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Make sure your company not only survives, but thrives with essential business management guidance from a pro with 25 years' success.
Only 43% of construction firms are still in business after four years. Make sure your company thrives with essential - and very readable - guidance from a pro with 25 years' success. Find out what it takes to build all aspects of a business that's profitable, enjoyable, and enduring.
Here are just a few of the things you'll learn from this book:
- The duties of the owner of a successful construction business.
- Essential terms and conditions to include and exclude in contracts.
- Commandments to follow to ensure you're paid what you're owed, including step-by-step change-order procedures to avoid disputes and non-payment.
- Strict do's and don'ts of mechanics' liens - including when an owner goes bankrupt.
- What must be done administratively before breaking ground on every project.
- How to select, hire, and keep "golden" employees.
- Ways you can target, check-out, land, and retain profitable customers.
- Effective marketing even the smallest contractor can afford.
- How to identify the accountants, lawyers, and insurance agents that are right for you.
- The What, When, Where, and Why of licensing and registration.
- The advantages of specializing, including the opportunities in chain store construction.
- More than 40 construction, government, and other valuable online resources.
Whether you're a contractor, a key employee, a subcontractor, a student, or a facility executive, you'll find many ideas you can immediately add to your management and leadership toolbox. Adopting even a single one of them will pay dividends now and throughout your career.
From the Preface
What you can learn from this book
Most general contracting firms start small - formed by smart and ambitious construction project managers, executives, tradesmen, and occasionally even students right out of construction training. But as accomplished as they may be at what they've been doing they are not likely prepared to take on the range of responsibilities forced on them in managing the business of construction in its entirety. I believe this is the primary reason for the high four-year failure rate that start-up contractors in the United States face. According to research published by the Office of Employment and Unemployment Statistics, US Bureau of Labor, by Amy E Knaup, only about 43 percent of US construction firms that started up in the second quarter of 1998 were still in business four years later.
A contractor or someone planning to become one can better these odds by identifying and managing the elements of risk. This book offers that opportunity. It is based on the things I've learned, used, and refined as a commercial general contractor in the course of starting and operating my own construction firm for 25 years. It spreads these tools and the reasoning behind them out on the table, makes suggestions for their use, and offers a proven business philosophy - knowledge a contractor can set in place from day one to put his construction business on a level playing field with the best-run companies. The information presented here is born of missteps as well as best steps, and both are instructive in building a business that is profitable, enjoyable, and enduring.
My guiding theme in planning and writing this book has primarily been to make available in one place as much as possible of what I learned the hard way (due to not knowing enough in the beginning about running a business despite having an engineering degree and several years' experience on the project-owner side of construction) so that interested readers may minimize the pain and risk that rush to fill the knowledge void. Of course, not all risk can be eliminated in construction or in any field, but that risk certainly can be managed if its elements are identified and understood.
Secondly, this book also makes the case for niche contracting, especially chain store and other light-commercial construction. Niche contracting, or specialization, is a strategy that allows a contractor to become more knowledgeable in a field, be seen as an insider, perhaps sought after, more profitable, and better satisfied with his place in construction. These chain store characteristics practically beg the innovative general contractor to focus on chain store construction. It is my experience that the bid lists are shorter, profit margins higher, negotiated work more common, and owner-contractor working relationships a lot better than are usually found in the open-bid private or public work in which bid error is often the factor that determines the bid-winning contractor. (Note that I did not say determines the "successful" contractor.)
The business management principles and techniques presented throughout this book apply to light-commercial building contractors, subcontractors, and to owners of any small business, regardless of industry.
Here are some of the specific issues discussed in this book:
- How to know whether you're cut out to own and run your own business.
- What you must know and do as the owner of your construction firm.
- The clear advantages of specializing within general contracting.
- Ways you can target, check-out, land, and retain profitable customers (the lifeblood of your company).
- How to select, hire and keep golden employees (the heart).
- Terms and conditions to include in your bids and your contracts with owners to reduce the chance of disputes and misunderstandings.
- Commandments you must follow to best endure that you will be paid what you are owed, including step-by-step change-order procedures necessary to avoid disputes and nonpayment.
- The strict do's and don'ts of mechanics' liens.
- The What, When, Where, and Why of licensing and registration and the extreme risk you take if you ignore the rules.
- Terms detrimental to contractors that are often present in owner-prepared construction agreements.
- Subcontract terms and conditions most likely to result in best outcomes.
- What must be done administratively before you break ground on a project.
- Proactive selection and use of accountants, lawyers, and insurance agents to steer you through the minefields in their areas of knowledge.
- The common, sometimes fatal judgement errors contractors make, often during their most profitable times.
- The potentially ruinous pitfalls to avoid in insurance coverage.
- Why a strong reading habit is so important to your success.
- The personal philosophy and attitude required for success in construction.
- Corporate organization and administrative methods.
- Links to useful construction, government and other resources online.
- The supreme importance of the human factor, as seen most clearly in chapters exclusively devoted to describing the contractor's role as owner of his firm, selecting and keeping the right employees, marketing, creating customer loyalty, assessing the required personal characteristics contractors must possess, and selecting the right outside professionals.
This book is sprinkled with personal anecdotes wherever they can be used to strengthen a point and with pertinent quotes by recognized leaders.
Whether you're a contractor or a key employee, a subcontractor, student or even a chain store executive or businessman in an entirely different field, I promise that you will find ideas, techniques, and principles you can transfer immediately to your management and leadership toolbox. Adopting even a single one of them will pay dividends now and for the remainder of your career.
Contents
Preface. Acknowledgements. Chapter 1: Do you have what it takes? Chapter 2: Your role as owner of your construction firm. Chapter 3: Sales, marketing and business development. Chapter 4: Creating customer loyalty. Chapter 5: Business considerations. Chapter 6: Controlling your finances. Chapter 7: Bidding. Chapter 8: Building it. Chapter 9: Accounting and record keeping. Chapter 10: Contract terms and conditions. Chapter 11: You and your employees. Chapter 12: You and your subcontractors. Chapter 13: Banking and finance. Chapter 14: Insurance and bonds. Chapter 15: Specializing in chain store construction. Appendix 1: If you're just getting started . . . Appendix 2: Useful Web site links. Appendix 3: Regional cross reference of construction-related organizations. Appendix 4: Potential questions for interviewing job applicants. Glossary. References. Index. |
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