Category Archives: business strategies

Draft A Winning Playbook!

I played a lot of touch football when I was around ten years old. Eight of us boys from the neighborhood would gather at our local park and choose teams. Then the two teams would line up across from each other, agree on the rules, and get ready to start the game. After a coin toss, one team would kick off to their opponent. The receiving team would have their fastest player catch the ball and run down the field as far as he could without being tackled. A tackle occurred when the defensive player touched the runner with two hands below the waist.

Then the offensive team huddled to decide their offensive play for the next down. The quarterback usually called the plays, even though he wasn’t always the smartest player on the team. He was usually the one who was the tallest, fastest, or had the best arm. Obviously, there wasn’t a playbook nor did the teams have time to practice their game plan. Before each down, the inexperienced quarterback gathered his team in a huddle and called plays based on what he thought would work and surprise the opponent. The players were also loosely told what position to play, who would run which way, who’s job it was to block, and where they were to go. Not a very good strategy for a winning outcome.

Are you better than a 10 year old?
Think about your company. Is your business strategy better than a neighborhood pickup football game? Do you huddle up before every decision? Do you tell your players what to do before every project? Do they know what to do based on written systems and strategies from your company playbook? A professional football team is a good model to copy for small business owners. Professional teams have a written strategies for every season and each game. They also have written plays designed to work in every situation they encounter. Do you?

Unless you want to run your company like a young inexperienced quarterback, you need a winning playbook to follow. Thinking like a professional sports team, what needs to be in your company’s business plan?

1. Overall company mission, vision and values
2. Coaching and staff assignments and responsibilities
3. List of players and their strengths & weaknesses
4. Training program
5. Equipment inventory management
6. Offensive plays and strategy
7. Defensive plays and strategy
8. Business development plays
9. Financial plays and strategy

Draft your business playbook!
A professional team must have all their bases covered to put a winning team on the field plus make as much money as possible. Where should you start to draft a winning game plan?

1. Determine your overall company mission, vision and values
Sit down with your key managers and take time to discuss why you are business and what’s the purpose for owning your company? This exercise will get you focused on the real reason you go to work every day. I often ask business owners why they are in business. They answer: ‘to make money doing whatever they do like plumbing or construction.’ You are not in business to do plumbing or construction. You are in business to maximize your resources of time, energy and money so you can get the biggest return in whatever manner you desire.

For example, a construction company is a great start to achieve what you want. It is very rewarding but demanding work. But, it is limited in net profit margin potential as it is very cyclical with thin margins. In my opinion, a construction company creates an excellent opportunity to seek opportunities to build wealth versus just building for others. When you build for customers, that allows you to make some money. When you build for yourself, that allows for passive income, freedom, and equity growth. What is your overall company mission, vision and values? Continue reading

Hire the Right Players Now!

If you were the owner of a NBA basketball team, one of your top goals would be to have the best players on your team. With only five players on the court at any one time, every one of them is critical to winning. If you don’t do a good job hiring the right players, your team won’t win many games. And eventually the fans will stop coming out and spending their money on tickets. In other words, the success of your winning team is to have the right players on the floor at all times.

Business owners tell me they can’t find any good help. But how much time do they actually spend finding the right players? What you get is a direct result of your priorities. When you don’t take enough time to find, cultivate, and train new players, how do you expect to grow a winning team? Professional sports teams have a full time executive in charge of player personnel – finding the right players, managing their contracts, and keeping them happy. But most small companies don’t spend more than a few hours a year making sure their roster is balanced, robust, and excellent.

Before the annual draft, every professional sports coaching staff makes a list of all the positions and their current players to analyze what they need to change or add to improve. In your company, the draft is now. To get started, make a list of all of your company positions, the talents required at each job, the player currently assigned each position, and then rank how well you think they are doing.

