Hardhat Hedlines

FLAT Is The New Normal!

George Hedley — Tue, 06 Apr 2010 13:09:19 -0700

I just spoke at the Replacement Contractors annual convention and listened to Hanley Wood’s economic forecast.” Their gurus think tht the slow economic conditions in the construction industry will stay flat for several years. They predicted we will not reach the former 2005 levels until 2015 or 2017. With that real news, what will you do? The new normal is FLAT! It’s finally time to look in the mirror and decide what to do about your future. You can’t wait for another five to seven years to make some major changes in how you do business. The old normal doesn’t work. No it takes a different approach to how you run your business. Service work is good now as it provides steady income to help your cash-flow and bottom-line. Bid work is impossible to make enough money doing. Value-added work is the only type of growth opportunity. Where will the new flat economy take you? Or will you decide to get on with a new road to success? Update: I sold my office building and we are in the process of moving to our new headquarters at 3300 Irvine Ave #135, Newport Beach, CA 92660.

Growing a Business - More gain, less pain!

George Hedley — Tue, 06 Apr 2010 13:06:35 -0700

Well these next three months will be hectic for me. It’s amazing how an ongoing proactive marketing system does work, even in slow times. I have 23 speaking programs to present in February and March (the most ever for this time of year). I just sold my office building, will be looking for new space and then moving our office. I am completing a webinar program on “How To Win More Customers and Contracts.” Plus I just started a more comprehensive marketing campaign for my Construction Consulting business which I anticipate will boom during the up tick in the economy. And I am trying to have a little fun time to enjoy the moment. With all the things to do, I have committed to improving my golf game again starting in March. I also started a workout program after extensive tests from my doctors. All is good and I have a clean bill of health. I am doing Pilates, I have a trainer, and I am doing cardio. WOW!

What have you done to grow your business? What will you do to grow your business this year? What are you doing about having more fun? I hope 2010 is your year to WIN. It all starts with positive change and movement towards achieving what you want. I hope to see you on the road over the next few months. If I can help you or your company with strategic planning, coaching or speaking, give me an email to start the process.

7 Tough Questions To Win In January 2010

George Hedley — Tue, 06 Apr 2010 13:00:44 -0700

1. Should You Spend Less Time At The Office?

Given the hectic, stressful lifestyles of most business owners and managers, it is no wonder that ‘enjoy life more & take more vacations’ is a popular new year resolution. Get hotel reservations and airplane tickets one year in advance of your next vacation to make sure you do what you want to do. And don’t take your cell phone or computer! Plus go out and see at least 20 customers over the next 20 days weeks.

2. Should You Start Your Fitness Program?

Can too much exercise can be bad for your health? Plus if you don’t workout today, you’ll be more rested tomorrow and then can workout even harder. Working out also reduces your ability to be at work more hours, take on more responsibilities, and make more money! So, when you finally make enough money, then you can afford to buy some workout clothes that make you look fit, join a gym, and get on a program. What about the fitness of your company as well? Are you also examining what needs to improve, where you need to trim the fat, or what areas need to get fit? Look at your business fitness goals for the next 12 months. Think about your future and imagine what you want to be different or better one year from now.

3. Should You Gain 175 Pounds?

After all, skinny people look worse than heavy ones. Over 66 percent of adult Americans are considered overweight. So it’s not surprising to find that weight loss is one of the most popular New Year's resolutions. In your business, where should you add some weight to lessen your load? Perhaps you need to add a professional office manager, accounting manager, project manager, estimator, or field superintendent. When you add a real pro who can help take some of your workload, you’ll be able to focus on the priorities that will increase your sales and improve your bottom-line.

4. Should You Spend More Than You Make?

Live way, way, way beyond your means is the new normal while you wait for the economy to turn around. In business, don’t sell your equipment and even consider buying more at irresistible prices. This will force you to hire a mechanic, buy a service vehicle, and rent a bigger yard to house all your equipment. This will force you to work harder to make the payments and cover your monthly overhead. And the new economic stimulus will hopefully provide enough opportunities for you to keep your fleet working at least some of the time! A positive New Year’s resolution is to get a handle on your finances now! As you have heard me say many times, you must know your numbers to grow your business and make a profit. When you’re strapped, you make desperate decisions and poor choices just to keep afloat.

5. Should You Get Completely Stressed and Out Of Control?

Stress is a good thing to have. When you’re stressed, you wake up at night and make those valuable lists that help your business and personal life become better. Stress helps you multi-task and never be in control. Besides, if you get in control, you can’t get enough things done in a day. So sweat the small things, take care of every detail yourself, and worry about all those little things you don’t have control over.

In business, only a few things are worth stressing over. What are your top three priorities in your company? I suggest the only things business owners need to stress about are sales, revenue, and customers. When you have enough sales and customers, the rest can sort itself out with good systems and people. How many more hours will you dedicate to your top three priorities over the next year?

6. Should You Keep Doing What You’ve Always Done!

When you learn new ideas, you don’t have enough time to do all the things you want to. So not learning new things is a great way to get by in life. Read less books and stop trying to improve. Besides, too much learning can really wreck your head. I suggest you watch more television as an alternative solution to your predicament. People who don’t commit to written resolutions or goals, continue doing things the same way. They get trapped in what I call the “un-comfortable” zone. They know they want to break out of their situation by doing something different, but don’t. They live with continuous dull pain, stress, and discomfort rather than do something new, exciting, or different. What do you want, dull pain or positive results?

7. Will You Win Or Lose In 2010?

If you could start over, what would you do different? Why aren’t you doing it? Everyone needs time to stop and think about their future. You need input, help, advice, wisdom and ideas to decide what you need to do to go out and build a better business. George Hedley is holding a special “Win In 2010” Profit-Builder Circle Academy on January 28 & 29^th in Costa Mesa, California. He is offering a special one time FREE rate never offered before to help construction business owners jump start their companies and figure out what they need to do to take them to the next level based on the reality of the economy.

- Where do you need to add new business?

- What do you need to stop doing?

- What do you meet to eliminate?

- Where are you stuck?

- What decisions are you postponing?

- How should you reorganize your staff and management team?

- How can you implement your plans to make a profit & grow your business?

Don't Get Caught With Your Pants Down

George Hedley — Thu, 01 Oct 2009 05:00:00 -0700

Last month I reported the recession is over. I received several emails responding that it is not over. Some of you even sent me articles and statistics showing the recession will last a lot longer into the future. I realize the business slowdown is here to stay. But, it is your decision to wallow in the negative or look for positive things you can do to grow your business and make a profit.

When the financial tides kept coming in for years, we were lifted up, up to our eyeballs in business, and making money was easy. When the tides went out, we were left standing in shallow water with our pants down. An ugly sight!

In the latest edition of Forbes magazine, it shows that most industries have bottomed out and are now making more profit than they were when the economy was booming. Why? They have trimmed the fat, increased efficiency, improved productivity, reduced excess inventory, eliminated poor performing products or services, and have intensified their focus on attracting profitable customers.

I am looking forward to 2010 as a fresh new beginning. Your choices are to “Be a has-been in 2010” or “Win in 2010!” I choose winning! When the economy was booming, most companies only had one source of revenue. The recession has shown us we need 3 types of income to weather the storms. Over the next few months we will be increasing our business in 3 different areas. First we will be expanding our ongoing continuing revenue and service business. Second, we will be seeking wealth-building investments that will bring in positive monthly cash-flow. And third, we will be working hard to improve our one time contract business.

What about you? Will you get caught with your pants down as the tide goes out some day in the future? As a thought, why don’t you consider joining one of our ongoing Executive Roundtable Groups. I am forming 1 or 2 groups starting in 2010. These groups of up to 12 other company owners and managers will meet 3 times per year in a peer group format. Everyone will get to share their challenges and get input to help them improve and grow their business. Shoot me an email to get the complete brochure: gh@hardhatpresentations.com.

SPECIAL ANNOUNCEMENT!

New WEBINAR Series exclusively for the readers of HARDHAT HEDLINES.

Construction Business Strategies For Tough Times!

The economy is tough and the economic slow down is hurting most construction business owners and managers. To help contractors build their companies, George Hedley has created a 7 Step online learning webinar to help your business grow and make a profit during these difficult times. The webinar includes eight 45 to 60 minute programs delivered to you weekly via email. You watch each online webinar presentation on your computer, at your convenience, take notes and then implement the ideas, steps and tips you’ll learn.

7 Steps To Win More Customers & Contracts!

Program Description

Being the low bidder is not enough. To win more construction contracts today, you’ve got to give customers a better reason to award your company the job. Customers buy best value, differentiating factors or trusted relationships. But if all else is equal, they buy the lowest price. To overcome the low bid process, you must start with a winning strategy, set your company apart from the competition, perfect your proposal strategy, improve your bid-hit success ratio, and professionally present your company to win more jobs, customers and contracts.

In this 8 part program, you’ll learn how to develop a winning estimating strategy, become the select bidder and get on the right bid lists. Discover the real purpose for your bid and professional proposal strategies that give customers exactly what they want by offering more than the minimum required by the plans and specifications. Inclusions, exclusions, alternates and value engineering strategies will also be explored. And you’ll learn how to get in front of the decision maker so you can negotiate and win more contracts at higher prices.

Present your company to win more customers by creating irresistible proposals and presentations, offer more services and deliver the results customers expect. Plus you’ll learn marketing and sales strategies that boost your bottom-line by attracting more profitable customers, lots of referrals and convert repeat customers into loyal partners.

The first webinar is FREE!

For the complete brochure, pricing & information visit: http://hardhatpresentations.com/webinars

Earn More, Work Less, Live Life! - Series #6

The 8 Traits Of Great Companies!
By George Hedley

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 you want 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.

Did you score more than four?

Great companies have at least seven of the eight traits. Companies that are less than great tend to only possess four traits or less. As entrepreneurs grow from one employee to five or twenty, they are often too busy to stop and write down their vision, goals, organizational chart, job descriptions, employee accountabilities, operational systems, or sales and marketing implementation plans. They get too busy doing everything themselves and don’t have enough time to focus on their numbers or seeking investments. And because their service, product, or delivery system originally was entirely dependent on themselves to produce the work, they never developed a unique or differentiating factor that set them apart from their competition. Over time, most average companies eventually outgrow the entrepreneur’s ability to hold it all together without written goals, plans, and systems in place. And they really don’t provide something different than their competition does except their personal attention to detail, which is not enough as their company grows.

Trait #1 - Start with an exciting vision!

