Like everything else in your business, the answer to that question is up to you. This week we'll be taking a closer look at SOPs and discussing the specifics of what you could choose to include in your company's standard operating procedures.

Why building a successful construction business requires having a plan. Over the past few weeks, we’ve discussed how building your business is critical to the success of your business and the importance of keeping your business in balance. After more than forty years of construction experience, I tend to view most things from a “building perspective". Today we’re going to compare once again building a business and a construction project. One of the most important parts of the plan for building a good building has nothing to do with physical construction. It has to do with processes and systems.

So, if it’s worth it…why is it not done?

You probably guessed it already; this week’s topic is COMMUNICATION and the all-too-common lack of it. Because poor communication is such a big issue, I’ve written about it a lot.

In a production meeting with a customer yesterday I was once again reminded of the importance of clear communication and…the lack of it.

It’s amazing how things become clear with a limited amount of time. What is productivity? Now there’s a question for you to answer. We have a limited amount of time in a day, a year, or a life. Productivity generally refers to the ability of an individual, team, or organization to work efficiently within that time in order to maximize output.

It’s hard to keep your business in balance without a plan. Most of us who are self-employed spend way too much time feeling like our businesses are out of control. We started our businesses with grand ideas and dreams. Then one day we woke up and wondered what in the world we were thinking. I recently finished reading the E-Myth Revisited by Michael Gerber. As I read through the book I was reminded and encouraged to review and improve our business and the operating procedures. If we don’t have a plan and aren’t intentional about implementing it, we are doomed to failure. Business is like a three-legged table. If one leg is short, it gets kind of wobbly.

Like the construction of a building – you need a plan for your company.

If you own your own business and aren’t being intentional about the organizational operation of your company, it is likely that you won’t make it past your 5th year. This is according to the Bureau of Labor Statistics.

Starting a business without a plan is not a very good plan.

Learning about business tools isn’t necessarily fun, but it is necessary for business success. I found that out the hard way! Last week we went through the process of getting started with a blank Payment Application and getting it filled out so that it is ready for the customer’s first payment. Now let’s look at preparing the Payment Application for recurring progress payments so that our customers know exactly what they are paying for with each invoice we hand them.

This is one of the most important tools in the construction Business BUILDing Toolbox. Communication between construction companies and customers is one of the biggest problems in the construction industry. The Payment Application is a business tool used for tracking project progress payments. It’s a way to communicate the financial expectations to the customer…and it’s only fair to let them know what to expect, when they’re the ones writing the check. Construction customers don’t like surprises.

This tool helps the construction companies see their cash flow ahead of time. Concerns about cash flow is one of the biggest struggles construction companies and contractors face — and for good reason. These businesses typically lay out large amounts of money for project-related expenses. Waiting to get paid until the job is complete is a sure way for a company to go out of business. An alternative approach is for businesses to be paid when predefined stages or percentages of a project are complete, a model called “progress payments.” Progress payments benefit all parties involved.

If so many issues come from not doing change orders, why are they not done?

A Proposed Change Order is another very important tool that should be in the business toolbox of every construction company. However, it’s probably used less than almost any other business tool. Its lack of use causes as many, or even more, problems than any other tool.

If it’s that important, why is it not used?

We’ve discussed multiple times the reasons for doing Proposals for construction projects and the importance of communication with construction customers.

Proposed Change Orders are just as important.