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Planning is for Winners
Looking deeper at the reasons for their prosperity it was glaringly obvious. They control their expenses! How? The answer is even more simple...and obvious. They PLAN!
Each Monday morning they hold an employee wide meeting that reviews and reminds each crew as to their work schedule for the week. In front of everyone each crew provides their strategy to get the week's scheduled work completed. Normally this type of meeting is attended for crew leaders, estimators, schedulers, and owners. Not at this company, everyone is there. In fact, members of each crew actually provide the strategy and execution plans for the week.
The second obvious aspect of planning is what is completed for each project completed. Each morning each crew meets to discuss what is needed for that day. No truck leaves the yard until every truck and worker has exactly what they need to complete that day's work. At the conclusion of each day the crew then reconvenes to discuss what happened during that day of work and then discussion about what will be needed the following day. The crew leader takes notes, if needed, on each meeting.
Now, many contractors hold meetings such as described in the previous paragraph. What then makes this contractor's effort unique? Quite honestly, it is the amount of detailed thinking and planning that takes place. Let me briefly share some of the critical components of successful planning that is embraced by my contractor friend.
First, the plan for the day's project(s) is documented. Each day the crew leader documents specifically what the particulars for that day are, including:
- Material need
- Labor need
- Equipment/tools need
This is merely the beginning. Next, the crew discusses:
- What preparation is needed?
- Who will complete the preparation?
- What is the method or process that will be followed to execute the project?
- Confirmation of understanding of the prints or drawings?
For many contractors, the previous questions may appear to be overly simple and assumed. My experience with contractors however leads me to believe that the leaders may in fact raise these same questions however they are most often raised inside the leader's head. Most crew leaders do not discuss this information with their crews. This is a tactical mistake that leads to misunderstanding and a waste of worker's time on the job site.
Another final effort that is practiced by contractors really on their "A-game" is the allowance of questions to be raised by the crew workers, the very people who will be executing the plan. Engaging your crew in the planning phase of any project, no matter what the size of the project is, will breed greater attention to details, more focused energy on getting the needed results, and actually reduce wasteful costs due to workers lack of knowledge or understanding about the project needs.
In review then let me outline what you need to do to make planning more of a positive and effective tool and technique.
- Document your plans for each project. (Don't assume anything by anyone!)
- Engage the actual workers who will be completing the scheduled work in the planning discussion.
- Ask the same questions for each project, such as:
- What are the Material, Equipment/Tools, & Labor Needs?
- What preparation must be accomplished prior to starting project?
- How can I best position my crew to complete the work in the most cost effective and quality manner?
- What contact(s) must be made with the client, other contractors, suppliers, etc.?
- Are our copies of drawings/prints complete? Any changes needed?
- Conduct a "Post Mortem" on each Project. Discuss lessons learned, needed adjustments for the next project.
There really isn't anything unusual or extraordinary about the four point outline. What is unusual and extraordinary are the contractors who are disciplined to practice their planning efforts consistently, no matter the size of the project. Contractors cost themselves greatly when they pay little to no attention for planning on smaller jobs. It is often the smaller jobs that can cost you the most!
Planning is more than simply scheduling future work. It is the methodical breakdown of everything that will be executed to complete the project that moves a contractor from average to superior. For my money, focus more on planning and you will see greater return for every dollar spent!
Brad Humphrey and Bob Dusin are partners at Gangbox Incorporated, a training and consulting company that targets the construction industry. They work with all aspects of the construction business - job planning, job costing, sales and leadership development. For more information about Gangbox Incorporated go to http://www.gangboxinc.com.
Building Value for an Exit Strategy
If you are a little gray around the temple this scenario is probably all too familiar. If you are just beginning your upward path in ownership this same scenario will become familiar, maybe earlier than you might imagine.
In this article I would like to give you a little taste of what we will certainly discuss further at the National Pavement Exposition 2006 in Charlotte in my workshop by the same title as this article. For a business owner, the second most important objective to accomplish after running a profitable business is to insure that their exit strategy from their company is done seamlessly, without even a faint dip in production, loss of invaluable people, and profits.
There are three simple "laws" to building value for your exit strategy that I want to present in this article.
1st Clarify Your Life's Purpose/Mission
2nd Define Critical Roles & Responsibilities
3rd Entrust Your Company to Knowledgeable People of Character
Clarify Your Life's Purpose
It is extremely vital to your own mental health that you are clear about what you "want to do with your life." Having a plan for the next part of your life is smart and life saving. Many contractors go crazy when they finally leave their business think that retiring to golf, fishing, traveling, or taking care of grandkids is going to satisfy their thirst for satisfaction. I know because I've been engaged with many pavement maintenance contractors who have struggled with letting go of their business.