What do you want to happen with your company and where do you want it to go? Leading companies start with an exciting focused passionate vision connected to the specific results they want. Some companies have a vision to be the best company in their marketplace with the biggest market share. Others want to be known as the best service provider, provide the best quality, or offer the lowest price. Great companies ramp up their visions with more excitement. Exciting visions of great companies read like these: be recognized as the leader in customer service, being number one in building difficult technical projects, finishing jobs ten percent faster than our competition, or being known for helping customers make a profit. Bill Gates of Microsoft had a big vision to put a computer in every home. Ask the people who work for you and a few customers, "What's the vision of our company and what are we trying to accomplish? If they don’t know, you’ll never become a great company. What is your passionate vision that will excite your customers and employees?

Trait #2 - Write and track your targets and goals!

After defining your exciting vision, specific results must be written down and targeted to quantify exactly what’s expected for your company, departments, people, and projects. For example, if your vision is to be the best service provider, determine what specific measurable results would enhance your bottom-line. Some targets you can track include obtaining a referral from every customer, only five percent callbacks, no installation errors, or 98% on-time completion. What specific targets and numbers can you shoot for to realize your vision & get the results you want? Without specific clear targets, your people really don’t know what ‘try to make ten percent gross profit’ or ‘try to do quality work’ or ‘try to be the best’ really means.

What are your top priorities and specific targets your company is shooting for? You need to then monitor and track the progress if you want to achieve your company, department, and project goals. Ask your people what results are important. You'll probably get 17 different answers if you have 17 people working for you. To get the results you want, write down and track your targets to get everyone on the same page from top to bottom.

Trait #3 - Draft your structured organizational chart!

Company managers and employees who don’t have written detailed job descriptions, don’t know what they’re 100% accountable for, don’t have authority to make decisions, and don’t have an understanding of the clear lines of communication in your company, can’t be held responsible for producing the results you want. Without a structured organizational chart and a list of accountabilities for every position in your company, your people will wait for their boss to tell them what to do next. This limits employee’s growth, enthusiasm, production, and efficiency. Plus it stalls the company so it can’t grow beyond the owner’s ability to make every major decision for everyone.

It doesn’t take a lot of time to layout your perfect organizational chart. Each position’s duties and responsibilities must be considered, detailed, described, outlined, and assigned listing the accountabilities and expected results desired and required. Only with these clear descriptions can people help the company grow and become great.

Trait #4 - Know your numbers and make big profits!

Many business owners are too busy to be bothered with watching and tracking their numbers. Can you imagine the CEO of a major company not focusing on or knowing their company’s revenue, direct costs, fixed costs, and profit? You can’t make a profit if you don’t know what to charge and how much you need to bring in. Many companies shoot for moving targets by attempting to make ‘as much money as possible’ or ‘more’ than they are currently making. ‘As much money as possible’ is not a target. ‘More!’ More than what? These are not clear targets or goals. 5%, 10%, or 15% are not clear targets either. As your sales and job costs vary each month, your total markup earned changes, while your fixed cost of doing business remains the same. This causes your net profit to move up and down like a roller coaster.

The owners of great companies spend a lot of time making people accountable to achieve the numbers. They set specific targets and keep track of the progress towards them. Annual sales of $5,000,000, overhead target of $600,000, and a net profit goal of $200,000 are specific fixed targets you can shoot for and hit. Not More! Not as much as possible! With specific targets for sales, costs, overhead, accounts receivables, cash flow, and net profit, you stay focused on the lifeblood of your company.

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.

Trait #6 - Install a pro-active sales and marketing program!

There are many ways to improve your profit margin. These include cutting costs, reducing overhead, improving field productivity, accurate estimating, making no field mistakes, and having an excellent training program. All of these will give you small improvements in your bottom-line, but not enough collectively to make a significant difference.

The easiest way to make more money is to create it! Profit starts with revenue. The more profitable revenue, the more bottom-line profit. Revenue comes from customers. To make more profit, develop more profitable customers. Are customers your #1 priority? Do you have a written sales and marketing plan that delivers a consistent flow of loyal customers, profitable revenue, and new customers? While doing good work is important, it will not deliver the revenue you need to become a great company. You also need a pro-active sales and marketing program that constantly attacks customers, generates inquiries, gathers referrals, seeks new business opportunities, and gets potential customers to only call your company when they need your product or service.

Trait # 7 - Replace yourself with operational systems!

A systemized business produces consistent performance and the same results every time. How much money are you losing relying on your people to do their best without standardized written operational systems and ongoing training? When your employees and customers rely on you to make sure everything is done right, you get stuck at the level of what you can control.

Great companies have and maintain written systems and procedures for all employees to follow. To organize and systemize your company requires time to get everyone doing business the same way. But the end result is worth it. Systems will allow your company to be the best in what you do and allow your company to grow. To make it happen, you’ll have to dedicate the resources to put all of your important work processes in writing and create a “DO” manual of pictures, checklists, and guidelines for your employees to follow.

Trait #8 - Seek investments to build equity and wealth!

The outward indicator of a great company is steady growth and profitability year after year. Every new entrepreneurial company that becomes great should create enough significant excess profits within the first five to seven years to start seeking wealth building investments. Wealth building investments deliver positive cash-flow without much effort or attention like real estate properties, joint ventures, or stock ownership.

If you can’t find enough annual profit leftover to invest, perhaps you need to change how you do business. Companies that continually struggle generating profits and never seem to get ahead, can’t become great. For whatever reason, these owners have decided to shortcut most of the traits required to be great. Often these companies struggle for decades as they are run by owners who shoot from the hip and manage by the seat of their pants. These poorly run companies ruin it for the great companies by charging too little, doing the minimum to get by, providing no training for their employees, and delivering less than expected by their customers.

Be great!

It’s not too late to be great. The choice is yours. What you do and the decisions you make deliver the results you get and determine your future. Not making enough profit? Not growing fifteen to twenty percent per year? No money left-over to invest? Take a look in the mirror. Take a hard look at how you do business. Look at your people and organizational chart. Look at your company systems. Look at what sets you apart from your competition. Look at your profitability and focus on finances. Do whatever it takes to figure it out. Hire a business coach or a new general manager or controller or director of business development. Stop postponing your potential, install all of the eight great traits, and your company will become great.

The Recession

George Hedley — Thu, 10 Sep 2009 05:00:00 -0700

Thank God the recession is finally over for contractors and business owners. It was a bad one and took most of us down to very low levels. Many companies laid off over 50% of their workforce and management team. Others cut their prices and took jobs and contracts at below their costs just to keep busy and stay open. And some even had to lower salaries and cut their overhead expenses to weather the storm.

Now that the recession is over, it’s finally time to get back to basics and do the things that make you the most money. Things like increasing your marketing and sales to new, repeat and potential loyal customers. Upgrading your management team so you can develop an efficient and productive field operations. And beefing up your finance and accounting department with the latest software and the best manager available.

But what about you? What will you do to become a better business owner, executive or manager? It’s finally time to invest in your company’s future so you can take advantage of the opportunities that’ll be coming your way in the next several years. You’ve been trying to go it alone making all the tough decisions over the last few years. It was hard trying to make the right decisions without input from others, wasn’t it? You weren’t sure what you should do to survive. You did your best. But you know you should have done things different. I bet you wish you had some other people to bounce ideas by before you had to act or pull the trigger.

Now it’s your opportunity to get it right! To help your business grow and profit over the next several years, I am forming a few exclusive peer to peer Executive Roundtable Groups. These small groups will meet three times per year so you can share your challenges and decisions with other business owners and executives and get their input and suggestions. Stop procrastinating doing what you know you need to do. It’s now time to put yourself first.

Don’t wait until it is too late! I will only facilitate and lead the first few groups we form, so get involved early. Plus I have a special offer for those of you who join our ongoing peer groups in 2009. We will start these groups in early 2010 so you have time to schedule them into your calendar. Email me to receive the complete brochure, price and application @ gh@hardhatpresentations.com

Webinars Powered by World of Concrete

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HOW TO WIN MORE JOBS IN A TOUGH ECONOMY
Presenter: George Hedley, CSP
When: Thursday, September 17, 2009 12:00 PM, EST
Moderator: Rick Yelton, Editor in Chief, The Concrete
Producer, Masonry Construction, Concrete Surfaces
Registration Fee: $65 which includes access to archival viewing for 1 year post live broadcast.

http://registration.experient-inc.com/ShowHWE091/Default.aspx?Alumni=1

Earn More, Work Less, Live Life! - Series #5

Two Heads Are Better Than NONE!

- Take Time To Plan Your Strategy

By George Hedley

Imagine yourself stranded on a tiny island trying to make a strategic decision how to get off the island quickly and safely before you run out of food and die. Without any input, advice, or ideas from other people or outside advisors, it would be very difficult to decide what to do next or the best way to get off the island. Now imagine an entrepreneur or business owner sitting in their office alone trying to make all the decisions how to run their company. These senerios are similar. Without input from others, making decisions based solely on what you know and your experiences are no guarantee you’ll choose the right path to take. Your chances are less than fifty percent, or twenty percent, or perhaps ZERO! Not good odds when your future is at stake.

Do you continually struggle with big decisions that shape the course of your potential success:

“What should my organizational chart look like?”

“Do I have the right people in place to grow my company?”

“What type of new business should we go after?”

“How can I cut or control overhead expenses?”

“Who should I fire to balance our budget?

“Should I promote from within or hire a trained manager?”

“How can we make more money in the field?”

“How can I make my managers more responsible and accountable?”

“What financial reports should I be getting?”

“How much money should I be making?”

“How should I give out incentives and bonuses?

“How can I get my people more motivated?

“Where am I losing the most money?”

“What’s working and what’s not?”

“How can I get my company to go where I want it to?

It’s Lonely At The Top!

With the fun and excitement of owning and running a company comes much stress and strain. Overwhelmed with tough questions, no easy answers, and difficult decisions, frustrated business owners delay deciding what to do about their direction, management team, customers, equipment, marketing, profits, financial reporting, investments, and growth. When you delay or postpone necessary key strategic decisions, you continue living with mediocre employees, poor results, inadequate organizational systems, and continually struggle to keep everything moving in the right direction. Eventually you come to the realization you can’t do it all yourself and need to seek some help. Unfortunately most never get off the treadmill to look for professional advisors and make time to improve their companies. This is kind of like postponing a trip to the doctor even though you know that nagging pain in your chest must be attended to before it’s too late and you have a heart attack.

We all know that two heads are better than one. Guess what? Two heads are better than NONE too. You can’t do it alone. You might as well be stranded on an island. The odds are less than one in five or ten you’ll make the right decisions when you do it alone. And when you ask your managers or key employees for advice, they only give you their perspective on what’s best for them, not you or your company.

