The Introduction of Pragmatic, Simple, and Manageable Business Fundamentals Can Provide Immediate Results in Profitability
Small contractors too often view planning as a word describing some complex, big-business process that has no relevance to their “gotta get it all done myself” world. In most cases, this view is valid. However, selective implementation of basic planning disciplines can be the difference between success and failure. We recommend small businesses start with the basics of job planning and work up into more complex planning disciplines for the fastest results.
“entrepreneurs lose a staggering 15% of their day due to failure to properly anticipate the material and tool needs”
If you are not deploying job planning checklists, documented job budgets, or basic project management tools in planning the day-to-day course of your business, a strategic plan or business plan will be of little use.
Unfortunately, the word “planning” can bring to mind a useless business plan developed for a Banker presentation back when you started your business. In reality, it should be viewed as the formalization of itemizing activities which lead to increased revenue generation, efficiency, control, and profitability.
Below is the sequence of planning tools that we suggest contractors use as a priority in developing their planning processes:
Must Do Planning Tools for Small Contractors:
Project Wrap-Up Reporting Process/Templates with Punch List)
Project Time Schedule Templates (for Internal and Customer Use)
Subcontractor Specifications and Timeline Requirement Templates
Job Material Checklist Templates
Formalized Proposal Development Processes with Costs and Margin Calculations
Project Budget Process Templates
Customer Satisfaction Leads to Profitability
High on the list of priorities are tools which you can share with your customers. Organized and professional customer communication tools at the start and completion of any job can assist you in exceeding customer expectations. The corresponding increase in customer satisfaction will:
Accelerate payment for the job
Allow you to get more work from the customer
Increase your potential for New Prospect Referrals from the customer
Customer satisfaction is directly correlated to your ability to create the perception of:
Adhering to schedules
Minimizing customer surprises and communicating problems in advance
Maintaining a customer perception of your controlled management of subcontractors and other vendors
Proposals and Budgets
What does the customer see before they know your work? Prospects view your appearance and presentation and are left with documents which forever cast their impressions of your business in terms of; organization, image and professionalism. In this millennium, handwritten proposals convey a negative message. It is probable that nearly 80% of your customers have e-mail and can receive attached proposals and specifications immediately following your site visit for job estimation.
Beyond the value of a quality presentation, such a process will allow you to capture e-mail addresses, which will, in time, be among the most valuable marketing assets of your emerging business.
Estimation is not an art but a science. As such, it can be reduced to measurements and equations which, when applied consistently:
Reduce error
Insure application of consistent specifications
Allow for replication of a consistent process when and if you delegate bidding and estimating processes to others.
A multitude of software programs are readily available which can apply your logo, a standard set of formulas and appropriate marketing language to create a consistent and professional proposal for your company. Portable printers are now available for any laptop and priced to a level where a fraction of a single job’s revenue could support the investment.
Time is Money – Literally
In a recent survey we conducted of Decorative Concrete Contractors, it was estimated that entrepreneurs lose a staggering 15% of their day due to failure to properly anticipate the material and tool needs before arrival at a job site. This number equates to a potential cost of $20,000 annually to most of these business owners.
Less than 10% of those surveyed could boast about having a pre-set checklist prepared in advance of each job for themselves or their personnel. This basic and fundamental planning flaw could be corrected by devoting a portion of one weekend to the development of an appropriate form and then preparing copies.
Anticipate and Eliminate “Last Minute” Subcontractor NO SHOWS
Any project that involves a subcontractor will increase the potential danger of missed deadlines, delays and problems.
Although occasional missed deadlines are inevitable, the real costs start mounting when you learn of the problem on the job site day. Sequential delays mount and there is no time for customer communication or appropriate rescheduling. A simple calendar of pending subcontractor schedules will allow for disciplined weekly and daily contacts with subcontractors to minimize surprises.
Any printed forms that you can provide to your subcontractors, such as defined tools and material requirements, greatly improve your chances of on-time and on-budget delivery of their service.
Can It Be Just That Simple?
Yes!!! It is rare to find a small business contractor who applies discipline in utilization of the six basic planning tools:
Project Wrap-Up Reporting Process/Templates with Punch List)
Project Time Schedule Templates (for Internal and Customer Use)
Subcontractor Specifications and Timeline Requirement Templates
Job Material Checklist Templates
Formalized Proposal Development Processes with Costs and Margin Calculations
Project Budget Process Templates
When you do find a small contractor who deploys these tools and techniques, LOOK QUICKLY, since their business will be easier to manage and they are destined to grow to be a big business!
Paul J. DelFino is a principal of the consulting firm Opportunity Inc. For nearly 15 years, he has assisted entrepreneurs within service and contracting businesses to increase their return on investment. Visit http://www.opportunity-inc.com to contact them or learn more about their services
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