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Archive for October, 2008

tips of getting back ur lover

Monday, October 20th, 2008

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tips on getting your ex bf back

interesting and beneficial.  We have enjoyed seeing all the comments posted so far for our other bloggers.  What would you like to read about?  Let me know what we can write about to make this site the one you go to first every morning.

How has your business been in the past few weeks/months and what is the outlook for you moving toward year-end and into 2009?  What kind of changes do you anticipate making to keep your bottom line positive?  Will those changes relate to equipment, people, cash flow, marketing or technology?  Where do you expect to focus your energies, cut back or re-evaluate to deal with a volatile economy?

Now is certainly a time for action, reflection, and…well, more action.  None of us can rest on our laurels or assume that what has always worked before will continue to work.  We must be educating ourselves, reading and listening to all that is going on around us.  That is why I blog now, that is why I went on Twitter this weekend and started to Tweet (check this out http://twitter.com/tambram and follow my tweeting).  You may want to Tweet as well, or blog to market your business.  I have also been on Linked in (www.linkedin.com) for a while—a business network you might consider as a marketing tool.

We must all look for how to better market ourselves, better provide for our clients, better run our companies, better manage our staff so we can stay in this business until we no longer want to or no longer can work.  That is our challenge—a big one.  But learning something new every day just makes it more fun to get up every morning.  What is something new you learned today?

The Economy and the Construction Contractor

Sunday, October 19th, 2008


Obviously we have been getting a ton of questions about the economy and what we believe the current market holds for contractors. 

With the people we talk to on a regular basis including contractors, developers and people who provide services to the industry we can place companies into roughly three major categories:

  1. TROUBLED:  This is the group that thanks to our media’s philosophy of ‘bad news sells’ we hear the most about.  The truth is that in most cases when we start peeling back the layers of the onion it is apparent that many of the companies in this group are having difficulty or failing due to reasons that were present prior to the overall economic problems.  The economy has only highlighted these underlying flaws in strategy and execution.   
  2. STAYING THE COURSE:  Construction has always been a cyclical business and for those companies with management teams that have been through this before they are simply staying on course making minor corrections but avoiding rash moves that lead to over-correction and more problems.  For these companies they will emerge with a stronger team and will have executed plans to make already lean operations even leaner. 
  3. GROWING:  There are a percentage of contractors out there who have built their businesses for long-term stability including having diversified revenue sources and conservative financial management systems.  During boom times they saved their pennies and have always been on the lookout for strategic opportunities.  They are positioned to grow through a downturn by being able to build at cheaper prices (for developers), have the time and money to improve their business infrastructure and even start or buy into new markets at discount prices.  In addition these businesses will have access to talent that was not available in a booming market. 

Whatever group you are currently in your goal should be to focus on moving your business into the ‘GROWING’ group.  Some of the elements that every company should be working on in order to move their businesses in that direction include:

  • REVENUE DIVERSIFICATION:  All sources of revenue have different sales cycles and are tied to different elements of the economy.  If you are tied too closely one source of revenue your business may be subject to rapid growth but also to rapid decline – for instance anyone related to the production housing markets in rapidly growing metro areas.  Revenue diversification is painful and slow but once a company is properly diversified the overall earnings become much more predictable.  Does your business have a mix of public, private and institutional revenue?  Does your business have service elements along with new construction?  Remember that when businesses can’t afford to build new structures their spending on maintenance increases. 
  • BIZ-DEV AS A PROCESS:  One of the weakest disciplines we see with all contractors is their business development processes.  This goes hand-in-hand with revenue diversification and growth.  Do you have a centralized customer list that everyone in the company works from?  For each revenue source (market area) do you have an exhaustive list of all potential customers in a centralized database?  Do you have a regular and formal communication program that keeps your company’s name in front of all customers and potential customers at least quarterly?  Does at least 25% of your business each year come from new customers?  If you don’t have business development down to a process then you open your company up to significant problems when existing customers or markets start to tighten. 
  • ACCURATE SCOREKEEPING:  Many construction businesses that we see have poor financial reporting systems in place.  If you can’t see a clear path from a particular source of revenue all the way to the net profit line including accurate accounting of direct and indirect expenses associated with that source of revenue then you can’t make accurate management decisions.  This is something we see as a problem in companies of all sizes and sophistication levels.  Having financials that provide an accurate picture of exactly who is contributing (or not contributing) what is crucial especially in times like these where you need to make hard decisions about what to cut and what to invest money in. 
  • FINANANCIALLY CONSERVATIVE:  Businesses and individuals who are being hit the hardest right now are typically those who were the most leveraged.  It is a perfect storm of failure to get hit by both slowing revenues, later payments from existing clients and tightening of credit.  Businesses who remained relatively unleveraged and worked hard to build working capital are able to make great decisions right now about how to use that capital. 
  • TALENT MANAGEMENT:  This is one area where the best companies really shine.  They have developed strong, loyal and cross-trained talent that can effectively scale up in boom times while effectively scaling down when necessary.  We saw too many businesses that took advantage of a single booming industry such as telecom in the late 1990’s and they built sizable organizations but their depth and breadth of talent was limited.  Many of their people could only do a single function and while that worked well for the original Ford assembly line it does not work very well for a contractor when economic changes in a market require scaling back.  An organization with strong cross-trained talent can scale back to a much leaner “fighting weight” than an organization with a bunch of people who are only good at a single discrete function of the business. 

