Almost every construction company owner, president or manager is busy — they never have enough time to finish everything on their plate.
They tend to take on too many duties. They don’t delegate. And they never have enough reliable employees to help pick up the slack. They view their stacked schedules, overworked temperaments and overfatigued bodies as badges of honor.
Reality is the opposite, though. Assuming too much responsibility and carrying too much of the company’s weight on your own shoulders will only keep your company stuck where it is — with no way to improve or profit. When companies become stuck, they can’t find time enough to get out of their own way. Stuck company owners may be able to recognize they are stuck, but they have a hard time identifying how to fix their problems. It requires a different mindset and strategy to pull out of this predicament. Consider the following ways confined companies can recover, set forth on a path toward improvement, and stay away from “stuck” forever.
1. Set Top Priorities to Promote Growth
Look at your calendar, to-do list and the piles of paperwork on your desk. Are these the top priorities of a company owner whose focus is to build a successful and profitable company? Where do you spend your time? To grow and achieve bottom-line results, you should act as a valve that opens or closes opportunities to build a stronger business. Employees need an opportunity to have a stake in contributing to the success of the business, too — and you’re the person who can provide that
for them.
Don’t be afraid to rely on your employees to help carry the load. If you’re doing all the work and acting as your own assistant, that time and focus is lost on tasks, when it could have been dedicated to growth. Revisit your own priorities and the priorities of your teams to reset your strategy and company focus. If you are hesitant to hire more employees because of the cost, you may want to reconsider. Without good employees, you will stay stuck. Springing for productive, reliable employees gives you the benefit of being able to both reshape your priorities and take time to enjoy business ownership.
2. Maintain Profit-Focused Strategies & Goals
Which strategies and activities will allow your company to achieve the results you want? Focus on the tasks that will build revenue: seeking both better customers and top talent are great ways to increase your bottom line. While you’re at it, make this one of your top priorities. As a business owner, profitability is your report card and the primary indicator of your focus, leadership, management, planning and more. Many construction business owners and managers are volume-driven and task-driven instead of profit-focused.
If you focus on profit, other benefits will follow. Pursuing business development activities and finding profitable customers should be your goal to finally get your teams off the low-bid treadmill. This low-bid mindset allows random referrals or any potential or repeat customer to control your revenue stream.
Profit-focused business owners and managers know exactly what they want. To reach their financial goals, they must set and keep track of financial goals, and make achieving them a top priority. They also have precise targets and clear expectations for their people, projects, revenue and profit margins. They know
the type of customer they want to do business with.
Receiving a return on your time and energy is just as important a seeing a return on your investment in assets. If you do solid work and take risks to build your business, you deserve to make a high profit margin.
3. Know Your Overhead & Break-Even Numbers
Profit-focused owners and managers know their numbers — what it takes every day, every month and on every job to make a profit. Start with overhead. Calculate your annual break-even point. Most companies don’t reach this point until the final quarter of their fiscal year. Then pinpoint the profit you want to make above your break-even. Don’t calculate in percentages. Instead, focus your targets with numbers your people will understand and can hit. For example, if your annual overhead is $800,000 and your gross overhead and profit margin you can average on your projects for the year is 20%, then your annual sales revenue required to break even and cover all of your company overhead expenses is $4 million. Next, if your net profit goal is to make $200,000, you will need to reap $1 million in total overhead and profit for the year. With a gross margin of 20%, you will then need to do $5 million in sales to reach your total annual goal. Now, with your number more clearly defined, the target is within your aim.
4. Focus on Clear profit Targets
Winning contractors are competitive and need scoreboards to keep track of their progress as the year moves ahead.
You can’t win a basketball game
without shooting for goals and competing. You can’t win a golf match without holes and scorecards. And you can’t reach your business goals without knowing the score. Many owners are so submerged in the busyness of business — and too bogged down in the day-to-day details — to find out it’s too late to recover.
5. Get Buy-In from Management & Teams
Make sure each member of your team knows exactly what their expected results and targets are and give them updated results weekly or monthly. Having your entire team buy into a profit-focused strategy is essential to its success — and creates the added benefit of reducing the volume of your busy schedule.
Delegate duties to the employees you trust to maintain your profit-focused goals. With support and commitment from your teams, these profit-focused goals stand a stronger chance to flourish. It may benefit everyone to vocalize or formalize some goals, so that your focus is made clear to all parties. You might also consider building some of it into company culture.
Stop staying busy being stuck. Hire the right people to allow you to focus on your top priorities, and you’ll get your business to grow and always make a profit.