Me, Myself & I

The best advice you can get is from outside, unbiased professionals who know your business, can give you real opinions of how to improve, and are not afraid of telling you the truth and hurting your feelings. I founded my commercial construction company in 1977. After only seven years in business, I had built up to 150 employees and we were doing $50,000,000 in annual sales. I thought I was doing great (and knew everything there was to know about business) for a young thirty-five year old. A friend suggested that a company board of directors could help me take my company to the next level. So, I asked five very successful businessmen to be on my advisory board of directors. At our first meeting, I proudly presented my goals, financials, and plans for the future. I then asked for their input. One by one they proceeded to rip me apart and ask questions I couldn’t answer. Their laser-like questions included:

“Is that all the money you make for the risk you take?”

“Why are you only doing that type of work?”

“Why is your employee turn-over so high?”

“Why do you do so much of the work yourself?”

“Who else on your management team do you review the financials with?

“What is your plan to improve profitability?”

“What new customers and markets have you tried in the last year?

“Why are you afraid to let go of major decisions?”

“Do you have a strategic business plan?”

These questions and many more made me feel really stupid and about two feet tall. I did not have a good answer for any of their questions. I thought I had done fairly well building a company with me as the leader. But my inner circle and executive management team consisted of just me, myself, and I. And, I had obviously missed the boat on many major issues required to become VERY successful and VERY profitable. Does this scenario sound familiar to you? Are you alone making most of your strategic decisions. Do you continue to do business the same way and expect better results if you work a little harder?

Get some help!

My advisory board recommended I hire a professional management consultant and coach who specialized in helping construction business owners grow and make a profit. They also recommended I quickly work with the coach and my management team to draft a strategic business plan before I made another dumb decision. After several days of mourning and shock from the reality of the board meeting, I took the advice and decided to invest in the future of my company and get some help. I hired a construction business management consultant and coach who helped me look at my leadership style to become a better leader and analyzed our management team to determine who were valuable assets to our long term growth. He also reviewed and improved our overall operational systems, standards, and procedures to help us get organized, systemized, and more in control. In addition, he reviewed our numbers and give us advice on how to make more money. After getting to know our company, he then did a great job at facilitating our two day strategic business planning workshop. I could have never made the moves and changes I needed to make without the help, advice, and pushing of an outside person who had no agenda except to make me and our company better.

Where do you need help?

Over the last fifteen years as a speaker and business coach, I have worked with dozens of construction company owners who decided they couldn’t make all the right decisions about their company alone. They wanted an outside opinion of what they should do to improve from a professional who knows their business and what it takes to grow and build profitable companies.

Dave was a business owner I helped who was trying to figure out how to slowly turn his company over to his son, without upsetting the older managers who had been with him for years. Jim was struggling with a shrinking market and tougher competition, and needed help with his business development, marketing, and sales program to attract better and more profitable customers. Art was having field productivity problems with his large crews and needed help creating a program his foremen and supervisors would buy into. Ken’s company’s safety record was not acceptable and wanted help creating a program to eliminate accidents and motivate his field employees to make safety a priority. Larry was struggling with keeping his project managers and estimators accountable and responsible to bring their jobs in on-budget.

Dale asked me to help his twenty division managers work on a plan to expand their services and create loyal customers across the country. Charles needed help getting his company organized and systemized so all of his project managers, superintendents, and foreman would do their jobs the same way. Dennis asked me to help his national sales team develop a sales accountability and tracking system to keep their salespeople focused on loyal profitable customers and expand their market share. Darren wanted to get into real estate development and wanted advice on how to invest his company profits into rental projects. Harold couldn’t decide how to structure his organizational chart so he could work less and become semi-retired.

Every small business owner has internal challenges, external threats, and tough decisions to make. Some have long time employees who have stopped being productive. Others have relatives in the company who aren’t doing their share of the work. Many just can’t decide what moves they need to make to earn more money or find better customers. Some struggle with incentive compensation programs or basic ways to generate steady and profitable revenue. But without sound advice, these owners try to make sound decisions but usually stay stuck doing what they’ve always done.

When Bob called, he didn’t know what he needed. He just knew he needed help. So he hired me to do some phone coaching while I conducted a survey of all of his employees to determine what the real problems were and how I could help his company. I asked his employees, in a confidential survey, a series of questions: ‘What works? What doesn’t work? What needs improvement? Where are you losing money? Who is losing money? What do you need to change? Which people are productive, good, bad, or need to go? What additional responsibilities do you want to accept? What are your career goals at this company? And if you owned the company, what would you do different?’ From the results, Bob and I continued our phone coaching and decided to hold a strategic business planning two day workshop retreat.

What is a strategic business planning workshop?

A strategic business planning workshop is a one, two, or three day retreat where company owners, leaders, and the key management team sit down and hash out the direction for the future of their business. They will develop a one, three, or five year strategic business plan with their mission, key success factors, goals, objectives, targets, strategy, and action plans clearly defined and written. The decisions they make will answer these eight key questions:

1. What’s the owner’s purpose for owning the company?

2. What is the business mission and vision?

3. How are we currently doing business?

4. What’s working and not working?

5. What threats or challenges do we face?

6. What additional opportunities are available to us?

7. Where do we want to go and what do we want to accomplish?

8. What do we have to do to get there and achieve our goals?

Invest in your future!

A valuable every business owner can make is to invest in your company’s future. Business coaching and strategic business planning takes dedication, time, energy and money. You and your management team will have to dedicate time to the process. And to implement the plan will take even harder dedication and effort. You as the company leader must demand and want real meaningful change in the direction you decide you want to go to make your company achieve it’s goals. Are you up to the task? Are you willing to look in the mirror and face reality? Do you really want to make a positive difference in your future? Are you open to changing and improving what you’ve got? Are you ready to tackle your people, processes, systems, procedures, communication, customers, organizational chart, reporting, chain of command, delegation, accountability, methods, focus, direction, and your leadership style?

What do you need to fix?

To get started, you will need to do an in-depth analysis of where you are today, how you do business, what’s working, what’s not, and what needs to be improved. The pre-planning survey approach is a great way to start. But if YOU try to be objective and get honest input from your employees alone, it won’t happen. One company I worked with insisted their employees turn in their pre-planning surveys to the boss’s executive secretary to review before she passed them onto me. They assured me their people would not hold back and be honest about company issues. You guessed it. All of their answers said everything was perfect and everyone at their company was doing a good job. No way!

To get truthful input it is best to use a neutral party to help you discover what really needs to happen to fix your problems and take your company to the next level. To enhance the pre-survey results, asking customers, subcontractors, and vendors for input can also be helpful to discover others areas of strengths, weaknesses, room for improvement, and potential business opportunities. After gathering as much input as possible, you are then ready to get your team together, roll up your sleeves, meet for a few days, and get to work. Select a comfortable meeting location at least one hour from your office to get the attendees out of their work mode and into the planning mode. Leave your cell phones behind and be ready to interact, work together, and build a team focused on the future. Often a business hotel or retreat center works great. This allows for relaxation and thinking during the breaks and evening hours. The planning retreat attendees should include your company owners, executives, managers, and key employees. The right number of attendees depends on the size of your company. Around eight to fourteen is a good number to be most effective.

You’ll also need to have your company’s basic information available at the planning workshop. Each participant must come prepared with information about their area of responsibility so the team can make good informed decisions. Have them bring past the company financials, budgets, revenue, overhead, profit, current organizational chart, marketing and sales information, estimating information, project and customer lists, equipment lists, and any other items you think you may need to refer to while making decisions about the future of your company.

What’s your mission?

Over the next two days, your planning facilitator will help you take a hard look at your company, people, systems, operations, customer base, profitability, strengths, weaknesses, market opportunities, external challenges beyond your control, and your future. Then you’ll create a mission statement outlining your vision for your future. At a recent strategic planning retreat I facilitated, we developed the following company mission statement:

“The mission of the ABC Construction Company is to be the market share leader in transportation projects and heavy highway public works construction in the Southern Counties of XXX State by providing competitive and superior workmanship using quality methods, equipment and materials using well trained employees in an ethical, safe, efficient and highly profitable manner.”

Note how simple and focused this mission statement is. It is very clear what they do, how they do it, and for whom they do it. How focused can your company be without a clear mission of your exact customer targets, pricing methods, people standards, and a goal to be highly profitable?

After you draft a clear mission statement and have listed out your strengths and weaknesses, it’s time to begin the real reason you invested in a strategic planning workshop. You want to develop objectives to move your company towards the targets you want to hit. First you start by identifying goals in the important areas of profit and revenue needed to meet your financial requirements and minimums the owners want or demand. With this in mind, next you outline targets for customers, projects, and markets to aim at. Then you may choose to set goals for operations, management, field, project management, estimating, standardized systems, people, training, safety, technology, administration, finance, accounting, other business opportunities, and investments. Additional goals may also emerge depending on your company situation, threats, challenges, direction and needs.

Decide what to do first!

After your team has created a long list of company objectives, goals, and targets, you’ll realize you can’t work on all of them at once. Too many goals are worse than no goals at all. So the planning team will need to prioritize which goals are the most important and will make the biggest impact over the next few years. Obviously revenue and profit will be on the ‘must-do’ list along with others. Typically I recommend only five or seven goals should be tackled at any one time. You can always add more goals to work on after the first few are accomplished. It is best to start with and draft goals that’ll make you the most money or give you the biggest competitive advantage the quickest.

Next the planning team will work together on each of the top priority goals. They will clearly define the objective, give them measurable targets, give the goal a deadline, and assign a responsible team captain to champion the cause to make sure it becomes reality. An example of a few strategic goals can include:

“Increase our total annual sales revenue to $40,000,000 next year and then increase it by 20% per year for five years while we improve our pre-tax net profit from 2.5% to 5% of sales in the next three years.”

“Create and develop a complete marketing and sales program to generate $20,000,000 of new revenue and customers in the medical and hospital market by January 1, 20XX.”

“Develop a complete comprehensive program to improve field productivity 20% by July 14, 20XX including a tracking system, job cost system, training, and accountability.”

“Install a complete cutting-edge technology solution for our company by September 1, 20XX to allow for growth during the next five years which will include accurate and timely accounting, job costing, estimating, project management, tool inventory, and equipment management.”

For each of these goals, a team captain must be chosen to lead the initiatives. The captains will ask other managers and key employees to help on their team committees. Involving lots of people will enhance the success towards accomplishing the ultimate goals and strategic plan’s objective. The team captains will work with their teams to create action plans, additional committees, and deadlines for the many tasks needed to achieve their assigned goal. The company owner must hold mandatory strategic planning team captain update meetings every month to review the progress of each committee. Without strong leadership from the company owner, the strategic plan implementation will never become a reality.

And the end result?

Fast forward one year later after your strategic planning workshop retreat. Your company will have made incredible progress and accomplished more than you would have ever hoped for. You will have improved your bottom-line profit, revenue, customer loyalty, market share, employee morale, teamwork, systems, and overall operations. Without a plan, nothing will get better. Why? Because: “When you aim at nothing, you hit it every time!” So make a decision to stop trying to make all the decisions yourself. Invest in your future. Get a business coach. Hold a strategic planning workshop retreat. Set goals. And let your company become the best it can be.

