Markup & Profit

Monday, October 08, 2007


Time Management is one of the most misunderstood and most abused elements of our business lives.

There are three basic uses of time in your life. The first, and by far the most important should be the time with your family. Do you want more time with your family? Then let's look at the second use of time - Donkey work.

What is "Donkey" work? It is the time you spend chasing your tail, doing things that will not increase your bottom line, and in fact might cost you money.

Not delegating is a major problem with most contractors that I've spoken to across the country. Here is where my Cardinal Rule # 4 kicks in. You must put your ego in your pocket and trust that someone else can do a particular task as well or better than you can. Doesn't make any difference what the item is, if you can find someone else to do a given task. . . . "Delegate". Even if they can't do the task as well as you, big deal. As long as it is done adequately, that should be good enough. Too many people in this business get hung up on the idea of "we build great quality into all our jobs. That is what we are known for!" Yes, but others can provide quality work for you. "Delegate".

Delivering materials to job sites. Oh the pain of it all. Millions of dollars are wasted each day by the owner of a construction company running around delivering materials to job sites. If you are doing that, you are wasting not only your time and money, but it should be ample warning to you that you have not delegated responsibility for material procurement to someone on the job site as you should have.

And, now my favorite subject to rag on some of you about . . "Working On The Job With The Tools"! More millions are wasted here each day also. Put the tools away and run your business. The best you can ever hope for working with the tools is to make a living. Maybe, if you're young, have lots of smarts and know what you're doing, you can make a good living. Bottom line, you will never make any money. Physically you can't work enough hours, nor can you bill enough hours each week. If you are over 35, you should have all the education you need on how to build a given job. It is time now to put the tools away and run your business. A good rule of thumb for time management in a construction company is that the owner should spend 50% of their time on marketing and advertising and 50% of their time running their business.

Now I know I'm going to get some squawks from readers that don't believe this, or are convinced that they must be on the job site. So, those of you that have been to the M & P seminar, and have put your tools away, or have started to put the tools away, would you send me an e-mail and tell me what your profit picture has done since you put the tools away and started running your business? I would greatly appreciate the input. I know a bunch of you promised me in class that you would put your tools away and you have. We would love to put feedback in a future newsletter to show what happens to company profits when the owners start running their business instead of letting their business run them. Thanks for the help here.

Ok, so what is the third use of time? It is staying focused on "Making a Profit ". Everything and anything else you do in your company is "Donkey Work". No, you probably don't want to hear that, but it is true. If you are not focused on making a profit, then you are focused on "Donkey Work".

Forget about "being competitive", that is an absolute money loser. You must be profitable. Forget about delivering materials to a job, delegate. Forget about working with the tools, hire it done.

Forget about sitting in coffee shops or association meetings with your buddies. That is time you could be spending on a whole laundry list of things for your company. And last but not least, forget about "donating" your time to associations or other groups (unless it is with your family). Donate your time to your family, they are the most important "business" you have.
Do these things and watch your bottom line grow to the minimum 8% net profit.

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  • I agree with this article, running the job is not your best use of time. For example one of my key employees just got married and took a couple of weeks off. To keep our schedule I went back into the field to install fence. This time was the most stressful and unproductive time I’ve spent in a while. Sales lagged and other customers suffered. The key is to get solid employees, trust them in the job they do, and most important keep the projects coming in. Construction is not were the profits are made, sale are.

    By Blogger Chris, at 9:00 AM  

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