7/23/2020 COURSE OBJECTIVES WHAT WILL BE ACCOMPLISHED: WAYS TO OPERATE A SUCCESSFUL CONSTRUCTION BUSINESS LEARN THE KEY AREAS FOR A SUCCESSFUL BUSINESS LEARN THE IMPORTANT TOOLS FOR YOUR CONSTRUCTION BUSINESS AND HOW IT CAN MAKE YOUR BUSINESS GROW HOW TO ADD VALUE AND BETTER ACHIEVE YOUR VISION 1
7/23/2020 SECTION 1: LAYING A FIRM FOUNDATION TO BE SUCCESSFUL YOU MUST: • BUILD A FIRM FOUNDATION • ASK YOURSELF, “WHY DID I START A CONSTRUCTION COMPANY?” • UNDERSTAND CONSTRUCTION TAKES HARD WORK • MUST ASK YOURSELF, “WHAT GOALS DO I HAVE?” 2
7/23/2020 ADVISORS & GUIDANCE RESOURCES • SEEK ADVISORS WHO HAVE GONE DOWN THE ROAD BEFORE • FIND A MENTOR (HBA, ABC-CAROLINAS, CAGC, NCBPA, SCORE, ETC.) • ASK QUESTIONS,” A SUCCESSFUL FIRST STEP IS ALWAYS PRECEDED BY GREAT QUESTIONS” – LAO TZU • THE 5 W’S AND AN H. -WHY -WHEN -WHAT -WHO -WHERE -HOW THE HARD Q’S - INTROSPECTION ASK YOURSELF HARD QUESTIONS BEFORE YOU INVEST AND TAKE THE RISK: --WHY AM I TAKING THE RISK? --WHAT ARE MY GOALS? WHAT PRICE AM I WILLING TO PAY FOR SUCCESS? --WHERE WILL MY WORK COME FROM? --WHEN IS THE BEST TIME TO START THE BUSINESS? --WHO ARE MY CUSTOMERS? WHO ARE MY ADVISORS? --HOW WILL I MARKET MY COMPANY? HOW WILL I SUPPORT MY FAMILY WHILE THE COMPANY GETS STARTED? 3
7/23/2020 BUILDING A FIRM FOUNDATION • CREATE A LIST OF POTENTIAL POSITIVE AND NEGATIVE RESULTS TO YOUR COMPANY. • SEEK HELP WITH SOMEONE WHO HAS DONE WHAT YOU WANT TO DO – A MENTOR, A COACH. • BUILD RELATIONSHIPS WITH KEY ADVISORS – DON’T GO IT ALONE! CHOOSE QUALITY ADVISORS THAT INCLUDE: • A BANKER • AN INSURANCE AGENT • A LAWYER • AN ACCOUNTANT BUILDING A FIRM FOUNDATION – CONTINUED • ASSOCIATE WITH OTHERS WHO ARE ON THE SAME PATH—ONE OF THE BEST WAYS TO DO THIS IS TO GET INVOLVED WITH YOUR INDUSTRY’S TRADE ASSOCIATION. • READING RESOURCES—THERE CAN BE A LOT OF DOWN TIME DRIVING BETWEEN SITES AND WAITING ON SUBCONTRACTORS. LISTEN TO AUDIOBOOKS OR HAVE YOUR DEVICE READ A BOOK OUT LOUD TO YOU SO THAT YOU MAY CONTINUE COMPLETING OTHER TASKS. 4
7/23/2020 SECTION 2: CARVING OUT YOUR NICHE -SMALL BUSINESSES THAT FIND A NICHE AND SPECIALIZE ARE MORE SUCCESSFUL THAN THOSE THAT DABBLE IN A BIT OF EVERYTHING -AVOID THE TEMPTATION TO BE A JACK OF ALL TRADES… SPECIALIZATION IMPROVES PERFORMANCE AND PROFIT • COMPANIES START OUT DOING ANY TYPE OF WORK. • GROWTH WILL FORCE A FOCUS. • GROWTH WILL OCCUR EACH TIME A TYPE OF WORK IS TRIMMED DOWN. • THERE IS A FINE BALANCE BETWEEN TRIMMING THE WORK AND HYPER-FOCUSING ON A CERTAIN TYPE OF WORK. 5
