Tue, 30 October 2018
Ten activities construction business owners and leaders can engage in that are worth $1,000 per hour...or more.
Here's what you'll learn when you listen to this construction podcast from www.constructionleadingedge.com:
Ten Activities Worth $1K Per Hour or More:
#1. Selling new projects or contracts
If you can spend 8 hours estimating, selling and negotiating a new contract that will yield $8,000 in profit, that makes your time worth $1,000 per hour.
#2. Upselling existing clients
There two questions, totaling five words you can ask that will give your revenue on every project a 1% - 2% boost.
#3. Building key relationships
If you want to generate more leads (which you should), don't start with advertising or social media. Start by building your referral network.
#4. Planning your projects
Every decision on a project is going to be made at some point. You can either decide in the heat of battle, when labor and equipment costs are racking up...or you can do it in advance.
Planning is simply making decisions in advance.
You can spend 4 hours planning your work and expect to save or avoid $5,000 - $10,000 in costs, making your time worth $1,250 - $2,500 per hour.
#5. Preparing and reviewing contracts.
Don't assume just because the contract is "boilerplate" or "standard" that it's OK. You should review every contract and look at:
- Insurance requirements
- Dispute resolution terms
- Reporting requirements
- Scope of work
- Contract documents
- Owner obligations
#6. Building systems
Think of building systems as investing your time, and getting a return on time invested (ROTI).
For example: If you spend 10 hours creating a system or process that will save your company 100 hours per year, that is a good ROTI, which could make that time worth over $1,000 per hour.
#7. Hiring and Training
You could spend 3 days recruiting, interviewing and hiring for a key role (PM, superintendent, etc.) who will generate $10,000 profit per month.
That means the time spent hiring is worth $5,000 per year.
#8. Strategic Sourcing / Vendor Negotiation
I spent a couple of hours negotiating a better deal with a crushed stone supplier a few years ago. The result?
I saved $500 per day...every day.
When negotiating, I recommend giving the vendor a price target, instead of asking for their best price. Start the conversation with, "Will you take....?"
Other ideas include:
- Negotiating for free delivery service.
- Contact your insurance agent and get better rates.
- Call your credit card company and negotiate a lower interest rate.
- Negotiate a lower lease rate with your landlord in return for renewing the lease.
- Set up a commercial account with your parts supplier and negotiate a discount off retail.
- Buy fuel in bulk.
- Start with the suppliers you buy the most from and work your way down the list.
#9. Quality control
To prevent rework, punchlist issues, warranty problems, and long term risks that result in litigation, perform your own quality control inspections.
Identify key points in your projects when work gets concealed or covered up, and inspect the work to verify compliance with the contract documents.
- Inspect building subgrade before foundations are installed.
- Pre-pour inspections before concrete slabs are poured.
- Framing and rough-in inspections before insulation and drywall goes in.
- Above ceiling inspections before ceiling tile installation.
- Water testing of windows and building envelope materials.
- Roofing inspections.
I have identified mistakes and potential risks worth hundreds of thousands of dollars during quality control inspections.
What if you could spend one hour doing quality control and find an issue that would have cost $1,000? Would that be time well spent?
#10. Strategic planning
As a business owner, it is IMPERATIVE that you have a vision and direction for your business. Investing the time in your business to develop your vision, then turn that into a strategic action plan will accelerate the growth of your business.
Resources mentioned in this construction podcast:
The CONSTRUCTION BUSINESS ACCELERATOR - Maximize revenue, put financial stress and anxiety behind you and turn your business into a well-oiled machine.
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