There are dozens of other factors that flow into this including investment in internal systems for streamlining operations but these are basics that every company should have been working on and should continue to work on. 

If your company falls into group one and you take a hard look I bet that you will find some underlying problems in one of these areas; most likely in the revenue diversification and conservative financial management of the business. 

We will be discussing each of these in more detail in upcoming posts.  In the mean time reflect on this graphic showing market activity from last week taken from Sunday’s NY Times.  As much as it feels like it the volatility of the market does not really change the underlying dynamics of a business. 

Do some research on what Ben Graham calls “Mr. Market” and read into how Warren Buffet describes having a business relationship with “Mr. Market” in one of Berkshire Hathaway’s annual reports.  Some Google searches should turn up some good reading.  Right now we are experiencing a challenging time when there are some serious underlying problems with the market.  This is making “Mr. Market” moodier than usual and this moodiness is doing more damage than the underlying root causes.  As a contractor keep in mind that… 

Structures still need to be built and maintained – contractors still need to perform those functions. 

As always if you have any questions or situations you would like to see specifically addressed in this blog please leave a comment or email david@dbrownmanagement.com


How safe is your cash?

Thursday, October 9th, 2008

Interesting times we are going throuht.  While not a hot topic in the surety world more attention is being paid to the banks construction firms use.  With funds easily exceeding FDIC insured amounts the concern is less about maintaining lines of credit and more about waking up some morning to find out you just lost hundreds of thousands of dollars because your bank shut down and you were over FDIC limits. 

Another real concern is the banks your general contractors are using.  I’m sure your confident you work for strong GC’s.  Well hopefully those general contractors are also using very strong banks and taking measures to protect the large progress payments they receive and hold.  If something were to happen on that end the financial impact on subcontractors could be devastating. 

Keep an eye on your institutions and take precautions to protect your money.  If possible, and we know it is hard, make sure your progress payments are being held in a strong institution as well.

Construction Company Marketing Package

Monday, October 6th, 2008

QUESTION:  I Need To Market My Construction Business More – What Are The Elements Of A Good Construction Marketing Package?

This is a question that we are getting more and more these days considering the tightening of the construction market and economy as a whole that has gone on for the last couple years. 

The first part of the answer is that you should have been focused on marketing before the economy started to tighten because marketing takes both consistent effort and time to show results. 

When I look at the financial performance of our clients including critical indicators such as backlog, the ones that are doing very well right now are the ones that have always had and currently have a strong focus on marketing.  The ones that are having difficulties are the ones where culturally their organizations were more focused on “doing work” during the booming economy rather than marketing. 

OK – so regardless of where your company or the economy is at, you should be focused on marketing your business every day. 

“Good marketing enhances your ability to say ‘NO’ to bad customers.”

Taking things in order first you need to decide on a few things before you even start to design your marketing package:

  1. Strategy – Target Market:  Before you start doing anything in regards to marketing, you should figure out generally who you should target and with what services.  It is important to look for markets where money is still flowing – marketing to the production residential builders today is probably not a good idea!  Good markets to look at involve some type of service/repair – in good times and especially in bad money gets spent to maintain existing facilities or infrastructure. 
  2. Differentiating Factor:  After deciding what potential markets are out there with the most potential, take a hard look at your company.  You need to decide where you have a differentiating factor that sets you apart from the competition.  This may be experience, specialized equipment, key personnel or relationships.  It is very important that you are honest with yourself at this point about what truly makes your company different.

Where target markets and your differentiating factors have the most overlap is your “Marketing Sweet Spot,” and this is what you should build your marketing material around. 

What comes next is what is called “Marketing Collateral,” which is the generic description for the various brochures, website and other materials that you use to market your business.  In this post, we are just going to focus on the elements that make up that package, not on an entire marketing plan. 

