It’s almost the end of the year again, and that’s a good time to look at how you have been doing business. What standards have you set for your performance, and are you keeping those standards?
If you were a mouse in my pocket, you’d hear the complaints I hear about both general and specialty contractors who don’t answer the phone or return phone calls. They show up late, if at all. They don’t bother to clean up after themselves. Those are probably the most common complaints. Sometimes I hear them from the buying public, and many times I hear it from other contractors.
When I got into this business back in the 1950’s, I did what I was told and did it well, or I got a boot in the behind, literally. Quitting wasn’t an option because we lived in a small town and there weren’t that many jobs. If you wanted to earn money, you did the job the way it was supposed to be done, in a timely manner, or they’d find someone else to do it.
It wasn’t just the workers like me who needed to perform well. The business owners also made sure they did their job, did it well, and in a timely manner, or they’d be out of business. If you lived in a small town, like we did, that could happen rapidly.
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Are you returning every call the same day or by 9 am the next morning? If not, why not? You aren’t too busy, that’s an excuse. The truth is, you’re either too disorganized, or your business is a hobby, and you don’t care about the details. That is reality.
Do you show up for every appointment on time? When you set an appointment, you’re giving your word you will arrive at the appointed time. Would you want to do business with someone who doesn’t keep their word?
Are your jobs kept clean? You made a mess, so you clean it up. No one else should have to pick up after you.
Do you set a job schedule and hold to it? Setting a job schedule shows your client you’re serious about the job, and it helps you stay on track to get it finished on time. Things happen, but fewer bad things happen when you have a schedule.
Too many construction business owners today seem to think the world revolves around them and they can do as they darned well please. Truth be told, in many cases they’re right. They don’t have to answer their phone or return calls. They don’t have to show up on time or at all. They can leave their jobs a huge mess and if the other guy doesn’t like it, that’s their problem. This is often a product of a good economy.
It won’t always be like this. The construction industry, just like the economy, has cycles. When it’s good, like it is right now for some of you, it’s great. But that’s when it’s easy to slack off. You can’t alienate the buying public and/or your fellow contractors and expect them to forgive and forget when you need them.
If you don’t do the simple things that a responsible business owner should do, don’t expect to have a long-term future in this business.
I don’t know what next year holds. For those of us in the United States, it will be politically volatile, but we’ve had so much of that already maybe it’ll all be background noise, and the economy will move on like always. On the other hand, it’s been strong for many years and there are signs that things are changing.
Whatever happens, aim to make 2024 better than 2023. Make a plan so you have a goal to shoot for. We always recommend year-end review and planning, an exercise where you look at how you did this year (sales, overhead, production, profitability), what you’d like to see next year (sales volume, profitability), and how you’re going to make it happen. The exercise also involves reviewing what went right and what went wrong with clients, jobs, contracts, employees, subs and suppliers, and more. We cover this exercise in detail in Year-End Planning Part 1 and Part 2.
When you make your plan, you set the standards for how you operate. Make those standards public so you can be held accountable. Our standard is outlined in our Mission Statement, and explained in What We Believe.
One final thought here. Over the last 20 plus years, we’ve had many clients who used our two papers and walked through the planning process for their upcoming year. Those who gave it their best effort and then followed through, often hit their sales and profit goals by the beginning of the fourth quarter. They didn’t let things happen or make excuses because things did not happen. They got in, did the work, and enjoyed the fruits of their labor. We’ve seen many contractors reach 10 percent net profit, some as high as 20 percent. That is what can happen when you set and make your goals happen. Why leave things to chance?
If you know another contractor who doesn’t run their business like they should, send them a copy of this post. We like to see the good guys win, and we all know our industry needs more good guys.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations.
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