The 5% Factor!

George Hedley — Wed, 19 Aug 2009 05:00:00 -0700

Question For George From A Subscriber

I have seen George speak at several events and have been reading many of his articles in Construction Business Owner magazine, and obviously done a little research on his Profit Builder Circle, so I am somewhat familiar with his ideas and concepts.

I am a second generation owner of a 50 year old site-work and utility contractor in the Atlanta area. We have been extremely successful over the years, but the housing collapse over the past two years has completely eliminated our private construction market. We have been forced to transition to the municipal sector. The pressure on that market has also pushed most of those jobs to go for less than cost. Because of these dynamics, we have seen many of our competitors dissolve or go bankrupt. Unfortunately, we are experiencing a very tough time as well. We have not had a break-even month in over a year, and have had to sell off many assets just to survive. I think the only reason we have lasted longer than others is we had built up enough retained earnings over time.

All of this background to say this, I am very interested in advice and strategy that will help me effectively navigate what is left of my business through these times. Our current balance sheets and financials don't give an accurate picture of where we have been in the past. Our business is a lot different from most others as we are so asset (equipment) heavy. I have seriously thought about stopping operations and waiting until things change, but what does that mean? In Atlanta, there is a projected 10 year supply of subdivision lots, which means a long road back to normal. I value your suggestions.

Thanks, James King, King Excavators

George's Answer To James

I don't have a crystal ball, but I do concur that a recovery to 2007 levels may take five or ten years. The current statistics show all construction starts have dropped 43% since early 2008 to mid 2009. I believe 2010 and 2011 will get much worse. The problem is that the number of competitors currently chasing 43% less jobs has wiped out the potential to make any profit in most markets. In the meantime, most contractors have failed to make enough changes to right their ship and do what's necessary to stop the bleeding and eventually make a profit. Cutting your expenses is not enough. It won't give you a net profit.

If the number of jobs available is 50% less, the number of competitors double, and your mark-up gets cut by at least 25%. This means to break-even, you would have to cut your overhead by 75%, your markup by 25%, and hope to land 50% of your 2007 volume. These numbers won't work in a world where your competition will do anything to keep busy and pretend they're still in business.

So now what? Try to break-even and not lose money for several years, change how you do business, close, or take your money and invest it into growth opportunities. Tough decisions. The economy and the stimulus plan may help a little, but not enough to keep going and keep trying until you are completely out of money. Can you shrink your operations into one crew to keep your doors open? Can you seek joint ventures and strategic alliances with large national engineering companies who may need your experience as they take on more stimulus work, clean water jobs, energy and green projects? Can you merge with another contractor who doesn't do what your company does (roads or waste water treatment) so you can cut your overhead in half? Or can you sell most of your equipment at a discount, continue in business by leasing equipment on an as-needed basis, and then take the money and invest it in distressed real estate properties or other businesses? Now is the time to make the tough decisions. The longer you wait, the less you will have to work with in the future.

Call me if you want to have me coach or mentor some ideas with you or your management team.

Earn More, Work Less, Live Life! - Series #4

The 5% Factor!

- Produce More To Make More!

By George Hedley

In the good old days, construction companies were owned and run by builders. These proud, tough, hard working men and women learned their trade in the field, had years of practical experience, and knew what it took to get their projects finished on-time. If they didn't produce quality workmanship, they didn't last long. Back then it was all about getting the work done no matter what it took to meet their obligations. It was about delivering solid structures with unsurpassed craftsmanship. The contracts were negotiated face to face and enacted with handshakes, based on integrity, reputation, trust, one's word, and doing what's right. It was all about building a project the contractor could remember, be proud of, and then rely on their customers for recommendations and new work.

Fast forward to today. Now successful construction companies are run by professional managers, engineers, and accountants. These business leaders are focused on the bottom-line and following what is only required by the contract. These managers have college degrees and little or no construction field experience. It's now about paperwork, documentation, notices, claims, and tracking systems. Building the project isn't as important as getting the work, doing the paperwork, and getting paid, even if it involves litigation.

Combine this lack of real field construction experience at the top of many companies today with the lower and lower profit margins. Years ago there was not enough qualified construction companies to handle all the work available in the marketplace. Under this business climate, contractors could afford to always do a little extra to insure a perfect project and still make a good profit.

More demands = less profits!

But over the last 40 years, the number of contractors has tripled while the total amount of construction has stayed relatively flat (adjusted for inflation). Therefore now there are more contractors than needed to do all the work required by the market. This has created a price squeeze and reduced contractor's ability to do more than the minimum required by their contract. In addition, with increasing competition, construction customers are now demanding more than ever before. They now demand faster schedules, safer projects, better quality, more communications, and better technology, all at much lower prices.

These added customer demands on contractors who are willing to sign contracts for less than they should, have killed the construction business as it once was. Add to these demands poor architectural plans, problematic engineering, incomplete specifications, conflicting contract documents, material shortages, price fluctuations, more regulations, added paperwork, lender's requirements, third party inspections, construction managers, and red tape, has all but eliminated a fair profit for the risk contractors take.

It's time to refocus on the field!

These issues have put pressure on contractors to save more and more money in the field. The average crew size has increased, while the number of experienced field workers on the crews has decreased. Training is a thing of the past as most employers have eliminated it as an unnecessary expense. Superintendents and foreman are younger than ever which also translates into less experienced field leadership and less efficient crews. This has resulted in poor or flat field productivity improvements over the last twenty years. Consider your challenges fighting against competitors who charge less than they should, have inexperienced and untrained field crews, and building projects that now require more paperwork and increased risk. A need now emerges for contractors to refocus on improving field productivity as their only viable solution to compete and improve their profit margins.

Construction profitability is about reducing risk. Contracts require contractors to assume more risk than ever today. Have you considered what's at stake?

Types of Construction Business Risk:

Project Location & Access	Project Type & Size
Project Schedule & Duration	Constructability
Customer	Architect, Engineer & Consultants
Contract Terms	Financial, Funding & Payment
Regulations & Inspections	Subcontractors & Suppliers
Material Costs & Availability	Plans & Specifications
Approvals & Acceptance	Project Management
Supervision & Coordination	Manpower, Productivity &Safety
Quality & Workmanship	Estimate & Budget
Factors Beyond Control

So how do you reduce risk and increase your bottom-line? Your choices are many. But consider which will give you the biggest return on your time, energy, and money. In other words, where can your company gain the biggest advantage over your competitors?

__ Lower Material Costs

__ Better Subcontractor Costs

__ Better Equipment

__ Better Supervision

__ Better Project Management

__ Labor Productivity

Construction risk is a 5 letter word!

The biggest risk and opportunity to make or lose money is ...LABOR! Let's look at a typical job breakdown to see what happens if labor runs over budget by 5%.

Typical Construction Contract Budget

Labor	$40,000
Materials	$40,000
Equipment	$10,000
Subcontractors	$10,000
Subtotal	$100,000
Overhead @10%	$ 10,000
Profit @ 5%	$ 5,000

Contract Amount $115,000

The 5% Factor = 100% More Net Profit!

Most construction companies only make an average annual net profit between 2% to 3%. If you can IMPROVE your LABOR costs by only 5%, you can IMPROVE your net profit amount to 4% to 5%. This can be as much as a 100% increase in your bottom-line!

If you can improve your labor by 5% in the example above, your net profit will increase to $7,000, or from 5% to 7% net profit. And if you improve your labor by 10%, your net profit will increase to $9,000, or from 5% to 9% net profit. This is real money and will put you far ahead of your competition and give you some breathing room to invest back into your company.

But, if you overrun labor by a small 5% amount, you'll spend $2,000 more than your labor budget and reduce your profit margin to only $3,000, or to 3% net profit. If you overrun you labor by 10%, your net profit will be reduced to only $1,000, and 1% net profit.

Is your crew working efficiently?

Consider how productive your crew is everyday out in the field. Studies of typical construction field crews show revealing facts and much room for improvement. Field employees spend some of their time planning the work. Then they produce the work. Some of the time they support the work doing layout, seeking information, fixing equipment, looking for tools, repairing tools, locating the right material, and asking questions. And of course some of the time is wasted goofing off, standing around, starting late, quitting early, extending their breaks, smoking, making personal cell phone calls, waiting deliveries, running out of materials, or taking care of their dogs loose on the jobsite.

Typical Construction Field Productivity

2% Planning work 0.2 hours / day

40% Producing work 3.2 hours / day

25% Supporting work 2.0 hours / day

33% Wasting time 2.6 hours / day

Do these results shock you? Go out to any jobsite and look around for a few hours or days. Just sit and watch what really goes on. You will be under-impressed and appalled. So where do you start to improve productivity? It starts with identifying the areas that take away form your crew's efficiency. Look for things that slow down production, create down time, or allow them to be less than productive. Some things that hurt your field productivity include:

- When the superintendent or foreman leaves the jobsite

- 5 trips to hardware store per day

- Run out of materials or small supplies

- Tools break or don't work properly

- Wrong equipment for the job

- Waiting for the right equipment to show up

- Smoking while working

- Cell phone calls

- Dogs running wild

- Not starting on time

- Quitting early

- Breaks and lunch time extended

- Bad attitude employees

Win the race!

NASCAR is a good model to follow. At each pit stop, there is no time to waste, as every second counts and can cost the team millions of dollars if they loose any time. How can you get your crew to win the race and become:

- Super efficient

- Super fast

- Super productive

- Super organized

Focus on the 5% factor!

The dilemma for most contractors is a downward spiral and never ending treadmill. When you try to do it all yourself, you aren't focused on field productivity. You get too busy taking care of small tasks that need to be done but don't make you money. When you're too busy to meet with your supervisors regularly to help them plan properly, problems continually happen. You only have enough time to react and fight fires. This causes your crews to stand around and wait for you to get them answers or needed materials.

You know you are losing money and your crews are inefficient as they waste more time than they should. But you don't have enough time to stay out on the jobsite all day to tell them what to do and keep them working faster. So you rely on the untrained foreman to get the work done. These supervisors have no incentive to work at a high productivity rate, so they do what they feel is fast enough based on their experiences over the years. Besides, what's the worse that could happen to them? You come out a few times a year and tell them they're over budget and try to get everyone working a little faster. Not much of a productivity improvement program.

5% Faster jobs = More profit!

How can you make your jobs finish only five or ten percent faster? Many of these critical scheduling factors can cause major delays:

___ Permits

___ Procurement

___ Submittals

___ Approvals

___ Material selections

___ Long lead items

___ Probable delays

___ Potential problems

___ Anticipated conflicts

___ Critical decisions

___ Phasing issues

Time is easy money!

