant. Will consistently do quality work and maintains a high standard of attendance, honesty, energy, and optimism.

 

Click here to see a Job Description for a Lead carpenter

Sign up to join our mailing list

Click here to read part one of this article

 

lead carpenter system workshop click here Other articles to help contractors and construction business owners choose and grow the right carpenters into Lead Carpenters

Helping Lead Carpenters Become Managers Benefits Them and The Business

Is He Or She Really A Lead Carpenter?  Probably Not!

Interesting Considerations For Putting The Right Employee On The Right Job

Getting Employees to Think Like Owners

 

Topics: Hiring and Firing, Worker Training, Careers in Construction, Recruting, Team Building, Production Considerations, Lead Carpenter System, Mentoring/Coaching, Culture, Leadership

Three Reasons I’ll Be Attending The Professional Remodeler Leadership Tour

Posted by Shawn McCadden on Mon, Jun 01,2015 @ 12:35 PM

Three Reasons I’ll Be Attending The Professional Remodeler Leadership Tour

Eastern MA NARI MeetingMy Local NARI Chapter, Eastern MA NARI, will be hosting Professional Remodeler Magazine’s Leadership Tour this Wednesday night in Natick MA at the VERVE Crowne Plaza Hotel.   Always a good event with great food, this year’s tour is under the new leadership of Sal Alfano, the magazine’s new Editorial Director. Below are the three reasons I’ll be going again this year. I hope you will join me Wednesday night.

 

PR-LeadershipTour-logo-wr

 

Reason #1: Great food, door prizes and networking all at a great price

Attending the event is only $15. There will be some great door prizes and the food alone will be worth the price to register. However the networking might be the biggest value. This event attracts remodeling industry leaders from the area. It’s a great opportunity to hang out and chat with other remodeling industry professionals including contractors, trade partners and vendors. By networking with other attendees you can find the information and resources your business needs to stay ahead as a leader in the marketplace. Depending on who you are, you can find other people and business to buy from or sell to.   I find it is a great way for me to spend time with my current clients and get introduced to their referrals.

 

Reason #2: Great Education

In addition to vendor displays, where you can see new products and speak with the manufacturers, the event this year will include two speakers and timely topics.  

David Mayer, Director of Marketing for Houzz will share how new tools, like Houzz, have changed the way homeowners find and choose professionals and vendors, and how you can use Houzz more effectively to market and build your business. I for one am curious on how Houzz defines a “professional” and how they keep non-professionals off their site.

Mark Richardson, well know industry speaker will present "Creating a World Class Team" Covering such topics as: People are your greatest assets; Culture eats strategy for lunch; Know when to hold 'em and when to fold 'em; Become a magnet for talent; and Great businesses begin with great leaders.

 

Reason #3: Recognizing Remodeling Industry Leaders.

Sal Alfano

 

After some food, drinks, education and networking a good friend of mine, Sal Alfano, will be recognizing the local winners of the Professional Remodeler Market Leaders Awards which identifies the top remodelers in the major markets in the nation. Winners are selected through a combination of research by Professional Remodeler staff, publicly available data, and information provided by the remodeling firms.

 

The event starts at 5:30, or come early for the Kohler Bold Experience Tour!

The main event starts at 5:30, click here to register. Come at 3:30 PM and hop onboard the brand new Kohler truck in the parking lot to see their world-class products, including toilet innovations and performance showers with Choreograph Shower Walls and accessories. While there be sure to enter their drawing to win a free Kohler Moxie Shower Head or Touchless Toilet Kit.

 

 

Topics: Remodeler Education, Contractor Training, Trade Associations, Leadership

How You React To Your Own Frustrations May Set The Example For Your Team

Posted by Shawn McCadden on Wed, Apr 15,2015 @ 06:00 AM

How You React To Your Own Frustrations May Set The Example For Your Team

Frustrated construction business ownerDealing with customers, subs and employees isn't always easy. All too often they can say and do things to us that can really strike a nerve.   How you react in the situation can really make a statement about your professionalism as well as what they might actually share with others about your reactions.

Besides the people who get your goat others may be observing your reactions as well.  The observers may include your employees, trade partners as well as your customers.  How you react to stress and frustrations will definitely leave a lasting impression on them.

