430: Five Key Points To Optimize Construction Sales And Profits

This Podcast Is Episode Number 430 And It's About Five Key Points To Optimize Construction Sales And Profits Owning a construction company and being an employee requires different mindsets and attitudes or paradigms. Both positions are natural enemies and generate tension, leading to various diseases; mental, physical, emotional, and spiritual.   Construction workers live in the real world, where everything can be seen, heard, felt, tasted, and sometimes smelled. They can look around and see evidence of their activities. Their long-term time horizon in years past was two weeks, which is why most payrolls are paid every two weeks. With various check cashing and payday loan outlets, their long-term time horizon has been replaced with now and right now!   However, construction company owners like you work in a world that is intangible and imaginary, where nothing is real or solid. Nothing in this part of their world can be perceived with any of your five senses: Sight, Sound, Feel, Taste or Smell. Your long-term time horizon is between 30 days and one year, depending on the size and complexity of your construction projects. You have to make hundreds if not a thousand decisions each day with whatever limited information is available to you. As a construction company owner, you have to decide on Marketing Strategies, Accounting Strategies, and Production Strategies, or as we call it, M.A.P. Vs. P.A.M. - the construction company owner's version of "Which Came First - The Chicken or the Egg?" Each decision you make carries a different weight, and the trick is knowing which ones to delegate and which ones to focus on. For example, the decision about what markets to pursue; Residential, Commercial, Industrial, has more weight and can impact your company more than which brand of toilet paper should be used in the office restroom. The decision on which market to pursue is only the beginning. Once the decision has been made on which market to follow, you have to decide which market subset: New, Remodel, or Service & Repair. Each strategy needs very different construction workers, Caveman, Cowboy, and Shoe Salesman. Put the wrong worker in the wrong environment, and you could see for yourself what happens when a Bull gets loose in a china shop, and it is not pretty! What gets measured gets managed. These five key points are an excellent way of gaining insight into where you are now and where you would like to take your construction business. As a construction company owner, if you could only do one thing all day long that would contribute the most value, what would it be? As a construction company owner, are you continuing to upgrade your management skill sets and grooming subordinates to replace yourself to grow sales and profits? Are you, as a construction company owner, letting go of the "Fun and Easy Low Paying Tasks"....and replacing them with the "Hard, Self-Discipline Tasks" that produce results? Let's identify your annual financial goal and divide it by 2,000 hours. If you want to take home $100K a year, your time at work is worth $50 per hour ($100,000 / 2,000 Hours = $50.00 an hour). It is crucial that you do the job you are worth. Do fewer things, get better and better at them, get more results, get good at doing the high-paying work, outsource, delegate, or ignore all else.  To paraphrase Stephen Covey from his book The Seven Habits of Highly Effective People. If you struggle with some of these concepts, you are not alone. We have helped a vast number of contractors to find clarity and overcome these obstacles and, in some cases, completely turned around their construction company and helped them reach their full potential. Final thoughts Just like all forms are easy to fill out if you have all the data in a readily usable format that is accessible, what you do as a contractor is "Easy To Do" if it is something you do all of the time. As QuickBooks experts in Contractors Accounting and Contractors Bookkeeping, paperwork is our particular skill set. We know what to do! Let us help you so you can do what you do best! About The Author: Sharie DeHart, QPA, is the co-founder of Business Consulting And Accounting in Lynnwood, Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. Call 1-800-361-1770 or [email protected]