Those major factors can cause your projects to take longer. But we are looking for the little things that really cost you money. When you don't focus on faster, it doesn't happen and you let your crews go with the flow. When you focus on speed, you get the whole team moving faster and becoming more efficient. When you start every project, get the easy money flowing by getting your supervisor and crew together. Explain the projected and budgeted schedule. And then ask them to brainstorm ideas how they can improve the schedule by a minimum 5% to 10%. Explain to them how 5% faster will translate into dollars and will keep your company competitive in the tougher marketplace. For example:

Squish the Schedule 5% or more!

Total projected project schedule = 100 crew days

Total crew budget @ $3,000 / day = $300,000

Beat the schedule by 5% = Save 5 crew days

Total crew savings = $ 15,000

Beat the schedule by 10% = Save 10 crew days

Total crew savings = $ 30,000

In addition to saving on your crew labor budget, the overall project will finish faster as well. You will save even more money concurrently on general conditions, equipment, clean-up, temporary facilities, and supervision costs. This money adds up fast!

Miracles can happen!

Years ago in July, I was on a jobsite meeting with my superintendent and concrete foreman. I asked them when they were going to erect and tilt-up the exterior concrete wall panels on a large warehouse project. They both told me they were planning on tilting-up on November 15th. That seemed too long a schedule to me for our 20 man crew to get the work done. So I asked them how they arrived at that date. They told me they met with the crane company and thought that date was 'doable' and they could easily make it happen.

I didn't like their answer so I asked if they could finish a few weeks faster. They both squirmed and didn't want to answer or commit. Then I asked if they could finish by October 25th if I offered them each a $1,000 incentive. In less than ten seconds, they both said they could make the faster October 25th date; A miraculous change of mind by two veterans. And they made the new date. It cost me $2,000 and saved me 15 days for 20 men. You do the math.

Sometimes we have to get creative to get the results we want. When we go with the flow, we don't push our people, and it costs us real money. When you compete, you run a little faster. When I used to swim in high school, I always went faster in the meets than in practice. Competition makes people go faster. Challenges make people work harder. So do games where you keep score and can declare a winner. I like to say: 'No score, no game!' What incentives can you offer to get your crew excited about beating the schedule?

Annual Savings @ 5% Faster

20 Crew Members @ 200 days @ $35.00 /hr	= $1,120,000 total labor
Labor savings with 5% faster schedule	= $ 56,000 saved
Equipment costs saved -4 pieces@ $50.00/ hr	= $ 16,000 saved
General conditions costs saved 4 jobs @ $1,000/day	= $40,000 saved

Total Annual Savings = More Profit = $ 112,000 saved

Trash your old tools!

Another consideration is the working condition of your tools and equipment, and their overall effect on your crew efficiency. When is the last time you did a tool inventory or a detailed equipment analysis? Some you should keep, trash, replace, or upgrade. Field workers tend to use old, broken, or bandaged tools and equipment rather than admit to the boss that they might be broken or worn out. How much money are old unproductive tools or broken down equipment costing you?

The added benefits of having quality tools and great equipment will be increased crew teamwork, improved morale, more pride of workmanship, better quality, less mistakes, safer projects, and more efficiency. This will translate into even faster jobs and more bottom-line profits for your company.

Poor Production = Poor Profits!

Do you think your crew wastes at least 3 to 6 minutes per hour? Those few minutes are costing you a ton of money.

*20 Person Crew*	*5% Time Lost*	*10% Time Lost*
Time Lost / person	= 3 minutes/ hr	6 minutes/hr
Time lost / day / crew	= 8 hrs / day	16 hrs / day
Total hours lost	= 1,600 hrs/ year	3,200 hrs / year
Crew labor rate	@ $35.00 / hour	@ $35.00 / hour
Annual Production Labor LOST	$56,000/year	$112,000/year

There are many ways to improve crew efficiency and finish your jobs faster. Start by taking a hard look at your start time, break time, lunch time, and quitting time. Does stop working at 3:30 pm mean start rolling up at 3:00 pm or 3:10 pm or 3:30 pm? For a 20 person crew, every minute you lose per day costs you as much as $2,500 per year or more.

Double your Profits!

Call an all crew team meeting and discuss ways to improve your schedule, save a few minutes every hour, define your exact hours for production expected, create meaningful incentives, improve your tools and equipment, increase efficiency, and strive to implement the 5% factor to get more everyday from everyone.

It's a Tough Choice - Stay Busy or Make Money!

George Hedley — Thu, 23 Jul 2009 05:00:00 -0700

In good economies, a rising tide lifts all boats. Even business owners who weren't following basic business fundamentals were making money during the boom over the last 5 to 10 years. Now that the tide's gone out, they are exposed and don't know what to do. Now these business owners are stuck without sound financial tracking systems, a marketing presence, loyal customer relationships, trained people, operational systems, updated equipment, or any cash left over to weather the storm.
Successful business owners adapted technologies and leveraged their competencies to seek new markets. Today you must re-think your business model and stop resisting change to survive. While many do nothing and hope the pain goes away or the economy to get better as they postpone decisions affecting their future until it's too late.

A business that's gone from $5 million to $2 million has to start over again from a $2 million operation, re-organizing sales, marketing, cash flow, and overhead. They need to try new markets, products, delivery methods and systems. And if you don't have the expertise to move into new markets, you need to hire someone who does.

Think like a Fortune 500 CEO. They've got to make a profit every quarter regardless of the economy. Their top line has to grow as well. If it doesn't, they get fired. Successful CEOs seek strategic alliances, partners, companies to buy, divisions to sell, joint ventures with other buyers and vendors to grow their business. They also weed out ineffective employees from effective ones and ask employees for input on improving the company.

You're not in the business you used to be. You're in the money-making business. What else can you do to make money? Perhaps you can add more services and become a full-service provider for your customers. You can't make money by saving money. There are two kinds of business people: those who try to save their way to success by doing everything cheaper and those who invest in their future through marketing, training, customer service, and improving their image.

JOIN US In Orlando September 11 & 12

We will be hosting a special 'Profit Builder Circle Academy' focused on changing your business to work for you in a slower economy. We will include a session on finding new markets and customers, offering new services, and how to emerge stronger and more profitable than ever before. Join us!

Special 3 for 1 pricing!
Bring 3 people from your company for the same price as 1.

Webinar
"How To Win More Jobs At Your Price!"

I will be presenting a 1 hour webinar in late August, early September. Everyone is invited to sign-up and participate. You will be receiving a link and a registration form shortly. I am doing this in partnership with Hanley-Wood and the World of Concrete. Watch for updates for the exact date and time.

Get Your Business To Work!

Thanks to all of you who purchased a copy of my new book on Amazon.com. With your help, it reached #7 on the small business books best-seller list. To purchase additional copies, I am now offering the book on in my bookstore at the discounted price of 2 for $30.00 or only $1.00 if you order 3 of the workbook CD sets. Check it out in our HardHat bookstore.

George Hedley

BOOK NEWS!

My new book is
available!! Order your book now.

ORDER NOW!

Earn More, Work Less, Live Life! - Series #3

Want To Stay Busy Or Make Money?
By George Hedley

As a business owner, I bet you love what you do. You're really good at doing your work with pride, integrity, and quality workmanship. If asked, you tell people you are the best at what you do and stand by your finished product and personal service. You have spent years working hard, building your company, grooming your management team, developing supervisors and foreman, training your crews, and growing your equipment fleet. You have a small list of customers who keep your company busy and provide you steady work on an ongoing basis. Your business pays your bills and often there is a little left over to buy a boat or recreation vehicle to enjoy on the weekends. Life is good as an entrepreneur and business owner.

Then the economy gets slower. Now what?

Never thinking a slow down will affect your business, you continue to do business the same way you've always done and hope the economy gets better. But it doesn't and there are fewer jobs to bid on now. So you lower your prices to stay busy and keep your crews and equipment working. Your good old customers don't have much new work so you venture out into new territories. Your competitors lower their prices even more and project bid lists grow from three to six to twelve to fifteen or more. The only way you can get any work now is to be 'stupid low' which guarantees you'll never see any bottom-line profit for a long time in the future. So you bid more and more jobs in hopes of landing any work you can find. You start bidding on projects where you have no experience, track record, or expertise. Anything to keep your doors open, your crews busy, equipm ent working, and cover your overhead. Now what?

Then you finally land a few new jobs. Relief! Back to work. But within a few months, these new jobs start coming in over-budget. These projects are different than the ones you usually work on and the unfamiliar contract clauses and specifications cause you some grief. You have a tough time working with these new customers. Your crews aren't very efficient and productivity is poor as they know there isn't much new work for them when they finish the jobs they're on. So it starts costing you money to finish the few projects you have going. And your paycheck is only a distant memory as you begin to feed your company to stay afloat and keep unneeded employees and managers on the payroll as you hope to land some new work some day soon. Then your lenders start calling to meet and review your monthly profit and loss statements before they renew your line of credit. And then your suppliers call to notify your monthly accounts are late, you must get them current, or you will be put on COD. Now what?

Stop! Time out! Hold Everything!

What are you doing? Why are you slowly going out of business by spending your savings and trying to keep your crews and equipment busy? How long can you survive feeding your company every month? Do you think something good will happen quickly to renew your bank account balance? Will your long time employees help pay your monthly expenses as a thank-you for keeping them busy when you are totally out of money? Will your underutilized equipment fleet be able to produce enough cash-flow to survive? It's time to stop and take a hard look at what you are doing right now before it's too late.

When work was plentiful, it was easy to stay busy doing the same things over and over to the same customers. You didn't have to look for new ways to improve your business, new services to offer, or new customers to build relationships with. Just bid enough jobs to your same five or ten customers, you'll get your share, and make enough money to stay in business. You really didn't have to be the best, creative, or innovative. You just had to be as good as your competition. The old saying: "A rising tide lifts all boats" applied during the good times. But now as the tide goes out, all boats will go down as well.

During one of my recent "Profit-Builder Circle" two day business owner boot camps I hold every few months, I asked the attendees what they could do to make a profit if they lost all of their business in the next few months. Most didn't have an answer. They were so used to doing the same thing and business the same way for so long, they were stuck. Most said they would just try to survive. Survive? Survive doing what? I again restated the question and asked them to consider that all of their sources of past business would be non-existent and they would have to do something different. Still no real good answers. Do you have an answer to the question?