Consider these examples

If you beat the snot out of a chunk of wood with a sledge hammer as a way to cope with frustration and or stress your employees will likely think it’s ok to do so as well.  What if after seeing you do it they are frustrated by a client the next day , go out to the back yard of the job site and do the same in view of the customer?  What will the customer be thinking and how might it affect the atmosphere on the job site for the rest of the project?  How might it affect future referrals?

Construction leadership stylesNow consider this example.  If you asked a prospective lead carpenter you are considering hiring how he or she deals with stress or frustration on the job and they share that beating the snot out of a wood scrap with their 28 oz Estwing works best, would you hire him or her?  I certainly wouldn't.

 

A better suggestion 

Instead why not consider the difference between your roles and your identity.

Your true identity is who you would be if all of your roles were stripped away.  It's who you really are as a person and in reality has nothing to do with what your job position is.  

By contrast, your roles are the responsibilities and activities you assume in the course of life, or while on the job, whether by choice or otherwise.  And no matter what roles you serve in life, they are not who you really are as a person.

I've learned from experience that until owners, managers, and employees can separate their identities from their roles, they may be personally affected by the comments, attitudes, and expectations of their clients and co-workers.  This doesn't have to be.  Life is stressful enough already.  Don't let job stress add to it.

For more specific information on the differences between your roles and identities check out this Remodeling magazine article I wrote several years ago.

Summary

Construction leadership roles

The next time someone really upsets you at work stop, before you react, consider you are only at work and it's your job position that is being questioned or judged, not your identity.  Your ability to keep your identity and roles separate will help you keep a cool head in otherwise stressful situations.  And, how you react and act will serve as a much better example to everyone with whom you interact.  If what I suggest doesn't work for you or one of your employees you might want to seriously consider anger management therapy.

 

 

More articles related to leadership:

Breaking Past $1M in Remodeling: Getting Ready To Do It

Invest In Your Remodeling Business Now, Or Pay Forever

Information and Guidance To Evolve From Being A Contractor To Being A Construction Business Owner

Five Great Books for Remodeling Business Owners

 

Topics: Employee Relations, Differentiating your Business, Culture, Customer Relations, Leadership, Creating Referrals

Five Remodeling Business Myths That Get In The Way Of Growing Past $1M

Posted by Shawn McCadden on Wed, Jan 14,2015 @ 06:00 AM

Five Remodeling Business Myths That Get In The Way Of Growing Your Business Past $1M

Myth_or_Truth-wrThere are many remodeling business myths that seem to have become truths for way too many remodelers. That’s too bad. Believing those myths may be holding them back from being able to grow their businesses. Allowing these myths to remain in place will definitely prevent remodelers from successfully growing their businesses past the $1 Million installed sales threshold.

 

Schema leads us to believe what we experience as true

In an April 2010 Remodeling magazine article I defined and discussed schema. We all have our own schema. Schema is our way of interpreting things and information based on our past experiences.   Without previous experience with something one cannot have schema in that area. We can also have a limited schema about certain subjects if our experience in those subjects is limited. With limited schema our definition of what is true may also be compromised. In other words, if you have schema, but it is limited, you may end up believing something to be true, even though it is a myth.

 

I suggest the video below makes my point

 

 

Here are five remodeling business myths that are easily debunked with some schema

Myth #1: I have to be competitive on price to sell jobs:

If you don’t do marketing to expose how your business is different you will be perceived by consumers as being the same as most other contractors. That puts you into price competition to get jobs. Check out these two articles and try what is suggested to gain some new schema on this topic: Generic Contractors Are Fading Away, Brand Names Are Shining and Why Some Contractors Can Raise Their Prices But Most Others Can’t

 

Myth #2: Home owners won’t pay for estimates:

Most contractors say they can’t charge for estimates in their market place because all the other contractors do them for free. First, that is not true, many contractors successfully charge for estimates. Second, remember your mother: “If all the other kids jump off the bridge on the way to school does that mean you should jump off too? Maybe learning some ways to do it and them giving them a try could change your perspective about charging for estimates. This article can help get you started: Tips For Contractors On Ball Park Pricing and Charging For Estimates

 