Company Overview Brochure:  Typically this comes in the form of an 11X17 half-folded brochure that provides a big picture look at the whole company.  It may include things like mission statements, vision, core values, brief history, overview of markets, etc.  It will work as the center piece for your marketing. 

Company Information:  This can be a 1-4 page insert sheet that provides basic information such as insurance, surety, contact information, etc.  It would answer most of the standard questions required to pre-qualify your company with a new client.  Part of this may be the insurance cert forms. 

Project List:  This should be a nicely formatted list that contains all the basics about projects your company has completed.  The information should include project name, size, client and a short 2-3 sentence description of the work noting anything key including finishing ahead of schedule or use of an innovative use of new construction technology.  You may want to maintain different lists for different project types so that your marketing package can be targeted to a specific market. 

References:  A simple one-page list relevant to a specific market that contains some selected quotes and reference contact information will be very effective.  This is more effective than trying to attach dozens of reference letters.  Get the letters, but summarize them into a single consistently formatted sheet. 

Resources:  If applicable to a particular market you are going after, you may want (or need) to produce a listing of the resources you have available including heavy equipment, software, accounting systems, project management and field crews. 

Project “Sell Sheets:”  These are individual sheets designed around a particular project that are heavy with pictures and provide more details about the project than the project list.  These are used as backup to augment the marketing package.  Once a template is designed, these can be built pretty easily to showcase individual projects. 

Key Personnel – Professional Résumés:  Building a professional résumé marketing piece that showcases the experience of all the key project personnel is very powerful.  These should be maintained for all personnel from superintendent through the senior management.  Your people and their collective experience is a key differentiating factor. 

Intro Letter:  Design a template of an introduction letter that can be easily modified when sending this marketing package. 

Website:  Your website should have at a minimum all the elements outlined above except formatted for the web. 

Every element of this marketing package should focus on your differentiating factors and your target market.  No matter how great your marketing looks in one area, it may be totally ineffective in another. 

Another thing to remember is that you need to simply be “Good enough” when it comes to building this package.  After a certain point, brochures don’t get shinier and résumés don’t get any better.  Set a strict time limit to producing this collateral in a first draft format and make the commitment to getting it out there. 

A future topic I’ll cover in another post will be actually putting this package into use – remember that the best marketing materials won’t do anything for your business unless you are getting them in the hands of potential clients. 

It’s More Than a Unit

Wednesday, October 1st, 2008

Wall Street and business owners like to talk in units.  Cost per unit; profit per unit; production time per unit, etc.  These are all important aspects and help us increase shareholder value.  But let’s face it – to the family that purchases a home, the startup company that hires us to build their first office or either that engages us to remodel their current one, we are selling much more than a product – we are helping them define their lives for many years.  Our job as business people is to keep track of the units and costs – but let’s not lose sight of the entire experience that we are selling.  If we can tap into the emotive part of the process and try to “think like a client” – we can increase shareholder value and build a lasting reputation.

Many of us are, by nature, what I would call realists.  “It is what it is” may be our most important catchphrase.  But the fierce competition that envelops us in this industry requires us to be more than an A to B faciltator.  Good communication with our clients means involving them in the decision-making process as much as possible.  Many production builders disguise “choice” as pre-priced “packages” and “upgrades” that leave little more than color and finish options to buyers.  This is smart business in the near commodity production home building industry.  Folks in this example are more than willing to walk down the street to the next community if they don’t like what they see or sense that the price/value equation is out of whack.  The custom guys have a similar problem – lots of capable contractors competing for a few precious clients,  different subsets of the industry and very similar end results.

That is where we must think like a client in order to differentiate ourselves.  From the initial contact through an interent search engine or referral through the final sales call – what is it that differentiates your business from Joe down the street?  If you aren’t selling merely on price, why should this client choose your firm?  If a client signs a contract with you, what is the process you offer aside from the intended project?  In other words, the Golden Rule speaks volumes in today’s (and tomorrow’s) market.  Ask yourself what experience would you appreciate during a sales call?  What information would you like to be given?  How would you like the presentation to be oriented? (Powerpoint, bound documents, etc.)  As contractors, clients are purchasing our process as much as they are the product that we deliver.  This “process” we offer has boat loads of value potential in it and will make or break our companies.  Do not be afraid to make a list of how you would like to be treated during a construction project and balance it against your clients’ perceptions and the perceptions of your staff.  To our accountants and bankers, a project is measured by units.  To our clients, the project is measured by the entire experience from the initial phone call to project completion.  The value in an excellent experience is immeasurable. 

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