Set, track and monitor your targets and goals for you construction company.
Imagine coaching a basketball team without keeping score. You would put in your best players, call plays designed to outscore the opponent and hope to finish the game with more points. But without a scoreboard, you would not know if you should change your strategy, call different plays or put in different players. It would also be difficult to motivate your players.
Business is like sports in many ways. You cannot win in business if you do not track your progress. To win the game of business, you have to be under budget, ahead of the plan, make money and beat the competition. When your employees do not have goals to meet, they will not work as hard.
Establish Goals and Targets for your Construction Business
Have you established goals and specific targets for your construction business? For example, do you have written goals for your current annual sales and net profit? Less than half of all small business owners set and track annual sales and profit goals. This is like running a business without trying to make a profit.
Specific company targets might include: sales revenue, gross profit, overhead, net profit, profit growth, debt reduction, average project size, number of new customers, new market penetration, proposal-hit ratio, stockholder distributions and company value.
Before you start a project, get the estimator, project manager, field superintendent and foreman together to set overall project goals. Hold a pre-job team meeting to get everyone on the same page.
Plan the project, and develop goals, including estimated versus final profit, proposed versus final completion date, production crew hours, equipment hours, general condition costs, safe work days, call-backs or punch-list items, customer satisfaction, increased change order revenue and prompt payments. Afterward, follow up on these goals with weekly and monthly project team meetings. At the end of the project, hold a general review meeting to decide what areas need improvement, and refine your goals for the next project.
Follow the SWAT Method
You must have specific written targets for every important area of your business. Write down what you want to achieve, and use the SWAT.COM method to set your goals:
CChallenging and clear
OOn-purpose and on-target
After you establish your overall company goals, write project and individual goals that will contribute to your company’s success. For example, if you want to improve net profitability this year from $100,000 to $250,000, improvement must start with your sales focus and finish at the project level.
Specific action goals to complement this overall company net profit goal should include the following tasks: 1) Secure four new customers who will execute contracts at a minimum gross profit margin of $50,000 each during the year. 2) Implement a field productivity improvement system to increase crew effectiveness by a minimum of 10 percent, and save at least $100,000 for every $1 million in crew costs over the next year.
Incorporate goals into your company’s mindset. Your team should know their top priorities and deadlines to achieve the goals. Otherwise, they will get sidetracked by “urgent” job problems and miss the annual target.
Too often, business owners do not use a tracking system or provide feedback to their employees. Feedback will allow project teams and field crews to make strategic adjustments before it is too late. Use Monday morning team meetings to meet with your employees, and set weekly goals. Write them down, and give each team member a specific target to reach. For example, to stay on schedule for a typical week, you might set the following weekly goals: dig 500 lineal feet of pipe, complete all touch-up painting for the project, or get all outstanding change orders approved by Friday.
Also, meet with your team monthly to review progress on targets such as new customers, new contracts, sales revenue, company profit, cash flow and collections. At the project level, review the estimated final profit, job schedules, field productivity, customer satisfaction, quality, safety, general conditions and the labor and equipment budget versus actual expenses.
When you set goals, keep score, track your progress and let your team know the score on a frequent basis, you will win more games!
Click here to find out how to track your Construction Field Productivity Goal!
Use this example to develop and track your annual field productivity improvement goal:
Design and implement a productivity improvement
program within one month.