The strong construction economy has increased workloads and quickened the pace at which projects must be completed. And with more work comes more stress, decisions, commitments and mistakes. It also requires the use of more company resources, improved time management skills and the ability to plan for your company’s future.
Facing the problems of a busy work schedule, the important questions are:
- Has the additional workload increased your bottom line?
- Are you getting the results you want?
- Are you allowing time to plan, alter or improve your course toward higher margins?
- Are you working too hard to justify a profit?
When you started your business, you designed it and its processes to operate within a certain threshold and deliver results based on that threshold and the scope of work on a given project. You had goals in place, but as your business grew at a faster pace, you became bogged down, encountered challenges and likely postponed those plans for improvement.
In cases like this, some common growth problems include profit margin shrinkage, overlooked bid items, inadequate supervision or manpower, lack of financial resources, issues with cash flow, mark-up too low to pay for additional overhead and lack of productivity.
In a boat without a rudder, nature’s elements will take control of your course. Likewise, if you follow a hot economy, pushing your unprepared business into a faster pace and heavier workload, you lose control of your own success.
Evaluate Your Pace
Your main goal is to build a business that delivers high return on investment for your time, energy, people and money. When you’re working too hard, you don’t have time to recognize that your numbers are suffering until it’s too late. Being too busy forces you to keep doing what you’ve always done, while hoping for better results—the very definition of insanity. When you’re too busy, you don’t have time to improve your operations, and when great opportunities come along, you cannot fit them into your schedule.
Remember Your Vision
The owner acts as supervisor—in charge of every decision, contract, customer conversation, price, purchase, delivery and scheduling—fully in control of every moving part of the business. He/she is out on jobsites almost every day and performs a lot of the work him/herself, with the help of a few other employees. The owner is the company, without whom, there is no business.
As a small business owner does excellent work, they get more referrals, customers and jobs. With more referrals, the company continues to grow, which requires renting a small shop or office, then, hiring a field foreman, more field workers and a part-time office assistant to help with paperwork and pay the bills.
At this point, the owner is still the estimator, salesman, project manager and general field superintendent, making every decision, signing checks and overseeing each transaction, customer, contact, purchase, proposal, invoice, subcontractor and employee.
With more success, comes more work. With that, a junior project manager or estimator and a full-time administrator are hired to handle more of the workload. Now, as a boss and micromanager, the owner becomes frustrated with employees not completing tasks correctly.
Cash flow is tight, and the majority of time is spent chasing a small amount of money compared to all the effort. The pressure of owning and running an overly-busy organization is too much for the owner, who is not achieving the company vision and does not see how the business will ever work.
Most small business owners stay stuck at this level—too busy just staying afloat to find any time for improvement.
Achieve Higher Margins
A business that continues to grow without higher margins can’t meet the goals, needs and wants of a driven entrepreneur. When you get frustrated with having nothing to show for so much work, you begin to hate going in because of all the stress and pressure.
To take control and build a better business, you must stop being too busy and focus your energy on owning the company instead of supervising it. Organize your company so that it will operate without your constant micromanagement, and you can stop chasing after low-margin work.
5 Steps to Better Business
With the following steps, you can begin to build a better business and free yourself to enjoy the success you set out to create.
- Refocus on what you want—Stop and remember your original dream of owning a profitable, growing company that achieves your vision and goals, is organized, has loyal customers, is run by your empowered management team and gives you freedom and time to enjoy your life. Realize that this is still achievable.
- Recognize that you are a business builder—Are you too busy working to make any money? To grow, you’ve got to let go, delegate and do what you do best. Growth starts with customers who want what you sell. You must make time to go out and build relationships with loyal customers, while also finding new ones.
- Implement systems—In order to delegate to your team, you need written systems and procedures in place that don’t rely on you dictating and directing every move and decision. Put your standards on paper and train your people to follow them. Systems allow you to get out of supervising and doing work that shouldn’t be your responsibility, creating time to make building the business your top priority.
- Hire the best—Now that you have systems in place, you can start to build a strong management team prepared to take your company to the next level. Good people with well-drawn systems to follow do not require your constant supervision.
- Enjoy the ride—With your company organized and growing, you can focus on creating more opportunities for your business to prosper.
To get your company back on track, you must make the decision to change how you manage your business. Delegate more responsibility to key managers and supervisors. As they stop relying on you to make their decisions, they will see the company’s potential and get excited about their new roles and responsibilities. To increase your net profit, invest in operational systems and start a training program.
With the improvement process moving forward, you will gain more time to meet with existing and new customers, enjoying operating as the owner, rather than as the entire business.