Player Personnel Ranking Chart
Position Talent Required Player Ranking

  • Estimator Knows accurate costs Jim B C+
  • Completes bids on-time Jim B A-
  • Maximizes sub-bid coverage Jim B B-
  • Presents company well Jim B B
  • Project Manager Manages budget Bill C+
  • Maximizes change orders Bill B
  • Keeps customer happy Bill A
  • Paperwork on-time Bill B-
  • Superintendent Finishes jobs on-time Dave A
  • Pushes crews to the max Dave B+
  • Safe jobsite and no accidents Dave C-
  • Coordinates subcontractors Dave B-
  • Foreman Manages crews and jobsite Sam B-
  • Brings jobs in under budget Sam C
  • Knows how to build quality Sam A
  • Follows company procedures Sam C-
  • Carpenter Can build per plans Joe A-
  • Hustles & works efficiently Joe B
  • Takes initiative & action Joe B-
  • Team Player & good attitude Joe D
  • Office Manager Completes tasks on-time Sue B-
  • Understands accounting Sue C+
  • Understands construction Sue B+
  • Team player & good attitude Sue A Continue reading

5 ‘Must Do’ New Year Resolutions!

It is almost 1 month into 2012 and things are already moving too fast. Hopefully you took a few moments and wrote out your goals for the next 12 months. Written targets and goals will insure you get what you want by keeping you focused. Less than 20% of all business owners actually write out their goals. And guess what? These top 20% are in the top 20% of the most successful business owners in their marketplace. A simple way to start is to write out these 5 goals:

1. Don’t be an island! 
Get involved with a group of like-minded business owners to seek advice, share challenges, get invigorated, and get accountable with on a regular basis. Personally, I made a decision to join a structured weekly group of men who discuss their personal and professional lives facilitated by a top business/life coach in our area. Consider looking into joining one of our BIZ-GROUPS or a local group in your area. Bottom-line – do it!

2. Take time to plan your plays!

Bill gates said that the best thing he did while building Microsoft was to take his management team away on a regular basis to plan for the future. At these regular retreats they discussed their strategy, options, new opportunities, what’s working, what’s not, and what they need to do to achieve their goals. When you don’t plan your future, you get what the market gives you instead of paving your own path.

3. Innovate or die!
Your business won’t work doing what you did when the economy was growing. In a flat economy, you have to change your business and evolve into a new kind of profit making machine. What new customers, markets, systems, technology, people, production methods, contract type, services, and products should you add or delete from your business to grow fast. Sit down and rate every part of your business as: keep doing, stop doing, start doing, or change how we do it.

4. Revamp your calendar!
Your calendar says it all. If you want to save money, your calendar is full of job meetings, ordering materials, scheduling crews, and doing take-offs. If you are focused on making money, it’s full of time with loyal customers, new customer targets, networking, mingling with potential customers, and building relationships. At least 33% of your time needs to be with customers having fun and enjoying each other. Make it your goal to revamp your calendar and pro-actively grow your business.

5. Put yourself first!
When I coach business owners, we always look at the income statements to see how they are doing. I almost always notice that business owner pay themselves way too little for the time, risk, and work they perform. In addition, their investments are often slim or none. When you put other people, employees, and customers ahead of yourself, you can’t do the best you are capable of. Customers want to do business with successful people, not poor struggling people. Make a commitment to pay yourself what you are worth and start an investment program starting now. Then spend the rest on overhead and expenses.

Do-Over #2: Diversify, Market & Serve Customers Sooner Than Later!

When business is steady with lots of bidding opportunities coming your way, it’s easy to keep busy working for a limited number of customers doing the same type of projects. This business model works during a good economy. Once you establish a few repeat customers, they continue to feed you work to bid on. You don’t have to go out and find new customers. You don’t have to market or sell. You don’t need an updated brochure or impressive website. And you don’t have to have a customer service or follow-up program. Work is easy to get: wait for the phone to ring, pick up a set of plans, and go bid the job. If you bid enough, you’ll get your share.

The second most popular “Do-Over” I hear from seasoned business owners is they wish they would have built up a broader base of customers, worked on many different type of projects, and developed a solid marketing and referral program that delivered diversified types of profitable work. Today I hear sad stories of underground contractors who kept very busy only doing private housing tracts for a few homebuilders. I also hear similar stories from contractors who didn’t want to mess with government jobs because of all the added paperwork. And I hear stories from companies who didn’t add any extra services like green technology, design-build, post construction services, or maintenance to attract and keep customers. These companies are now left without any customers. Continue reading

The Business Do Over!