Before you ever begin to plan a transition you must come to grips with what you will do to occupy your time once you've really exited your company. You can always fish, travel, etc. Heck, you can do that before you exit. No, you must begin to consider what more with your life do you want to develop. Let me share a few brief examples of what some of my retiring friends have done once they left their construction business.
- Served on boards in a consulting position.
- Provided business advice to small company owners.
- Joined a ministry that engaged their business knowledge or construction experience.
- Acted as a trainer for their company of new employees.
- Moved into a "business development" role for the business.
Now, not all of the possible roles to move to require a full week of work. For many owners they want to keep the taste of competition fresh in their spirit without knocking themselves out for forty to sixty hours of work each week. Based on my observations of many pavement maintenance organizations having an experienced veteran around for advice giving or simply just listening can strengthen the overall productivity of the business.
If part of your purpose is to remain connected to your company it is just as important that you realize just what role you will play and the contribution you intend to make. That leads us into the second law to consider enforcing upon yourself.
Define Critical Roles & Responsibilities
You will do more harm than good for those left behind to lead your company if you do not define the critical roles and responsibilities of those individuals. Even if it doesn't appear that there will be much of a turnover of people it is still good business acumen to sit down well before you exit and clarify who will be doing what, when, where, and how.
If your son or daughter will be taking over the reins of the business then it is very important that you assist them in spelling out what their job will require. Likewise, it will be helpful to your child that other leadership positions in the company are well defined. This effort is especially beneficial if many of the other leaders in the company had been hired and led by you over the years. These employees will only naturally feel some remorse with your departure about having to deal with "Jr."
Once you have defined critical roles and responsibilities for the company it will be good to have the people represented by the roles to meet and discuss openly. This will facilitate a better understanding as to what the new chapter in their life will read like. It will also assist your son or daughter in positioning what they will want and need from those individuals in the positions defined.
Should you remain in some capacity for the company then you need to be very clear as to what your role and responsibilities will be. For example, if you had developed good relationships with bankers then perhaps you might continue to operate in this capacity for a period of time. If you handled relationship control with material vendors but feel that your successor should handle this important duty then you must be clear in your role going forward not to allow the material vendors to complain to you when your son or daughter do something they (i.e. vendor) do not like.
If your spouse has been the book-keeper and intends to exit with you then you will also want to tighten up their new role. It is very common to have the spouse, who for twenty-nine years made the deposits, called on late payments, corrected payroll mistakes, etc. find it difficult to walk away. This must be clearly defined as well or there will be a quiet rebellion brewing by those left behind to take over book-keeping tasks.
Entrust Your Company to Knowledgeable People of Character
Our third law seems obvious yet often the exiting owner is blinded by old ties or quite fears that their son or daughter may not quite lead the business as they once did. This can lead to the owner entrusting key positions to individuals who might have the best interest of the exiting owner in mind but not necessarily that of the owner's replacement.
It is vital then that key positions, including that of the actual replacement for the exiting owner, be filled with people who are bright, knowledgeable, a good "student," and one of unquestionable character. This effort must also be just as strictly followed for the selection of the owner's son or daughter.
One of the most difficult decisions a parent might make as a business owner is recognizing their son or daughter for the strengths and weaknesses they possess. If the son or daughter simply lacks the needed skills, knowledge, or worse, questionable character, the parent/owner has no business positioning their child in the chair to run the business.
As challenging as this situation might be the parent/owner would be better off dealing honestly and upright with their son or daughter about their decision to hire or promote a non-family member to run the business. The child, or children, might yet work in the company but with clarity of purpose and commitment to being a positive contributor to the future success of the company.
Building value for your exit strategy certainly involves additional components than the three we addressed here but we'll address those in my workshop in Charlotte. For now however, realize that it is often the people side to the exit strategy that often causes the greatest heartburn or hard feelings. Be clear about your direction, purpose, and set out a clear path for those who will be taking your company forward.
See you in Charlotte!
Brad Humphrey and Bob Dusin are partners at Gangbox Incorporated, a training and consulting company that targets the construction industry. They work with all aspects of the construction business - job planning, job costing, sales and leadership development. For more information about Gangbox Incorporated go to http://www.gangboxinc.com.
Business Development for Painting Contractors
- Placing advertisement in local newspaper
- Yellow page ad
- Buying sports tickets to give to customers
- Joining the local Chamber of Commerce
- Speaking at your trade association's monthly breakfast
- Creating new "point of sell" materials
- Sending out direct mail pieces on your business
If you selected all of the above then you are right. Business development engages all of the items listed above. However, if this is the extent to your business development effort then you need to grab an entirely new perspective on business development.
