Are You a Contractor or Subcontractor? How Does Your Outlook Drive Your Business?
Filed under: Business Growth, Profitable Growth, Top Line Growth, Uncategorized
If your business outsources work to, or does work for another business, you understand contracting and subcontracting. But no industry knows contracting better than the one that invented it: the building trades. Last week, I was invited to lead a workshop/meeting for the Master Builders Association. As part of the program, I gave this hardened group of building- trade executives, those next in line to run their family businesses, an exercise whose results reveal valuable insights for any business.
Each participant was given the following key success factors that dozens of my building-trade clients have taught me matter most. The group was asked to rank the ones they felt were most critical to master in the next two years. Here are their ranked responses which could apply to your business too!
| TO SUCCEED AS A (SUB) CONTRACTOR YOU MUST: | Ranked as most important to master in next two years |
| Produce quality work | Second |
| Have a competitive price | First |
| Complete work on time | Twelfth |
| Get paid | Sixth |
| Operate safely | Fifth |
| Increase/maintain skills | Eighth |
| Use right equipment & technology | Tenth |
| Manage money | Fourth |
| Have great project scheduling / management | Seventh |
| Have great first line supervision | Ninth |
| Sell incoming work to match available labor | Thirteenth |
| Be good at job tracking and forecasting | Eleventh |
| Be good at estimating and job costing | Third |
What conclusions can we draw from these data and the comments of the group?
The (sub) contracting business remains a tough one where providing top quality at a competitive price is the key success factor.
- Managing projects, materials and labor is perceived as the next most important factor.
- The group is concerned that subcontractors who don’t manage these key skills will likely go out of business in the face of reduced project-funding sources and increased competition.
- In the face of government cutbacks, the sector is counting on private projects to take up the slack.
- The group understands that differentiated skills and services, like value-engineered solutions and LEED certifications produce better margins. Although they are hard to develop and protect from copycat competitors, new products, markets and technologies have historically ensured profitable growth for the industry.
My thanks to Brett Pitcairn of PJ Dick Construction and Jon O’Brien of the MBA for giving me the opportunity to present to the Master Builders Association.
5 Reasons to Believe in Your Business Confidence
Filed under: Business Growth, Profitable Growth, Top Line Growth, Uncategorized
What a time we’re living through! The economy is rebounding but shaky. Government’s broke and may—at best—repair its own damage. Our human, physical and social infrastructure is fractured, while America’s endless infighting continues despite real enemies lurking in the shadows. Is it too late? No! The last six months gives me great optimism for small business. Why?
Small business is growing confident again. As the saying goes, “What doesn’t kill you makes you strong.” After enduring years of scarce capital, government meddling, society demanding and large companies bullying, small business is adapting and regaining its mojo. Proof? Beyond the national data, every client, owner and audience I’m seeing is hiring, investing or at least thinking again in terms of years and not months. And after years of turning a blind eye, government, non-profits and large companies smell small-business’ success and are demanding more charity and favors.
Why are small businesses doing better? Here are five reasons why small business has regained confidence and conviction. Successful small businesses see their:
1. Worst fears are over, and they are better off. Small businesses have learned to run on lower credit lines and not to finance their customers. More and more are raising prices on unprofitable customers. The days of sloppy pricing and 90+ days of average accounts receivable are over.
2. Margins have grown when they sell expertise and a better customer experience. Small business can’t out save their competitors on purchased materials or hiring cheaper. They’ve learned to sell their expertise and the experience they provide their customers. Those who are doing this well are raising their prices.
3. Customer’ buying behavior is changing. Most companies have changed how they are buying or their criteria for buying. Most feet-on-the street sales people have learned to sell their smarts or face selling to voice mail.
4. Services grow, particularly as they support products. Buyers may demand low prices on the products they purchase, but the users they represent are demanding more service and support. Small businesses are learning to charge more and profit on their time and value.
5. The folly of doing good without doing well. Being green, sustainable and socially responsible is common sense but is no substitute for exchanging real value for a customer’s real money. The new economy is no place for businesses without a clear value proposition to rely on social entrepreneurism to replace paying customers.
So much is changing so fast for small business. But following these five reasons for success will lead to your business being much better off regardless of the world around you.