As I started to dig deeper, David told us he was an underground utility, sewer, water, and storm drain contractor in Florida. Ninety percent of his customers comprised of track home builders and ten percent were public works and Cities. The good news was that over the last ten years he had built a large successful and profitable company doing over $8 million in annual sales. He had over 25 managers and supervisors, 150 field employees, 100 pieces of equipment, a large yard, an equipment manager, two full time mechanics, and a net worth in excess of $5,000,000. The bad news his home builder customers had put all of their projects on hold indefinitely and he was now pursing more public works projects to keep his equipment and crews working. On these projects, the bid lists had grown to over twenty bidders, and the only way he could win any contr acts was to price lower than his actual costs. Plus his $1,000,000 annual overhead expenses were starting to eat away at his net worth he had built up over the last five years. David didn't know what to do.

I asked David how long he would last waiting for something good to happen. He said he could probably hold on for at least a year. How much would it cost? He said he would lose at least $2,000,000 per year trying to keep everyone working. I asked him if it was worth it to give up everything he had worked for just to keep his long time loyal employees and managers working while his nest egg depleted. His simple choice: keep the money or give it to employees hoping the economy comes back fast. Not an easy decision. Then I asked what his equipment was worth. He said he could sell all 100 pieces of his equipment for around $5,000,000 net after debt.

Now the real question for you: Why are you in business? Is David in business to put pipe in the ground, grow his equipment fleet, and pay his overhead expenses? Many business owners forget the purpose of their business is not to cover their costs, do work, and keep busy. It is to give them what they want. Do you want to only break-even by working hard, and keeping yourself, your crews, and equipment busy? Or do you want to own and build a company that produces a constant flow of money, passive income, equity, wealth, and freedom to you as the owner? Your business is a tool to deliver the results you want and fulfill your dream of business ownership.

David and I discussed his options in detail. Keep doing what he had always done and watch his future disappear. Or consider a radical change. If he sold eighty percent of his equipment; reduced his overhead by 20 people to one project manager, an estimator, and a few office staff; and just kept a few crews working; he could stay in business at a reduced break-even level of $1,500,000 in annual sales. That way, when the economy turns for the better, he could jump right back into the main business he excelled at and his company would be one of the last underground contractors still standing. Then he could take at least $3,000,000 generated from selling his equipment and invest it. I suggested he start looking to buy under-market and under-valued fixer upper homes in good locations that could rent out easily to families at break-even lease rates. I recommended he seek single family homes in clean and safe neighborhoods near business centers, schools, shopping centers, hospitals, and government offices. He could utilize his crews during down times and when work was slow to do the repairs and refurbishment on his investment properties.

David made a goal to sell much of his equipment fleet and invest $3,000,000 to purchase 100 houses (100 houses @ $125,000 average price = $12,500.000 in value) within the next six months. If each home appreciated at least 25% over the next three years, his $3,000,000 investment would reap him at least $3,125,000 in net profit. This is a lot more than his construction company would have ever made, even in good times. David realized that his business was not the end, but a means to an end to ultimately get what he wanted.

Barry was also in the 'Profit-Builder Circle' and listened to our discussions. He owns a sheet metal fabrication and construction company specializing in high-end metal work, stainless steel, copper, and specialty work, as well as flashing and gutters for homes and industrial buildings. As the economy started to slow, Barry told us he hadn't waited to take action. A year ago he decided to get into the heating, ventilating, and air conditioning (HVAC) service business. Several of his key employees were competent in HVAC work as well as sheet metal construction. His estimators (sales people) were already calling on contractors, apartment builders, facility managers, restaurants, retail stores, and real estate developers. Most of these existing customers owned buildings that needed ongoing HVAC service; a perfect match for starting a business that's re cession proof. Buildings still need to be serviced regardless of the economy.

Barry's business plan was to build a HVAC service business directed at commercial buildings, facilities, and properties. He started by investing in his people and sent them to get certified by the major HVAC equipment manufacturers as trained service technicians. Then he moved two of his top managers into the role of customer service manager and business development manger. Today his HVAC service company generates over $250,000 in recurring monthly revenue and contributes to help pay his overall company overhead plus contribute to his profit margin. Barry thought out of the box and looked for opportunities that would compliment his overall business operation. He realized his thirty years in the sheet metal business wasn't the reason for being in business. He decided to do something about his future and invest in starting another complimentary busine ss that would delivery steady returns every month.

Last month I spoke at the annual "World of Hardscape" convention and trade show. Ninety five percent of the attendees seemed stuck doing only what they do or know how to do. They said their businesses were slow, there was too much competition, and they hoped hard work would make it get better soon. They are specialists who furnish and install concrete pavers, or bricks, or barbeques, or patio covers, or landscaping. As a result, they struggle to cover their costs and make any money. Why? They only do what they are comfortable doing.

The five percent of the "Hardscape" show attendees who are really successful had listened to their best customers and made decisions to deliver what their customers wanted. These profitable companies offer full service, complete, turn-key, design, build, and maintenance services. Many homeowners buy low price and just want pavers or plants and then 'poor-boy' the rest of the job themselves. But the high-end homeowners want total outdoor living environments, lifestyle experiences, care free service, and ongoing total service and maintenance. Contractors who offer first class professional service packages, make a lot of money, and have a long list of loyal customers by offering everything these top customers want. Think about what full-service outdoor management companies can offer to deliver what their customers want: design, demolition, irrigation, landscape, hardscape, walls, fencing, patio covers, outdoor kitchens, swimming pools, spas, waterfalls, patio furniture, ongoing pool maintenance, gardening service, annual tree-trimming, monthly lawn service, fertilizing, pest control, roof sweeping, holiday lighting, house exterior washing, snow plowing, and trash hauling. If your company offered a full line of services, could you make more money than you are making now during good and slow times?

Are you stuck and comfortable doing what you've always done? Haven't tried a new service, market, or customer type in a long time? Don't be afraid to get out of your comfort zone and look for ways to capitalize on what you've got to build your future. It's never too late or the wrong time to reassess your business plan and build a new and improved company that offers more, does more, and generates a steady stream of revenue. Look at your strengths, weaknesses, threats, opportunities, assets, people, customers, and marketplace. Look for opportunities and expand your thinking. Your only choice is to answer this question: Do you want to stay busy or make money?

A Child Is Born!

George Hedley — Thu, 04 Jun 2009 05:00:00 -0700

Earn More, Work Less, Live Life! Series #1

Mediocrity Is Not An Option!

by George Hedley

Business owners want their companies to deliver the results they want. Do you know what you want? I'll bet at the top of your 'want' list is more money, more freedom, more time off, more wealth, and more fun! You want to build the best company in your marketplace that makes more net profit than your competitors, has excellent managers who run your company, loyal customers who give you most of their work at your price, allows you to build equity, generates passive income, and gives you several months off every year to enjoy your life.

But do your everyday actions, activities, and priorities deliver what you want? Probably not. Most continue to do the same destructive things which keep you from ever achieving your dreams and reaching your goals. You continue to hire the wrong people for the wrong reasons and don't have a training program to allow them to perform at their best levels. You try to save as much money as possible by controlling every purchase, delivery, and installation instead of focusing and investing in marketing, sales, and building customer relationships. You continue to win business by offering the lowest prices instead of providing more value or services than the minimum required to keep your customers somewhat satisfied. You get projects and tasks completed with your constant supervision, micro-managing, and telling managers and employees what to do instead of utilizing written systems and guidelines for your people to follow. You are the business and won't let go, delegate, or empower people to make decisions without your input or approval.

Is your company mediocre?

Are you really willing to do what it takes to get your business to work the way you want it to? Or are you stuck? Afraid to make a move, unsure what to do, unwilling to try new things, not able to trust your people, and comfortable with mediocrity. Mediocrity is owning a company that makes little or no net profit, competes on price, doesn't have a unique differentiating factor from their competition, and doesn't deliver what the business owner wants. Are you satisfied with being mediocre, average, achieving less than your potential, and continuing to struggle to keep it afloat?

OR, do you want to:

Be the industry leader in your marketplace?
Sell more than low price to win customers?
Make lots more money than your competition?
Have the best people run and manage your business?
Be the owner instead of the overworked boss?
Generate lots of passive income from your investments?
Have plenty of free time to enjoy your family, friends, and fun?

Where are you headed?

Are you really ready to hit your goals, earn more, work less, and live the life you want? It would be crazy to board an airplane without a flight plan or destination. Or try to swim upstream in a rapid rushing river. Or drive a car blindfolded. But this is how most business owners run their companies. They don't have a specific destination or road map to get where they want to go. They work as hard and as fast as they can trying to make headway against all odds. And they don't know where they're going. This causes frustration for the owner, managers, and employees who try to fly faster, make a lot of waves, and go around in circles.

You know what you need? You need something to shoot for. You need a goal. Here's a goal you have been striving to reach for years: Keep doing more! When you keep doing more, you stay busy and never run out of things to do. That's like being capsized in the middle of the ocean aboard a small rescue dinghy and the captain keeps yelling: 'Paddle faster!' Never mind where you're going. Never mind if you'll ever reach land. Just paddle faster until you run out of food, water, or energy. And then you'll die worn out, tired, and broke.

Why do you need specific direction? In order to achieve the results you want, you must know where you are going and why.

"If you don't have specific written targets and goals, you'll never have to admit you're a failure!"

You can continue living the lie, staying busy, and offering excuses about your progress. You've heard all the excuses: 'It's the economy, bad employees, lousy customers, cheap competition, or some other problem out of your control.' Or you can decide to stop making excuses and do something about your condition and future priorities and plans. In order to get your business to work, earn more, work less, and live the life you want, what will you have to do to improve your:

Sales volume
Profit margin
Market Share
Cash-flow
Wealth
Effectiveness

To achieve your targets and goals, you will have to make major changes how you do business and strive to be the best in your market. At FedEx, flawless service is the NORM, not the goal or the exception. Walmart expects NO mistakes from its suppliers! If their suppliers don't make it easier for Walmart, they go elsewhere! To be the best, you'll have to improve your company operations, systems, management, administration, employees, estimating, pricing, marketing, sales, and service. Take a hard look at how your company is doing at your sales, profit margin, market share, cash-flow, wealth, and effectiveness. Do you, your managers, or employees specifically know? What numbers are they aiming at? Numbers tell you how well you're doing. You will need a new set of measurable standards to see if you are improving, on track, and headed towards being the best in your class.

Measure what you want!

Without numbers to track, it's like playing baseball in thick fog. You continue to play ball and try your best. But in the fog, you can't see past first base, where the hits go, or read the scoreboard. This lack of information makes the game rather challenging, perplexing, and dull because nobody knows how they're doing or who is winning or losing. Without knowing the score, what's the point?

