Monthly Archives: May 2011

Want To Stay Busy Or Make Money?

Earn More, Work Less, Live Life!
As a business owner, I bet you love what you do. You’re really good at doing your work with pride, integrity, and quality workmanship. If asked, you tell people you are the best at what you do and stand by your finished product and personal service. You have spent years working hard, building your company, grooming your management team, developing supervisors and foreman, training your crews, and growing your equipment fleet. You have a small list of customers who keep your company busy and provide you steady work on an ongoing basis. Your business pays your bills and often there is a little left over to buy a boat or recreation vehicle to enjoy on the weekends. Life is good as an entrepreneur and business owner.

Then the economy gets slower. Now what?
Never thinking a slow down will affect your business, you continue to do business the same way you’ve always done and hope the economy gets better. But it doesn’t and there are less jobs to bid on now. So you lower your prices to stay busy and keep your crews and equipment working. Your good old customers don’t have much new work so you venture out into new territories. Your competitors lower their prices even more and project bid lists grow from three to six to twelve to fifteen or more. The only way you can get any work now is to be ‘stupid low’ which guarantees you’ll never see any bottom-line profit for a long time in the future. So you bid more and more jobs in hopes of landing any work you can find. You start bidding on projects where you have no experience, track record, or expertise. Anything to keep your doors open, your crews busy, equipment working, and cover your overhead. Now what?

Then you finally land a few new jobs. Relief! Back to work. But within a few months, these new jobs start coming in over-budget. These projects are different than the ones you usually work on and the unfamiliar contract clauses and specifications cause you some grief. You have a tough time working with these new customers. Your crews aren’t very efficient and productivity is poor as they know there isn’t much new work for them when they finish the jobs they’re on. So it starts costing you money to finish the few projects you have going. And your paycheck is only a distant memory as you begin to feed your company to stay afloat and keep unneeded employees and managers on the payroll as you hope to land some new work some day soon. Then your lenders start calling to meet and review your monthly profit and loss statements before they renew your line of credit. And then your suppliers call to notify your monthly accounts are late, you must get them current, or you will be put on COD. Now what?

Stop! Time out! Hold Everything!
What are you doing? Why are you slowly going out of business by spending your savings and trying to keep your crews and equipment busy? How long can you survive feeding your company every month? Do you think something good will happen quickly to renew your bank account balance? Will your long time employees help pay your monthly expenses as a thank-you for keeping them busy when you are totally out of money? Will your underutilized equipment fleet be able to produce enough cash-flow to survive? It’s time to stop and take a hard look at what you are doing right now before it’s too late.

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Re-View, Re-Do & Re-New

12 Steps To Re-Vive Your Business (Part 4 of 4)
Re-Vamp | Refresh | Re-live 

10. Re-Vamp!
Every year professional teams take a hard look at their playbook. They bring in new coaches to replace the ones who didn’t develop winning plays. Even the Los Angeles Lakers are now trying a new offense instead of the triangle they have used for years. What plays do you call over and over, year after year? Have you called any new plays lately? Your management style most likely is not the best in today’s competitive marketplace to maximize the bottom-line results you want. Perhaps it’s time to RE-VAMP your field, project management, and operational systems.

Make a list of the systems and procedures you have in place which guarantee and deliver consistent results every time. Then make a list of all the problems you have experienced over the last year that has cost your company money. Then decide which problems can be solved with new plays for your team to use. For example, if you are challenged with getting paid for extra work, create a system for field changes and implement it companywide. If your employees are not being productive, challenge them to design a productivity program that increases their efficiency. If you are not achieving your project goals on a regular basis, facilitate a discussion of your team leaders and develop a system to achieve every project goal.

11. Re-Fresh!
Even winning professional teams take a break between seasons to rejuvenate. I like reading how athletes spend their time off. Most go back to their hometowns and hang out with family and friends, fish, golf, hunt, workout, do nothing, and refresh. This allows them to return to training ready to hit it even harder with renewed energy. How much time do you give yourself on a regular basis to renew?