Myth #3: Contractors have to wait until each phase of work has been completed before getting paid for each phase:

pocket_change-wrAgain, will you jump off the bridge, too? Will Delta Airlines let you pay after you land?   Completing remodeling services without being paid for them before you do them is in my opinion foolish, and a huge risk for most remodelers.   It instantly creates cash flow challenges in a business where cash is king. Breaking $1M without good cash flow might be the death of your business. Here is how you can create payment schedules that keep you ahead of your customer: Payment Schedules That Create And Protect Cash Flow

 

Myth#4: There are no good employees out there to hire:

Finding good employees is tough and doing it well requires a well thought out recruiting process. However most remodelers get bad employees because they don’t establish well thought out job descriptions before seeking to hire. When that is the case the job description is often being created during the interview, perhaps by the candidate. Check out this article published in JLC magazine for some help in this area: One Simple But Powerful Tip For Hiring The Right Employees 

 

Myth #5: If I give my employees too much training they will leave and start a business of their own and become my competition:

I personally found just the opposite happens. If you don’t give them enough insight and schema regarding what it takes to own, run, lead and finance a business they will leave to start their own. In addition to the training offer them leadership positions at your business, along with a good performance based compensation package. Doing so will make it more likely they will stay. These two articles will offer you some options to address this myth. The first was published in Remodeling magazine: Shared Responsibility: Advantages of Creating a Team of Leaders and Helping Employees to Think Like Owners

 

Looking to gain some schema?

By participating in the Construction Business Owner Education and Peer Group Program beginning in March you can gain the knowledge you will need to try new ways of doing things. The program also includes one-on-one assistance and coaching to help and guide you as you work through the changes.

 

(Note: This is the fourth article in a series of articles written specifically for remodelers who want to successfully break past doing $1M/year in installed sales.  Click here to see a list of all the articles in the series that have been published.)

 

 

Topics: Success Strategies, Worker Training, Business Growth, Opinions from Contractors, Leadership, Sage Advice, Breaking $1Million

Breaking Past $1M in Remodeling: Getting Ready To Do It

Posted by Shawn McCadden on Sat, Jan 10,2015 @ 06:00 AM

Breaking Past $1M in Remodeling: Getting Ready To Do It

We_Broke_1_Million-wr

 

(Note: This is the third article in a series of articles written specifically for remodelers who want to successfully break past doing $1M/year in installed sales. Click here to see a list of all the article in the series that have been published so far.)

In a previous article I discussed how important it is that a remodeler decides whether he or she wants to remain a contractor or become a construction business owner before passing the $1 Million threshold in remodeling. Again, either choice can be a good one, but if you want to keep growing your business and offer growth opportunities to great employees, you need to become a construction business owner.

In yet another article I stressed the point that putting off that decision can lead you and your business from controlled chaos into disorganized chaos. The disorganized chaos happens because the labor intensive and disparate systems being used that got the business to $1M are no longer adequate to handle the increase in activities that come with the additional growth and inherent risk.  You can read my article titled "Invest In Your Remodeling Business Now Or Pay Forever" for more on this topic.

 

Before you decide to become a construction business owner

Becoming a construction business owner can be very rewarding for many reasons.   It’s also not a very easy thing to do successfully. It will take time, money, patience, vision, leadership skills and diligence.   Before you make the jump check out the business owner considerations and the business goals below. These are the kinds of things you will need to work on to help get yourself and your business on the path to successfully break past $1M and increase profits at the same time you grow.

Remember, growing your business faster than your systems can handle is the most common reason for construction business failure.

 

Business Owner Considerations during the Take-Off Stage:

  • Remodeler training for business growthOwners should seek to put a more refined structure in place for the purpose of better, faster, and more accurate information. This is a critical step towards the owner’s ability to evolve away from the micromanagement of employees.
  • The owner should develop measurement milestones and incremental check points relative to a achieving a refined long term vision for the business.
  • The owner must learn to recognize, adapt to and take advantage of changes in the market place, because a lot of changes will happen over the time it takes to grow the business.
  • The owner should seek to add mid level management employees as soon as possible assuming earned gross profit and/or reserve funds can support the required overhead.
  • The owner must focus on implementing critical and timely business adjustments identified by business reports, trends and the opportunities brought to light due to an advancing schema.