Measure what's important to you. Paying your bills, invoicing customers, and keeping your checkbook balanced isn't enough to get ahead or be the best at what you do. In everyday life, you measure your weight, blood pressure, miles per gallon, the Dow Jones average, who won the football game last Sunday, or the dollar amount on your paycheck. What measurement indicators will tell you if your business is on track, serving your customers, achieving your goals, building wealth, or enjoying your life? Here are some numbers to track and indicators which will tell you if you are building an excellent company:

Annual taxable business income & profit
Company Net worth & equity
Personal net worth annual growth
Annual income from investments
Annual company profit margin growth
Sales from new, loyal & repeat customers
Profit from new, loyal & repeat customers
Customer complaints & referrals
Employee turn-over & training
Personal time off & vacation days

Aim at what you want!

Start with what you want to accomplish. The number one stress business owners experience is from not knowing where they're headed. What do you want and where are you headed? Next, how will you achieve your goals? If you depend on hard work to deliver what you want, you're going to be disappointed every time. Then set up a measuring system to keep track of your progress towards your targets.

For example, if you want to increase your net profit margin, there are many things you can do. You can lower your overall cost of doing business, increase your sales, or charge a higher price for the services you offer. At first glance, most business owners focus on cutting costs. This is futile and won't work over the long haul. With lower expenses as your solution, you won't be able to hire better people, add more services for your customers, do the little things that make customers want to give you more work, or help you reach you ultimate goal of more time off or freedom.

The second choice is usually to increase your sales volume by proposing on and winning more business opportunities. Winning more work should increase your total gross profit, but will keep you working at an even faster pace to accomplish the additional projects you have to manage. This is like running on a treadmill faster and faster going nowhere. This won't move you towards your goal of earning more, working less and living the life you want. But it will keep you busier - is busy what you want?

Charge higher prices!

The long term solution to achieving your ultimate goal to earn more and work less is to charge a higher price for your services and products. When you charge higher prices, you will also make higher gross profit margins. This will create more money to spend on an excellent empowered management team and full charge trained employees. It will allow you extra cash to invest on improving your operations, finances, accounting, marketing, sales, and customer service. In order to charge more, you must strive to become the leader in your market. Back to FedEx as an example. They are the market leader and get more for the same service as their competitors.

Your customers must be willing to pay your company more for products or services than your competitors. Therefore you must offer something different than your competition like more value for the same price, a unique different delivery method, or additional value-added services. Take a moment and describe 5 things you can offer customers which will allow your company to charge a higher price than your competitors:

1. ____________________________

2. ____________________________

3. ____________________________

4. ____________________________

5. ____________________________

As an example, a commercial general building contractor can continue to bid projects to developers per plans and specifications and get awarded the contract if they are the lowest responsible bidder. Or they can negotiate the project at higher prices than their competitors if they offer additional valued or unique services. What can this general contractor offer or provide to encourage potential customers to award them contracts at a higher price?

Total development management from concept through completion
Design-build architecture & engineering
Guarantee no plan omissions, conflicts or mistakes
Assist in securing project financing
Find equity investors for the developer
Prepare overall project budget & investment pro-forma
Obtain all City approvals and permits required
Obtain all utility company approvals
Complete interior design services for tenants
Guarantee no change orders
No mark-up on change orders
Guarantee faster move-in & occupancy date
Guarantee no punch-list or defects
Full time superintendent with college engineering degree
Project manager certified in construction management from the Construction Management Association
Project accountant certified from the Construction Financial Management Association
Monthly service for one year on all building components
Site and landscape maintenance for one year

I know what you're thinking. 'We don't get paid for all of those extra services so how can we offer them?' Continue to do business the same way, offer exactly the same as your competitors, and continue to struggle to make any real net profit margin. Is the Ritz Carlton cutting back on services or doing whatever it takes to give the customer more than they expect?

What can you do to charge more?

To offer additional value-added or different services than your competitors takes more intensive customer or project involvement, strong company management, and a better trained staff. But it will set your company apart from your competitors. What do you have to do to be different?

- What five things are most important to our clients?

- How are we doing on each?

- What is the evidence of our performance?

- Do any competitors do it better than us?

- What can we learn from them?

- How can we do things better?

- How can we set our company apart?

Are willing to do what it takes to offer more in-depth value-added services which will get your customers to pay more for you're your company than your competitors?

Develop loyal customers who will pay more!

Another way to differentiate your company is to have incredible loyal customers who deeply trust you and your company. And because of this trust, they know you'll do a better job than any other competitor in the marketplace. Quality customer relationships will cause customers to be loyal and only want to do business with your company. This type of relationship takes time to cultivate and a commitment to spend lots of time with valuable customers. Providing good work will not set your company apart from your competitors as they also try to do a good job. Developing and building trust takes a concentrated systemized effort and program. It requires a written plan and includes dedicating regular time to take customers to lunch, attending sporting events, fishing or golfing, weekend trips, and sending thank-you notes and gifts on a regular basis. To carve out the time to build loyal customer relationships requires you to free up 33% of your time. To do this you'll have to improve your company, management team, systems, operations, and service. Are you willing to do what it takes to build customer relationships in order to increase your profit margin and get what you want?

When your company works and delivers what you want, you feel great. Your company is running on all cylinders. Building your business and making money is easy. Customers want what you offer. Your company doesn't rely on your constant input and direction to deliver a big net profit margin and sales. Your bank account is growing. Your investments are spitting out lots of monthly cash-flow. Your managers and employees are happy and humming. You walk faster and lighter on your feet. You are excited about going to work because you aren't bothered with the little details that bog you down. You have pride in what you do and want to accomplish more. Your family is also happy as they get to spend more quality time with you. And your are living a significant life with extra time to enjoy and money to give back to others. Stop making excuses and settling for less than you can accomplish. Take this challenge to move beyond mediocrity. Do what you must do to earn more, work less, and live the life you want.

Special Offer for May!

Business Is Stimulating!

George Hedley — Thu, 07 May 2009 05:00:00 -0700

There is some good news about this lousy economy. You now have to think about what to do instead of reacting to business that comes your way. I have had to re-think my entire operation, try some new tactics, stop some old strategies that don't work anymore, and start some new services to prepare for the long three to five year recovery. My goal is to make a profit and grow in any economy. What's your goal?

As a result, I have suspended my construction operations to focus 100% on real estate investments and Hardhat Presentations. I have added several new consulting and mentoring programs for business owners, as many need help now more than ever.

I now offer Strategic Planning Facilitation to help companies and Associations determine the direction they want to go and the strategy how to get there. In conjunction, I offer one on one personal Business Coaching to company owners who need some advice and help making those tough decisions that face them today.

Every entrepreneur, business owner and company executive can benefit from a personal board of advisors to make the best decisions possible on how to manage their company. We are currently inviting past clients and qualified companies to consider becoming a part of our new program called Executive Roundtable Groups. Now you can tap into the ideas and wisdom of a small group of fellow business owners and executives in a professionally facilitated ongoing board of directors style setting. By becoming a member of a Profit-Builder Circles Executive Roundtable Group, you'll get together with a group of owners, executives and managers from up to 13 other companies for peer-to-peer accountability, support and direction. Participants can also invite 2 other participants from their company to take part in three 2 day meetings every year. You will work together in a trusting confidential forum and explore how to get your business to work.

If you are interested in any of these programs, email gh@hardhatpresentations.com for the complete brochure and information.

Thanks for the Birthday Greetings!

Turning 60 was a fun week. My wife, Alana, and I spent four great days in the Napa Valley golfing, wining and dining. We had a blast and came home refreshed and excited to get back to helping business owners get their businesses to work. Then she surprised me with a birthday party attended by 45 of my great friends. In April, I spoke to several conventions including the DUCTZ franchisees and the Pacific Southwest Distributors Association. I also had the privilege to speak to over 200 Terrazzo and Tile contractors at their national convention. These guys know how to celebrate! Then I kicked off the National Wood Floor Association in Long Beach, California and presented to over 400 hard working entrepreneurs. You can't believe all the types of new wood flooring available today.

BOOK NEWS!

My new book is at the printers and should be at the bookstores by June 1, 2009!

I hope you have pre-ordered your copy from Amazon.com

Available at Amazon.com
Only $16.47

Regular Price $24.94

Earn More, Work Less, Live Life! Series #1

Mediocrity Is Not An Option!
by George Hedley

Is your company mediocre?

OR, do you want to:

Be the industry leader in your marketplace?
Sell more than low price to win customers?
Make lots more money than your competition?
Have the best people run and manage your business?
Be the owner instead of the overworked boss?
Generate lots of passive income from your investments?
Have plenty of free time to enjoy your family, friends, and fun?

Where are you headed?

Why do you need specific direction? In order to achieve the results you want, you must know where you are going and why.

"If you don't have specific written targets and goals, you'll never have to admit you're a failure!"

Sales volume
Profit margin
Market Share
Cash-flow
Wealth
Effectiveness

Measure what you want!

Annual taxable business income & profit
Company Net worth & equity
Personal net worth annual growth
Annual income from investments
Annual company profit margin growth
Sales from new, loyal & repeat customers
Profit from new, loyal & repeat customers
Customer complaints & referrals
Employee turn-over & training
Personal time off & vacation days

Aim at what you want!

Charge higher prices!

1. ____________________________

2. ____________________________

3. ____________________________

4. ____________________________

5. ____________________________

Total development management from concept through completion
Design-build architecture & engineering
Guarantee no plan omissions, conflicts or mistakes
Assist in securing project financing
Find equity investors for the developer
Prepare overall project budget & investment pro-forma
Obtain all City approvals and permits required
Obtain all utility company approvals
Complete interior design services for tenants
Guarantee no change orders
No mark-up on change orders
Guarantee faster move-in & occupancy date
Guarantee no punch-list or defects
Full time superintendent with college engineering degree
Project manager certified in construction management from the Construction Management Association
Project accountant certified from the Construction Financial Management Association
Monthly service for one year on all building components
Site and landscape maintenance for one year

What can you do to charge more?

- What five things are most important to our clients?

- How are we doing on each?

- What is the evidence of our performance?

- Do any competitors do it better than us?

- What can we learn from them?

- How can we do things better?

- How can we set our company apart?

Are willing to do what it takes to offer more in-depth value-added services which will get your customers to pay more for you're your company than your competitors?

Develop loyal customers who will pay more!

George's Birthday Gift for You

George Hedley — Thu, 02 Apr 2009 05:00:00 -0700

George turns 60 on April 22 and I want a 60th birthday gift from you!

I need to ask you a BIG favor. My new book entitled:

"Get Your Business To Work!"

- 7 Steps to Earning More, Working Less and Living the Life You Want"

Available now for pre-order at amazon.com

It is scheduled to be published and at the bookstores in June 2009. To boost sales, move it up on the ranking, and help it become a best-seller. I need to get as many pre-orders as I can. That is where you can help me and give me a nice 60th birthday gift!