7/23/2020 OPPORTUNITY COST • SAYING YES TO ONE THING REQUIRES YOU TO NO TO SOMETHING ELSE • WHEN YOU SAY “YES” TO EVERYTHING YOU MAY BE SAYING “NO” TO MORE PROFITABLE WORK • BUILDING A NICHE REQUIRES YOU TO SAY “NO” TO WORK EVEN WHEN THE TEMPTATION IS THERE TO TAKE THE WORK THAT FILLS THE SCHEDULE • OPPORTUNITY COSTS EXIST WHEN SOMETHING IS LIMITED IN A NEW START-UP THIS CAN BE CASH OR MORE LIKELY THE OWNERS TIME “WE ARE ALL EXPERTS IN OUR OWN LITTLE NICHES.” – ALEX TREBEC 6
7/23/2020 HOW DO YOU DETERMINE YOUR NICHE? • BEGIN BY ASKING YOURSELF THESE QUESTIONS. GIVE HONEST ANSWERS AND AVOID TRYING TO FIND A REASON WHY YOUR IDEA WILL WORK. -WHERE ARE YOUR UNIQUE SKILLS OR TALENTS IN YOUR PARTICULAR TRADE? -IS THERE A LOT OF DEMAND FOR YOUR UNIQUE SET OF TALENTS? -WILL THAT DEMAND CONTINUE OR IS IT FADING? -ARE THERE A LOT OF OTHERS COMPETING FOR THE SAME MARKET? -IS THE DEMAND SEASONAL? TOOLS TO HELP YOU TO CARVE YOUR NICHE • FIND A MENTOR – FIND THOSE WHO WILL SHARE THEIR SECRETS AND HELP GUIDE • FIND A COACH – A BUSINESS COACH WHO CAN ASSIST YOU AND FIGURE OUT IF YOU SHOULD TAKE ON A PROJECT • TRACK PROFITABILITY – WHEN YOU START YOUR BUSINESS YOU WILL TAKE ON VARIOUS TYPES OF WORK • TRACK YOUR EXPENSES (JOB COST) AND COMPARE THEM AGAINST THE JOB BUDGET (ESTIMATE). • DETERMINE YOUR MOST PROFITABLE JOBS AND FOCUS YOUR EFFORTS ON GETTING MORE OF THAT WORK. 7
7/23/2020 TOOLS TO HELP YOU TO CARVE YOUR NICHE - CONTINUED • SHARE YOUR TALENTS AND SKILLS – FREELY SHARE YOUR FOCUS IN BUSINESS WITH ANYONE WHO WILL LISTEN THIS IS #1 IN EXPANDING YOUR COMPANY. • DEDICATE YOURSELF TO LEARNING – NEVER STOP LEARNING! QUESTION #1 DOES SPECIALIZATION IMPROVE PERFORMANCE AND PROFIT? o TRUE o FALSE 8
7/23/2020 QUESTION #1 – ANSWER DOES SPECIALIZATION IMPROVE PERFORMANCE AND PROFIT? o TRUE o FALSE TRUE IS THE CORRECT ANSWER SECTION 3: CREATING A BLUEPRINT FOR YOUR BUSINESS YOU WOULD NOT BUILD A BUILDING WITHOUT A BLUEPRINT – MAKE SURE YOU HAVE A PLAN FOR BUILDING YOUR BUSINESS 9
7/23/2020 FAILURES IN PLANNING LEADS TO FAILURES IN BUSINESS CONTRACTORS HAVE MADE MAJOR MISTAKES WHICH IMPACT THEIR BUSINESS: • WORK DONE ON THE WRONG HOME. • FAILING TO REACH OUT TO ONE-CALL SERVICE BEFORE DIGGING. • NOT SETTING THEIR BUSINESS UP IN A WAY TO PROTECT THEIR ASSETS. • SHRUGGING OFF LICENSING AND INSURANCE REQUIREMENTS. CREATE YOUR BLUEPRINT THROUGH YOUR BUSINESS PLAN • MISSION STATEMENT • WHY ARE YOU STARTING THE COMPANY? • PRODUCT DESCRIPTION • DESCRIBE YOUR NICHE/HOW YOU ARE DIFFERENT? • YOUR COMPETITION • WHO ARE YOU COMPETING AGAINST? • YOUR TEAM • WHO IS GOING TO TAKE CARE OF THE VARIOUS DEEMED RESPONSIBILITIES? 10