I was speaking at a company annual convention in New Orleans earlier this year. The opening party was incredible. They had a mardi-gras parade for the group with music, jugglers, clowns, and lots of beads to throw. At the party there was a fortune teller offering advice. She approached me and asked if I wanted her ideas on my situation. She told me I needed more down time in my life. I rebutted that I play golf two or three times a week and take lots of trips with my wife. She smiled and said that sounds like work, not relaxation. She was right. I fill my down time with competitive activities or meaningful work. I rarely sit down and do nothing, read a novel at the beach, or just swim in the ocean. Wow! Stop and smell the roses. To continue building your business, take time to RE-FRESH on a regular basis. Take regular two or three day breaks to do nothing. And take a two week vacation every year. You deserve it. Plus your customers and employees will appreciate the new you too.

12. Re-Live!
Every once in a while, I dream about owning a golf course. I imagine as the owner, I will get to play golf every day, be surrounded by my golfing buddies, have lots of fun, and make money enjoying my hobby. But the fantasy becomes reality when I talk to a friend who actually owns a local golf course. He works seven days a week, sixty to eighty hours per week, is on call full time, and rarely plays any golf. Not the dream I had in mind. Are you living your dream? Is your company delivering exactly what you want it to? Why not? Never forget your dream. Write down specifically what you want your business to do for you. Next decide what you must do to turn your fantasy into reality. RE-LIVE it every day by reviewing your wish list and taking the actions required.

RE-NEW
Think like a winning coach. Stop and RE-VIEW where you have been, the results you have accomplished, and what changes you need to RE-DO your company to develop a winning team. Starting over gives you the ability to go in new directions, change what doesn’t work, and capitalize on what gives you’re the biggest return. For example, every year you decide if you’ll RE-NEW the magazine subscriptions you subscribe to or not based on which you like or give you’re the biggest bang for your buck. Do the same in your company every year. Decide which strategies, plays, and players you will RE-NEW to build a champion.

Re-View, Re-Do & Re-New

12 Steps To Re-Vive Your Business (Part 3 of 4) 
Re-Structure |  Re-Focus | Re-Build

7. Re- Structure!
Most companies use the same unwritten organizational chart for years without ever changing it. The owner is at the top of the chart and accepts most of the important roles like chief salesperson, general manager, chief estimator, and money manager. But over time, the old chart doesn’t work as business and customer demands change. For example, on a professional baseball team, the marketing manager used to be in charge of advertising on television and in the newspaper to sell tickets. Now ninety percent of marketing is done over the internet. Managing internet marketing requires a different skill and talent than the old role of marketing manager.

What outdated positions do you still have? What new positions do you need to compete today? Using the example of a professional sports teams, you should also consider changing the way you stay in touch with past customers and attracting potential customers. Your old equipment manager was a glorified mechanic. Now he needs to be fully responsible to get a return on your equipment investment plus keep everything working efficiently. The old role of an estimator was to prepare quantity take-offs and put a price on jobs. Now he must be a director of presentations, video modeling, power point slide shows, and master of negotiating complicated design-build contracts with professional engineers. The old role of general field superintendent was a pusher and problem solver. Now he has to be fully computerized to coordinate complex challenges, field scheduling, material expediting, crew productivity rates, and contract management. Perhaps it is time to RE-STRUCTURE and take a hard look at your company organizational chart, job responsibilities, and who is in charge of your operations.

8. Re-Focus!
If you’ve never played ice hockey, you’ll find it’s a hard game to follow, confusion, low scoring, and very technical. Therefore you probably would never consider buying a ticket or going to a game. To expand professional hockey into the warmer lower states in the USA, the NHL had to offer more than hockey to the non-hockey crowd. They had to realize the game they had always played in Canada, while exciting to Canadians, won’t sell tickets in the USA. They had to change their focus from hockey to entertainment.

What does your company offer or do different to attract customers to pay full price for your services? Have you changed your marketing strategy, proposal, bid presentation, image, or guarantee to gather new fans of your company? Have you changed your target market, project types, or delivery systems to expand your customer base? Trying to convince customers to hire your company using the same old bid strategy and low price methodology won’t get them to buy tickets from you at premium prices. It is time to RE-FOCUS your customer strategy and look for new customers in new markets and new project types by offering something exciting that will fill seats and get customers excited about paying your company what it’s worth.