 

Goals during the Take-Off Stage:

  • Develop the ability to track business activities without relying on the hard drive capacity of the owner’s CPU (brain and memory).
  • Start the process of developing written job descriptions for how business should be happening.
  • Increased use of standard repeatable methods and create supporting documentation and forms.
  • Remodeler financial reportsGive salespeople the support they need to support sales less on their own, sell more and keep them selling profitably.
  • Develop standard contracts and agreements, reviewed by legal counsel to protect the business.
  • The ability to collect supporting data company wide electronically.
  • The ability to manipulate and interpret the data.
  • Add and ramp up a full time sales person to relieve the owner of some sales volume, allowing the owner to concentrate on other high level activities.
  • Train and allow lead carpenters to be owners of their projects and managers in the field.
  • Identify a production manager candidate, preferably from within the existing lead carpenters.
  • Mentor the production manger candidate into a full time role.
  • Accumulate cash reserves adequate to finance your ability to grow into the next stage.

 

Topics: Business Management, Success Strategies, Team Building, Business Growth, Business Planning, Leadership, Sage Advice, Breaking $1Million

Invest In Your Remodeling Business Now, Or Pay Forever

Posted by Shawn McCadden on Mon, Jan 05,2015 @ 05:00 AM

Invest In Your Remodeling Business Now, Or Pay Forever


Business improvements for remodelers

 

The New Year is here again. For many it’s a time to plan and make commitments for the changes and improvements needed to make the coming year better than the last.  Then there are the remodelers who say they and their companies are too busy working to take the time to remodel their own businesses. What they may not know is that if they don’t invest now to either train employees or restructure their businesses, they will be paying for not doing so for a long time to come.


What am I referring to?

  • I'm talking about proactively taking a look at how efficiently you run your company in order to get better returns on your investment of time, money and focus.
  • I am talking about assessing your company's cost effectiveness and taking into account if employees are properly trained to do their jobs so you don’t have to micromanage them.
  • I’m also talking about creating the ability to actually be “present” when you sit down to have dinner with your family or attend your child’s soccer game.

Retirement planning for remodeling business ownersYou can invest now to train managers or employees and to rework structural shortcomings within your business.  Or you can pay forever by running a shoddy show that won't give you the financial returns that it takes to stay in business and retire before your body eventually gives out.

If you don't do it now, how much profit will you possibly lose until you do set a plan into action?  If you don’t do it now how much will your procrastination cost you over the coming years you are in business; including the compounded interest you could have earned each year towards your eventual retirement? 

I know many remodelers who have no retirement funds at all.  How about you?


Don’t forget about lost opportunities

By sticking with the status quo many business owners are also missing out on opportunities they could have concentrated on if they were not constantly dealing with and fixing the same problems over and over again. For example, at a recent workshop for remodeling business owners I broke the attendees out into several groups and asked them to assess their business’ current status. One group of eight remodelers agreed their production slippage problems hurt them financially at a cost of at least 10% of total volume each year.

I then asked them to reference that in the point of view of being a $1 million/year company. They agreed this 10 percent production slippage loss would equal a $100,000 deficit each year. Would you want that to happen or keep happening at your business?


Here is a tough question to ponder

Does your spouse or significant other know you have such opportunities to make and keep more money?   Or, are you hiding that fact from them and others so you don’t have to recognize and address the shortcomings of your business and or your business acumen?

It's up to you. You can pay now, or you can pay forever.

Topics: Remodeler Education, Contractor Training, Worker Training, Careers in Construction, Business Growth, Retirement Planning, Earning More Money, Production Considerations, Business Planning, Leadership, Sage Advice

5 Ways to Take Your Remodeling Business From Less To More

Posted by Shawn McCadden on Thu, Jun 12,2014 @ 06:00 AM

5 Ways to Take Your Remodeling Business From Less To More

Remodeling business owner burnout

 

It’s real easy as a construction or remodeling business owner to get burned out as you try to keep up with everything.   This is particularly true now that the remodeling market is picking up.  After downsizing to stay in business, and putting in lots of extra effort and hours to make a profit during the recession, many business owners are once again trying to grow their businesses.  However many of them are still using the "do more with less" mentality they used during the recession.  Maintaining this mentality as they seek to grow will definitely add to the burnout they are already experiencing.