In sports, the coach gets to start over every season. Winning coaches look at their past records and make positive decisions of what they need to drastically change and achieve better results. If they continue to play the game the same as they did last several seasons, they won’t continue to build and win. They have to look at how they play the game, players, coaches, methods, offense and defense, training, strategy, and tactics.

Now imagine it’s your turn to start a new season. You are the coach of your business and want to keep your job and make a lot of money for the owners. What should you do differently to win the game of business? What tough decisions should you make? What new plays will you call? What players should you replace? Where should you play the game and how? Will you keep doing what you’ve always done or decide to do whatever it takes to grow your business and make a profit? Below is the list of the top “Do-Overs” I hear from the many business owners I have surveyed.

Do-Over # 1: Invest Sooner Than Later!
When your business was busy, you didn’t have enough time to stop and look for investments. And you were growing, so most all of your cash-flow went to fund your company’s growth. The snowball effect was keeping you excited as your business got bigger and bigger. It was like a shot of adrenaline as you did more and more work. The more you grew, the bigger you wanted to get. Volume is addictive, so you bid work too cheap and never missed an opportunity to grow or gain a customer. Everyone thought this gravy train would never end. Continue reading

If You Could Start Over, What Would You Do Different?

Think of all the decisions you made over the last five to ten years that affected your future and where you are today. Now think of all those decisions you didn’t make you wish you had. Remember when you were busy signing new contracts, getting plenty of business, trying to juggle all your commitments, scheduling crews, putting out fires, and doing everything you could to keep everyone happy? During this time it was hard to do everything you wanted to do. Continue reading

What Is Your Bidding Strategy?

After you have established reasons why customers should hire your company, now it’s time to find jobs to bid where you can be successful. Your overall estimating and bidding strategy is to get enough signed contracts at your price to cover your job costs, overhead, and then make a profit. This requires several winning plans. The first strategy is to have a strategy! Many contractors bid any job they are offered to bid. They don’t have a strategy that helps them decide which jobs to bid and when to say no. What’s your estimating and bidding strategy?

Before agreeing to bid a project, create a list of questions to determine if you will have an excellent chance to win the contract.

 1. Do you want to negotiate the project?
– How will you convince the customer to negotiate with you?

2. Do you want to be the select or only bidder?
– How will you implement this strategy?

3. Do you want to get the last look?
– How will you make this happen?

4. Do you know your bid-success ratio against your competitors?
– How do you keep track of your success versus competitors?

5. Do you have competitors you don’t want to compete against?
– How will you discover this information?

6. Do you have some competitors you will bid against?
– How will insure the bid list gives you a chance to be awarded a contract?

7. Do you have an ideal number of bidders you’ll bid against?
– How will you insure this happens?

8. Do you have a maximum number of bidders you’ll bid against?
 – How will you decide when not to bid a job? Continue reading

Do your customers want more?

Joseph owns a residential landscape company doing new installations for homeowners. He mainly works on referrals from custom home-builders, architects, and past customers. Sometimes his company is busy and other times he waits for the phone to ring. By chance he was asked to do some hauling for one of his contractor customers. In the past he didn’t pursue this type of business because is was a nuisance and disrupted his operations. But this got him thinking about how he could expand his revenue sources.

Joseph decided to set up a new division that focuses on service work. He moved his chief estimator into the role of division manager to build the customer base, added a service manager, and put a bookkeeper in charge of managing the accounts. He started by asking his customers what other type of services they needed on an ongoing basis. His homeowner customers trusted his company, liked their work, and actually wanted his company to provide more ongoing maintenance for them as well. They asked for weekly lawn and garden service, annual weed removal, yearly tree-trimming, winterization service, and annual irrigation repairs. Some of his customers owned pools and also wanted his company to do their pool service, maintenance, and repairs. Some customers had young children and wanted swing sets and playground equipment installed. Some wanted new barbeques installed, fencing added, stables for their horses built, cages for their pets, and patio covers added. Some customers asked him if he installed annual holiday lights as well. Some customers even wanted his company to offer debris and junk removal and hauling. WOW! All that business and Joseph hadn’t even thought about providing it for his customers. Continue reading

The 8 Traits Of Great Companies! Traits 5 through 8

Competition | Pro-active Sales | Operational Systems | Investments
Part 3

Trait #5 – Set your company apart from your competition!
When I drive down the freeway and see contractors’ trucks, they often have signs on like: “Joe’s Electric – Commercial, Industrial & Residential.” I chuckle and ask myself: “What do they excel at, what kind of jobs are they the expert in, and why should I hire them?” Based on my experience working with tens of thousands of contractors, my best guess is they chase any kind of work they can get and don’t make a lot of money doing it.