9. Re-Build!
When the National Hockey League added the Anaheim Ducks, it quickly became one of the hottest teams in the league in merchandise sales. They had teal and purple jerseys which stood out and attracted lots of attention. But over time, they looked dated, too cute, and not tough enough for true hockey fans. So sales of their gear slowed. A few years ago, Disney sold the Ducks and the new owners who decided to change the look of the team. The fans were skeptical and said it wouldn’t work. When the new tougher black, gold, and orange jerseys were revealed, fans started buying again and the team won the Stanley Cup championship the next year. Now, merchandise sales of Ducks gear is at the top of the charts in the league.

Image isn’t the only reason the team won the cup. But it did help. The Ducks were able to change their colors, look, slogan, music, theme, and perception in the league. The new look felt like a winner and created excitement. It gave the fans a new reason to cheer and opponents a look to fear. Take a fresh look at your overall company image, logo, stationary, proposal format, communications, presentations, uniforms, trucks, job signs, office, showroom, business cards, and website. Do they create any excitement or are they old, tired, and like everyone else’s? Do they give out the right professional clean impression to your customers? Does it make your employees proud to be a part of a winning team? Does it promote technical expertise and value? Now is the right time to RE-BUILD your image. To be the best, customers must perceive you are the best.

Re-View, Re-Do & Re-New

12 Steps To Re-Vive Your Business (Part 2 of 4) 
Re-Visit | Re-Tool | Re-Finance 

4. Re-Visit!
Football teams have evolved over time. Players have become more skilled, bigger, and faster. The plays coaches called twenty years ago won’t win many games today. The great coaches have had to learn to manage their team differently if they want to continue to produce winners. Now’s the time to take a hard look at how you do business and if your current strategy is viable today. I received an email from a construction company owner asking what they could do to win more work. He stated that because of the economy, there were fewer projects to bid on, and there were often twenty or more bidders on each bid opportunity. I was shocked. What was this business owner thinking?

How can you make any money competing against twenty other companies for jobs awarded based solely on the lowest price? Obviously he had been somewhat successful in the past when work was plentiful and there was enough business for everyone. But in a tighter economy, the old strategy won’t work. He needs to change how he does business big time and RE-VISIT his business plan and what he offers customers. Offering the same things every competitor does creates no competitive advantage and no profit large enough to build wealth or a sustainable company. Is your business strategy viable in today’s marketplace? Will it build a winning company that works for you? It’s the right time to take another look at how you do business and what you can do to offer something different than your competitors.

5. Re-Tool!
The business world is getting more and more competitive. Even professional sports teams are doing whatever they can to cut out the fat. As a season ticket holder to the Anaheim Ducks hockey team, I have observed their ticket renewal process becoming super streamlined and efficient. I get an email to renew my tickets with several automatic payment plan options. No phone calls or personal contact. Everything automatic. And if I can’t attend every game, they give me the option to email my tickets to friends, sell them on their website, or donate them to charity. All with a click of the keyboard online.

What should you do to RE-TOOL how you manage your business to save money and increase efficiency? To streamline your daily business activities, perhaps you should consider using your website, technology, emails, or the internet to pay your bills, invoice customers, post shop drawings, order supplies, send proposals, market your company, track deliveries, schedule employees, communicate with customers, maintain vehicles and equipment, or invest your money.

6. Re-Finance!
The best professional sports teams usually are also the best funded and financed. A strong financial foundation gives business owners the opportunity to hire the best players, market better than their competition, try new types of business models, and take advantage of opportunities. Now is the time to take a hard look at your finances, your financial systems, and your cash equity investment. I often see small companies struggle when they don’t focus on making their numbers, have good financial controls in place, and are under funded.

By installing excellent financial software managed by an experienced accounting manager, you will take a large step towards building a better company. With these tools in place, you’ll be poised and ready to seize opportunities like finding property at a reduced price or other companies in need of a cash infusion. But if you discover you are actually cash strapped, you’ll have the financials to present to another company you may want to join forces with. By merging your company with a stronger one, the joint effort will enhance the financial viability and strength of the total entity. Keep your eyes open for strategic alliances and joint ventures that will make your operation better. Look for ways to RE-FINANCE your company via mergers and acquisitions. And seek investors who will strengthen your balance sheet to negotiate tough times.