For a good number of these business owners doing more with less may have made sense as sales shrunk and overhead expenses had to be cut back.   To clarify things the idea was to do more of what you were already ready doing with less.  Now that the economy seems to be improving if you want to do more business than you have been doing you'll need to do and add more inside your business to support that growth, not less.

 

Five things remodeling business owners can do to take their businesses from less to more:

Get serious about your management style

Advice for remodeling business ownersIf you have lost focus or lack the discipline to put business systems in place and stick to them it’s time to commit to and practice new attitudes and behaviors.  Before you grow your business consider the adequacy of your financial system to predict and measure results.  Do you have a formal marketing plan to guide you or are you winging your marketing?   Do you have well thought out job descriptions you can use to recruit, qualify and hold new hires accountable to?  Have you established benchmarks for the performance of your business systems?  If you don’t have or do these things what example are you setting and what type of employees will join and or stay with your business?

 

Don’t spread yourself too thin

If you plan to grow your business it and your employees will need your attention and guidance.   If your focus is being watered down by other outside activities like a second business, community activities, politics or even involvement at your church; the leadership and oversight needed at your business may be compromised.   There’s nothing wrong with being involved in outside activities, but make sure you put qualified middle management and business metrics in place first.

 

Be sure to think and act like a professional

OSHA for remodelersA growing business that wants to attract and keep good employees needs to act professional.   This means having a proactive and strategic marketing plan in writing.  It means preparing a financial operating budget and staying within it.  It means investing in training and mentoring your employees to be the future leaders your business will need.  It means creating a profit sharing strategy and or compensation strategies based on performance. It also means operating legally and safely.

 

Develop organizational charts, career paths and improve your recruiting process

If you think it’s expensive to train your employees only to have them leave and go elsewhere, think of how expensive it will be if you don’t train your employees and they stay.   If you plan to invest in training your employees make sure you can share your business plan with them.   Your business plan should show how you plan to expand your organizational chart and the opportunities they have if they are willing to grow with the business.  Your goal should be to offer opportunities that are mutually beneficial to the employee as well as the company.

 

If you want to step back make sure your business and the new leader are ready first

Remodeling company leadershipBefore you as the leader can step away from your business the business needs to have a new leader already in place.   Many business owners are forced back into leading and managing their businesses because the person they hired to do so did not have adequate leadership skills and or wasn’t yet seen as the leader by the other employees.   Don’t make this mistake at your business.  Before you step away make sure there is a successful transition of leadership from you to the new leader; in the eyes of the employees as well as your customers.  Also, make sure you have a way to measure the performance of the business and the leader before you pull away.   Again I suggest you have this in place and confirm it is working before you transition out of your office and your roles at the business.

 

 

         

Topics: Business Management, Worker Training, Recruting, Business Growth, Business Planning, Leadership, Sage Advice

Help With Evolving From Contractor To Construction Business Owner

Posted by Shawn McCadden on Tue, Mar 25,2014 @ 06:00 AM

Information and Guidance To Evolve From Being A Contractor To Being A Construction Business Owner

Contractor or construction business owner

 

With remodeling spending expected to grow by double digits this year many remodelers can and will be taking advantage of the opportunity to grow their businesses and their market share.  If this includes you, be careful.  One of the most common reasons for small business failure is growing the business faster than the systems required to support that growth.

 

History shows us that as the volume of work increases at their businesses most contractors will be challenged to produce the work. Challenges will include important things keeping up with the workload, finding and keeping good craftsman, finding and keeping project managers and or lead carpenters, the handoff from sales to production, and managing allowances. 

LIRA Report showing 2014 spending growth

 

Decision time: Will you remain a Contractor or become a Construction Business Owner?

Construction business systems improvementMy experience has shown me that those business owners who think of themselves as contractors will typically be the ones who experience most if not all of these challenges as they grow their produced volume of work.   Rather than do things differently they just try to keep up with the growth by doing more hours themselves and hiring more people who will need to be supervised.   On the other hand those contractors who seek to become what I refer to as “construction business owners” will be adding to and improving their business systems so they and their team members can share responsibility, work smarter and work together more efficiently.

The good news is that being able to charge enough money to first invest in putting helpful systems in place, and then also continually paying for them once they are in place, is becoming practical again for many more contractors.   According to a recent survey by LEK Consulting, discussed in an article by Craig Webb, Editor in Chief of Remodeling magazine, contractors are now feeling reduced price pressure from consumers and are enjoying greater opportunities to be selective about the jobs they do take.  This is great news if you have been waiting for a good time to risk growing your business.