Are you in the “Yes” Business taking any kind of job or project thrown your way? Experience shows that companies who specialize in a specific type of project or service do better work, are more competitive, have more loyal customers, and make a lot more money than their “jack of all trades” competitors. Perceived experts are the first called when a customer needs a professional to complete a tough or special project. Experts get the first chance to propose on jobs which require complex engineering or technical knowledge.

To set your company apart from your competition and get hired at higher prices, you must be the perceived expert in your market and offer more than your competitors. According to a survey from the Society of Marketing Professional Services (a national association of construction sales and marketing professionals), the top two reasons construction companies don’t get awarded projects are 1) Their inability to market and properly present the differences between themselves and their competition, and 2) Their lack of expertise in a particular project or service niche. When you continue to be and do everything for everyone, you won’t have enough time to satisfy your customers and you can’t make enough money for all the different types of work you attempt to complete. Continue reading

The 8 Traits Of Great Companies!

Earn More, Work Less, Live Life!

Good news! Now is the best time you’ll ever have to take a hard look at how your company does business. Why wait? When you start a company, you’re happy getting some work and making a little money. Then it grows into the company it is today by doing what it does relatively well for the few customers it has acquired. As an expert on entrepreneurial companies, I can tell you this is not the right way to design and build a great company that maximizes its’ potential market share, resources, people, and bottom-line profits.

When studying market-leading companies, you’ll find they have eight traits that make them stand out and stay at the top of their field. Make a list of top companies who are leaders in their marketplace. Your list might include: Apple, Caterpillar, Wal-Mart, Microsoft, McDonalds, Ritz Carlton, BMW, FedEx, Forbes, Star-Bucks, or Google. What sets them apart from the rest of their competitors and allows them to continually maintain market share, growth, and profitability?

Owning a company that offers the same basic services or products as most of your direct competitors will keep you busy during good economic times. But as the economy struggles or shrinks, business becomes more difficult, harder to grow, and make a profit. Especially when you offer almost exactly the same thing as most every other company you compete against. In order for your company to become the leader in your marketplace, you have to offer something unique or different than your competitors do. You also have to be passionate about your vision and where your company to go. You need organized systems and a professional management team that consistently delivers the same results for your customers every time. And you must be clearly focused on hitting your targets, goals and financial numbers. With these characteristics, your company will make an above average profit margin and have extra funds leftover to invest in wealth building opportunities.

IS YOUR COMPANY GREAT?
Take this True / False Test to determine if your company has the eight traits of great companies.

1. Our company has a written passionate vision that is prominently displayed for all of our customers and employees to see. Every manager and employee knows exactly what the company stands for, its’ values, and where it’s going.

2. Our company has written targets and goals for the overall operations, each department, and every project. These goals are tracked every month so adjustments can be made quickly.

3. Our company has a structured organizational chart clearly describing the accountabilities and responsibilities for each position in the company. Every employee knows exactly what they’re responsible to do and is fully accountable to make it happen.

4. Our company owners and managers are focused on achieving the numbers required for the company to hit its’ financial targets and goals. Our company makes a very large profit compared to the industry average and our competitors.

5. Our company has a unique or different delivery system, product, or service that attracts customers who will pay more to buy from our company than our competitors.

6. Our company has an ongoing, systemized, and pro-active sales and marketing program to find, contact, attract, retain, and service our customers. Our sales and marketing system has allowed our company to grow at least fifteen to twenty percent, or more per year.

7. Our company has written operational systems and procedures for all employees to follow that insure all workflow is completed in a similar standardized manner by all employees without exception.

8. Our company’s bottom-line delivers significant excess profits that allow us to seek investments and find opportunities to grow and build our equity and wealth. Continue reading