Business development is not just marketing, sales, or advertisements. Business development is the strategic approach that you need to take that sets out a plan on how you are going to grow your business. Business development is not just hiring more estimating professionals. Certainly you may need more people estimating but this alone is not business development.
Briefly, business development is the strategic approach that considers and aligns all of the disciplines known to help grow ones painting business, no matter whether you are a painting contractor, manufacturer, or materials provider.
The strategy involved with business development requires focused attention that looks to dig deep into the community, examining opportunities that need your firm's products and services. Contractors can hire a talented sales and marketing manager, experience success, and still not maximize all the best potential work that is available. Likewise, you can spend a huge amount of money on advertising your firm and realize some terrific returns in business and still not have a real clear focus on where the better business is located or know who the "players" are for your future success.
Let's take a brief peek at each of the components listed above. A few of the components have been combined due to the more common understanding of the items and to the brevity needed in this article. (For more information on any of the items please contact me.)
Marketing, Sales, Advertising
These three are combined due to greater familiarity most owners and leaders have with the three items. Should your business have a marketing strategy? Yes! Should you look for ways to enhance your sales? Yes! Should you spend money on advertising? After a review of where to spend your money...YES!!
However, each of the three items is better leveraged after some of the other components are in place and providing greater information and insights into your market opportunities.
Research
This component engages research of your competitors, growth areas of your market area, demographic studies of forecasted growth by industry type, and even the study of what outside investors are considering your market area.
Spending time and money on research is perhaps the best investment you can make. Research is also not as expensive as you might think. First of all, there is ample information available on the Internet. Also, most of your local colleges and universities are full of students who are either interested, or available, to do research for you due to class projects. Even if you have to pay a college student to research, the cost is often little more than minimum wage.
Several companies provide reams of information at a cost that is often more than justified by you winning just one or two jobs a year coming from the information you acquired from the company. Not to plug just one organization but McGraw Hill's Dodge Report can be a great source of enlightenment for an annual fee. There are other groups out there as well, all providing information that can point your strategic attention to a particular market or industry type.
Benchmarking
You need to track your sales efforts. This can include tracking how many bids you complete, how many you win, and the dollar value of each. You might also track how long such sales cycles are to determine the amount of time that is involved. You should track all of this by geographical areas, industry types, and by range of dollar amount.
The benchmarking comes to play by being able to compare your current numbers with past numbers. This can begin to point you into decisions based on your company's successes and failures and point to where you need to focus your firm's sales, marketing, and advertising dollars.
Community Involvement
Business development also considers where in the community the organization should be more active. Should we sponsor a soccer league for children? Should we be part of the fund raising effort for a local hospital? Should we serve on a local board that can open up doors to our company?
These and other questions should always be reviewed. Community involvement suggests that we should be considering more personal involvement with local banks, schools, hospitals, volunteer organizations, country clubs, etc. You can't do everything but you should be involved with the entire networking process. Business development is really opening up the right doors and establishing the right relationships that can profit the company.
Public Relations
Related to marketing, public relations focuses on how to make your company more visible. The effort might be as simple as placing an announcement in your local newspaper about the newly hired chief financial officer for your company or as complex as paying for radio advertisement about your newest office grand opening.
Public relations examine all the means to getting the word out to the public or your potential client base about your company. Public relations can also be maintained through newsletters and seasonal gifting to current clients.
Internal Resource Alignment
Perhaps the most overlooked component of business development. Business development should regularly consider who is on staff, what the strengths are of the company, and then look for means to leverage those resources to help grow the business.
One quick example will help here. I have regularly worked with contractors who proved without a doubt that their field leaders, whether superintendent, supervisor, or foreman were terrific with clients. Customers would actually take the time to write notes of great appreciation about the professionalism experienced with the leader and their crew. Yet the contractor did little with such feedback, sometimes not even letting their leader know.
If you have terrific field leaders, utilize them in your business development. Build them into your sales efforts. If you do billboards, get their faces up on the board. Leverage such strengths in your overall plan to grow the business. Don't underestimate what new prospects will appreciate knowing about the very people who will be performing their work.
Business development done right is huge. It requires more than just a few hours a year about deciding whether we're going to "buy baseball caps, coffee mugs, or pens." It is an entire discipline that when exercised appropriately, can open the door to greater business opportunities than any contractor can imagine.
It is important to regularly assess the "differentiate or die" position. Business development is that division in your business that is best situated to assist you in making sure that your business is unique and presented in that fashion to your market place.
Brad Humphrey and Bob Dusin are partners at Gangbox Incorporated, a training and consulting company that targets the construction industry. They work with all aspects of the construction business - job planning, job costing, sales and leadership development. For more information about Gangbox Incorporated go to http://www.gangboxinc.com.