If I have ever helped or given you at least $16.47 worth of advice or ideas, please do me the favor of pre-buying my new book. As you can imagine, the higher on the best-seller list books are, the more they sell. People want to buy what's hot. So you can help me get hot!

NOW AVAILABLE TO PRE-ORDER

Available at Amazon.com

Only $16.47

Regular Price $24.94

If I sound like I am begging, I am. My entire speaking and coaching business is built on referrals from the people I help. So if I have helped you, please help me by recommending my book to your associates, friends, and other business owners. Thanks in advance!

Get Your Business To Work (#12)

How Entrepreneurs Profit During Slower Times
by George Hedley

True Or False: The recent elections will not help your business in the near future? The slower economy is here to stay for at least one or two years? Your business must change or die a slow death?

So, how are you doing? How's your business, cash-flow, stress level, and personal life? The economy got you down? Do you feel slightly out of control? Or wish things would get better sooner rather than later? Are you working harder than ever, but can't get ahead? Do you think there must be a better way? Don't know what to do next? Do you feel like you are treading water waiting for something to happen?

In a slower market, when you continue to do what you've always done, you'll find it eventually doesn't work and won't deliver the same results you are used to achieving. So it's time to let go of your past and face the fact that the future will be different. And only the nimble, quick, and strong will be successful. Look at the car manufacturers trying to change their business plan. Too late. It's over for them as they knew it for 50 years or more.

Survival is bad!

I have a real estate broker who has a sign on his desk: "Survival = Success!" Is survival your goal? Are you in business to survive? Are you in business to make little or no money, not grow, keep the doors open, keep your crews busy, and spend all of your savings waiting for the economy to turn around?

You must change how you do business to thrive in the years ahead. Golfers know what 'mulligans' are. They are second chances to re-hit your shots. But in the real world, you don't get a second shot. Every day you face the reality of the slow economy and tough business climate. Either improve your swing and try something new, or continue to hit your shots into the rough and your score won't improve. The booming economy handed out lots of mulligans when many companies delivered average performance and poor results. It gave them a second chance with their customers and contractural requirements. But now companies won't get any mulligans for a long time. This is the real deal, no "take-overs"! You must get it right every time the first time. Welcome to the PGA tour where you can't rest on your past performances to pay your bills today and keep you at the top of the money list.

To thrive, will you work harder, work smarter, work more, get organized, get in control, try new ideas, or work different? To do business differently, you'll have to improve how you do business and change how you work with your customers, implement your marketing plan, deliver your projects, and elevate your level of quality and service.

Change = growth = improvement!

Remember when you learned something new like ride a bike or learn the computer? It was hard and caused you some pain. But with training and diligence, you succeeded. And now these tasks are like second nature and easy. Change is good and allows for growth and improvement. Without change, nothing new happens, you stay put, and go backwards.

Do you have to change? The old way still works, doesn't it? YES, you have to change! I know you don't like to change. You want the economy to go back to its old steady ways. But I'm sure your goal is not to strive for stability. Today, change is the norm. Change is not something that happens to you. Change is what you must do to continue to make a profit, grow your business, and expand your customer base.

In the old days, you only had to make one or two changes every few years. Like buying a new adding machine, upgrading your typewriter to an electric model, buying a fax machine, changing from a yellow pad and pencil to a computer spreadsheet, changing from a dot matrix to laser printer, moving from Lotus 123 to Excell, buying a new pickup truck, adding a laser screed to your concrete tools, or attempting to use email to communicate.

As a part of your ongoing business management role, what do you do to plan for change, make change happen, and force change to happen? The companies who wait for something to happen die off. Look at Sears. Their leaders never thought their business model would ever need to change. They hoped Wal-Mart would never catch on. To date, they still struggle to get back the market share and customers they lost while waiting and doing nothing new or different. How would you have liked to be a steel golf spike manufacturer hoping soft-spikes didn't sell? You would now be broke and without a company.

The second part of changing how you do business is to have a pro-active plan to stay ahead of your competition and abandon your old ways of doing business. Ask yourself: "What leadership decisions should you make, but you won't? Why not? What are you waiting for?" You have some tough calls you need to make right now:

Do you have a customer you need to fire?
Where are you wasting money?
How can you be more efficient?
What improvements are needed with your staff?
Is there a faster way to complete your projects?
What can you delegate or let go of?
What should you stop doing?
What should you start doing differently?
What areas should you improve or change now?

___Customers	___Personnel
___Management Team	___Training
___Quality workmanship	___Service
___Scheduling	___Sales & Marketing
___Estimating	___Technology
___Subcontractors	___Suppliers
___Productivity	___Financial Systems
___Operational Systems	___Field Systems
___Project Management	___Equipment
___Banking	___Bonding
___Insurance	___Your Paycheck

Change your view!

You can't get better and improve by spending time talking to the same 5 to 10 people for 5 to 10 years in a row. You have to change your view. Get up, get out, and go see new people, markets, cities, customers, and companies. Your goal is to learn and experience new ideas and ways to do business. Read new books, different magazines and hang out with different people. A new outlook will get you moving.

When you are stuck in the same place, it's hard to get unstuck. Most people don't realize they are stuck. Are you stuck? Year after year you:

Call on the same 10 customers.
Bid the same project types.
Use the same proposal format.
Use the same subcontractors & suppliers.
Use the same software.
Keep making the same excuses for the same employees
Use the same tools & equipment.
Use the same bonus & pay system.
Use the same marketing program.
Use the same sales system.
See the same people in the same places.
Drive to and from work the same way.
Try to make a profit by selling low price.
Listen to the same complaints, all day, every day, over & over.

Treading water?

When you're stuck, the problem with most people is they don't know where to start. They continue to tread water, stay frustrated and paralyzed, and can't make decisions about what to do first with their sinking situation. I played water polo in high school and college. In water polo, like most team sports, the team that wins usually takes the most shots, has the most unique plays and uses different ones often, has the best players and changes them often when they aren't performing, has the best strategy and changes it often, outplays their opponents with different techniques, and always keeps moving. Winning teams don't just tread water and wait for something to happen.

As long as I can remember, I wanted to be an entrepreneur. I always wanted to start my own company, be my own boss, and make it on my own. Entrepreneurs are different than most people. Entrepreneurs are builders, risk takers, and make things happen. They are creators, always growing, and looking for new opportunities. Entrepreneurs are always on the move, trying new things, and don't get stuck in the same place doing the same things. They never tread water waiting for something to happen.

Entrepreneurs know what they want and have a clear picture of what they want to happen. They have written plans to achieve their goals. And they always track and make progress towards what they want. Say you want to build a house. You hire an architect to get the process started. What's the first question the architect asks you? 'What do you want?' To build and grow your business over the next several years, what do you want and need to do to make it happen? What will you have to do to make it happen?

Why companies fail?

The number one cause of small business failure is when the owner doesn't make the necessary changes required to build and sustain a successful company. They continue to tread water and do business the same way they always have. What do entrepreneurs do when they face tough times and need to make some big changes? They do something! Anything! They try new ways and work different. They start moving and call the necessary plays to win in any environment.

You have to make tough decisions. When one of your subcontractors asks to get paid for the 27th time without a signed change order, give him the right answer: "NO!" When your project manager is over-budget again, replace him with the right person. When one of your 20 year superintendents doesn't fill out his timecard correctly for the 8th year in row, give him one last warning to do it right or don't come back. When a family member employee isn't cutting it, do the right thing and let them go. When your estimator makes another mistake on the bid, replace him with the right person and the right software. When one of your long time customers doesn't pay you on-time again, tell them never again and start looking for the right customers for you. When your accounting manager gives you the monthly financial statements four months late again, find the right controller who will do the right job. When you catch one of your employees lying to you or stealing time or money, eliminate them and find the right people.

You have some choices to make. You can ignore reality and continue to tread water by sitting and waiting for "it" to change and hopefully get better. Or you can make a decision to work differently. In other words, be an entrepreneur and get back to building, or do nothing and hope for change. Here is a small list of 15 changes you can make to 're-entrepreneur' your company:

1. Preserve cash now!

Postpone purchases except those which will make you money. Invest in marketing, your website, sales, and customers.

2. Cut overhead now!

Hold a contest for your employees to find ways to cut your overhead by 25%.

3. Keep the best & fire the rest!

Now is a good time to get rid of your poor performing employees or those with bad attitudes. You can easily find great replacement people who want to do an excellent job.

3. Control job costs now!

Hold an all field meeting and ask for money saving ideas. Reward the best ideas with an incentive. Have them think about your general conditions, labor costs, productivity, safety, and schedule.

4. Get out of debt now!

Meet with your banker and work out a plan to pay off all of your high ticket loans. The interest rates are now lower. So consider consolidating all of your loans into one low cost payment plan.

5. Cut equipment costs now!

Get rid of every piece of equipment you own that doesn't make you a profit every month. If you haven't used it in weeks, sell it now. You can always rent equipment when you need it.

6. Subcontract more now!

Why keep extra crews sitting around waiting for the next job. Make a deal with another competitor to share your crews to keep your costs lower.

7. Add profit centers now!

What can you do to expand your business? A roofing contractor started a pallet company and now does over $1,000,000 in pallet sales.

8. Add new project types now!

To grow you must expand your project types. Go out and land some new work in new territories and project types.

9. Buy real estate now!

Seek opportunities to turn your built-up cash reserves into wealth building investments. Start buying a small rental property you can fix up with your expertise and crews.

10. Seek better subcontractors & suppliers now!

The slow down gives you the time to find better subcontractors and suppliers who will give you better service and lower prices. Do it!

11. Get close to customers now!

Go and visit your top 20 customers this month. Take them to lunch or to a ball game. Get to know them better. Ask them how your company can offer more services to get more of their work.

12. Find new customers now!

Make it your urgent goal to find at least ten new customers in the next 3 months.

13. Offer more services now!

What else can you offer your customers to get more of their work? Consider design-build, pre-construction services, total team approach, partnering, maintenance, build-to-suit, joint ventures, asset management.

14. Bid more work now!

You will need more work to keep your total profit margin at the same level. Gear up to bid at least 33% more projects.

15. Have more fun!

Make a decision to stop whining and complaining about the economy, the market, your competitors, your customers, the President, or your current situation. Be positive. Look for the good in everything. You attitude is your choice. Choose to be happy.

Are you acting like an entrepreneur?

When you look at successful businesses and how they succeed in good times and bad, you will notice that they are focused on building their business. They focus on hitting their numbers, making a profit, increasing their stock price, purchasing or investing in new markets, seeking joint ventures, growing their revenue, finding new customers, buying new businesses, developing strategic alliances with other companies, or finding new business ventures.

Today is a great time to approach struggling competitors and ask if they would consider joining their company with yours. The strong will survive. Why not take advantage of the opportunities right in front of you and do something to be successful?

Hardhat Hedlines

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