 

Improving production at a remodeling businessWhy I created the list of article links listed below

In mid April I will be headed out to the west coast to help one growing contractor and his team members create and implement the systems the business needs to improve their production efforts and take advantage of growth opportunities he is experiencing in his local area.   We will have a lot to cover in a few days together.  To help him and his team get ready for my visit I sent him a collection of links to articles I think will help them get the mental and creative juices flowing and will help maximize our discussions. 

As I was putting the article links together it occurred to me they would be good ones to share here at the Design/Builders Blog.  I also added a few more here than I had sent him.   If like my client you want to move from being a contractor to being a construction business owner I suggest you read them all and do so in the order they are listed.   I hope you find them helpful and enlightening.

Feel free to offer your own thoughts and or suggestions in the comments area.  

 

Links to articles for contractors who want to grow their businesses.

The Design/Build Remodeler’s 10 Step Plan for Success

3 Objections Your Boss May Have About Hiring an Industry Expert

Afraid To Hire Employees For Fear Of Running Out Of Work For Them?

Don’t Underestimate Your Estimating System’s Potential!

Tips for Reducing and Controlling the Effects of Construction Allowances

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

An Overview of the Lead Carpenter System

Interesting Considerations for Putting the Right Employee on the Right Job

3 Good and 1 Bad Reason to Offer Profit Sharing Rather Than Bonuses

Checklist for Implementing the Lead Carpenter System

 

 

Topics: Contractor Training, Business Growth, Production Considerations, Leadership, Sage Advice

10 Steps To Building A Successful Construction Company

Posted by Shawn McCadden on Tue, Jul 16,2013 @ 06:00 AM

10 Steps To Building A Successful Construction Company In The New Economy

For the last five years or so many construction business owners were operating their businesses in survival mode. With the economy improving and residential construction activity picking up many contractors will be looking to grow their businesses again.  If you are looking to grow your business here is my list of 10 steps contractors should take to make the switch from surviving to thriving. 

10 Steps to successfully growing your construction business

 

10 Steps to successfully growing your business

  1. You can't do it all; no matter how much you try.  Find the right people with the right skills and personalities to be part of your team.
  2. Employee training for contractorsHire and properly train employees before you already need them and their required skills up and running.  
  3. You are not the Energizer Bunny!  Make sure you have a plan for recharging your batteries and keeping up the motivation you will need to make your dream business happen.
  4. Work on your leadership skills and make sure you understand the difference between leadership and management.   Good employees want to be lead, not supervised.
  5. Be careful about and watch your overhead expenses.   Many construction businesses failed during the recession because they could not cover the cost of the overhead they were committed to.
  6. Know the costs of doing more business before you do more business so you can use the right markup to price your jobs profitably.
  7. Business overhead for contractorsBefore you actually increase your overhead costs test the marketplace you plan to work in to make sure you can sell at the increased pricing you'll need and can sell enough work at that price.   Consider if you are in the right market to do business but also if you have the right marketing and sales skills in place.
  8. Be sure to price your work for the actual costs you will incur at the time you produce it.   Labor and many material costs are expected to go up dramatically before the end of the year.   If you like the idea of an extended backlog of work find a way to protect your planned profits from escalating costs.
  9. Know your limits.  Do what you can yourself but get the professional help you need to do things right; to avoid costly mistakes, increase the likelihood of success and maximize the results for your all your efforts.
  10. Revisit number one above.   Share your plan and your measurables with someone who can and you will allow to hold you accountable to following your plan and achieving your goals.  Make them part of your team.

 

One more thing; Make sure you are thinking about retirement

retirement for contractors

 

A recent study by the National Institute on Retirement Security found that the median retirement savings of households nearing retirement is just $12,000.   What would you think of a business owner, ready to retire, who only had $12K saved for retirementIf you sell your work and services on price, consider that you are contributing to your customers' retirement funds at the expense of your own!

Subscribe to the Design/Builders Blog

Money is made during the sale, not during production!

 

download free business assessment worksheet

 

Topics: Success Strategies, Team Building, Business Growth, Mentoring/Coaching, Business Planning, Leadership, Sage Advice