Think of all the decisions you made over the last five to ten years that brought you to where you are today. Now think of all the decisions you didn't make but wish you had. Remember when you were busy signing new contracts, getting plenty of business, trying to juggle all your commitments, scheduling crews, putting out fires and doing everything you could to keep everyone happy? During this time, it was hard to do everything you wanted to do.
Many construction business owners have postponed making good critical decisions because of stress and their workload. Some of these might have included:
- Paying a subcontractor for extra work without a signed change order
- Keeping a project manager who was consistently over budget
- Putting up with a project superintendant who was always late finishing jobs
- Overlooking a foreman who didn't do the required paperwork
- Not requiring a relative to follow the same standards as all other employees
- Not replacing an estimator who didn't keep accurate job cost records
- Relying too heavily on the same customers for most of your work
- Relying on being low bidder to win most of your contracts
- Continuing to work for customers who paid slow or shopped your bid
- Allowing your accounting manager to give you reports three to six months late
- Overlooking employees who didn't follow the rules and ethical boundaries
- Not letting go of poor performers fast enough
- Not training your field workers properly
- Not investing in technology soon enough
- Not investing some of your profits into real estate
- Not taking enough time for yourself and your family
Today, my most requested speech topic is "How to get your business to work in a tough economy." During this presentation, I ask everyone to write down what they would have done differently with their business over the last five to ten years. The answers consistently describe many of the problems listed above. I call these "Do-Overs."
In sports, the coach gets to start over every season. Winning coaches look at their past records and make positive decisions about what they need to drastically change to achieve better results. If they continue to play the game the same as they did in previous seasons, they won't continue to build and win. They have to look at how they play the game, players, coaches, offense, defense, training, strategy and tactics.
But business owners don't generally get a second chance to get it right. Your long season never seems to end. Yes, you make adjustments to weather the economic storm by altering your budgets, changing a few players and looking for a few new customers. But most continue to play the game of business doing what they've always done with the same rules, plays and strategy. The only thing that changes is the competition and the level of difficulty.
Imagine it's your turn to start a new season. You are the coach of your business-you want to keep your job and make a lot of money. What should you do differently to win the business game? What tough decisions should you make? What new plays will you call? What players should you replace? Where should you play the game and how? Will you keep doing what you've always done or decide to do whatever it takes to grow your business and make a profit? Below is a list of the top "Do-Overs" I hear from the many business owners I have surveyed.
Do-Over No. 1: Invest Sooner, Not Later
When your business was busy, you didn't have enough time to look for investments. And you were growing, so most of your cash flow funded your company's growth. The snowball effect kept you excited as your business got bigger. It felt like a shot of adrenaline as you did more and more work. The more you grew, the bigger you wanted to get. Volume is addictive, so you would bid work too cheap and never missed an opportunity to grow or gain a customer. Everyone thought this gravy train would never end.
As you look back, did all that effort give you a long-term lasting return? Most businesses grow 50, 100 or 200 percent in volume. But they don't make enough to set aside any real money to invest. They spend their extra cash on more trucks and equipment, bigger homes, faster boats or generous bonuses. Some even lose large amounts of money by making poor decisions.
The best decisions business owners can make is to use their business to create investment opportunities in long-term wealth building assets. Wealth building assets include investment real estate or service businesses that produce passive income over the long haul. If you had invested as little as $10,000 a year over the past five years, you could own property today worth at least $250,000 cash flowing $25,000 to $50,000 annually. A small investment over time returns much-making no investment returns nothing.
The richest construction business owners I know own lots of investment real estate or several service businesses that complement their construction operations. If you were to do it over again, wouldn't you start investing sooner?
Do-Over No. 2: Diversify, Market and Serve Customers Sooner Rather Than Later
When business is steady, with lots of bidding opportunities coming your way, it's easy to keep busy working for a limited number of customers doing the same type of projects. This business model works during a good economy. Once you have established a few repeat customers, they continue feeding you work. You don't have to go out and find new customers. You don't have to market or sell. You don't need an updated brochure or impressive website. And you don't have to create a customer service or follow-up program. Work is easy to get-you wait for the phone to ring, pick up a set of plans and go bid the job. If you bid enough, you'll get your share.
The second most popular "Do-Over" I hear from seasoned business owners is they wish they had built