7/23/2020 CREATE YOUR BLUEPRINT THROUGH YOUR BUSINESS PLAN - CONTINUED • MARKETING/ADVERTISING • HOW ARE YOU GOING TO FIND NEW WORK? • FINANCIALS/ACCOUNTING • WHAT DO YOU EXPECT TO DO IN REVENUE/PROFIT THE 1 ST TWO YEARS AFTER YOU HAVE DESIGNED YOUR PLAN? • SUMMARY • HERE IS YOUR CHANCE TO ADD ANYTHING ELSE TO THE DISCUSSION, ESPECIALLY IF YOU ARE LOOKING FOR INVESTORS. SECTION 4: BUILDING YOUR BUSINESS TOOLBOX THERE ARE 8 AREAS TO PROFIT AND SUCCESS IN CONSTRUCTION 11
7/23/2020 AREA 1: BUSINESS MANAGEMENT • BUSINESS OWNERS MUST KNOW: • MICRO-MANAGING EMPLOYEES • ASSIGNING JOBS AND TASKS TO EMPLOYEES • WHERE THEY HAVE BEEN, • WHERE THEY ARE RIGHT NOW AND… THAT THEY ARE NOT CAPABLE OF COMPLETING WHERE THEY ARE HEADING • NOT WRITING DOWN OR COMMUNICATING • WHAT ARE THE COMMON BUSINESS CLEAR GOALS • AS THE OWNER FAILING TO CONTINUE TO MANAGEMENT AND LEADERSHIP MISTAKES? LEARN AND GROW IN YOUR PROFESSION. • FAILING TO PUT IN PLACE SYSTEMS AND PROCESSES SETUP CLEAR GOALS USING SMART SMART – GOALS NEED TO BE UNDERSTOOD BY YOUR TEAM IN ORDER TO BE ACHIEVED - S - SPECIFIC -M - MEASURABLE - A – ATTAINABLE - R – REALISTIC - T – TIME SENSITIVE 12
7/23/2020 KEY SYSTEMS AND PROCESSES TO ESTABLISH EARLY ON • REGULAR ADVISOR MEETINGS • SET ASIDE TIME FOR SELF- REFLECTION • DOCUMENT EVERYTHING AREA 2: INSURANCE AND RISK MANAGEMENT • THE STEPS IN BUILDING A BUSINESS INCLUDE RISK – BUT IT DOES NOT MEAN IT HAS TO BE RISKY • “PLAYING SAFE IS VERY RISKY.” – SETH GODIN • EVERYTHING WE DO HAS RISK. DRIVING TO WORK IS RISKY. LIFE IS FILLED WITH RISK • THOSE WHO SUCCEED LEARN HOW TO RECOGNIZE RISK AND THEN MANAGE IT 13
7/23/2020 COMMON INSURANCE AND RISK MANAGEMENT MISTAKES • NOT SETTING UP A CORPORATE ENTITY TO LIMIT PERSONAL LIABILITY • FAILING TO SET UP A COMPANYWIDE SAFETY PROGRAM • ESTABLISHING POLICIES FOR THE COMPANY RELATED TO SAFETY AND RISK MANAGEMENT • UNDERESTIMATING THE RISK EXPOSURE AND CHANCES FOR LOSS. • NOT CARRYING SUFFICIENT INSURANCE WITH LIMITS AND COVERAGES FOR YOUR BUSINESSES. RECOGNIZE THE SOURCES OF RISK • EMPLOYEES • CUSTOMERS • WEATHER • SUBCONTRACTORS • CONSTRUCTION DEFECTS • MATERIAL SUPPLIERS • AUTOMOBILE 14
7/23/2020 WHAT BUSINESS OWNERS CAN DO ABOUT RISK FOUR THINGS TO MANAGE YOUR COMPANY RISK: DECLINE THE WORK THAT IS CREATING RISK ENGINEER THE SOURCE OF THE RISK TO REDUCE YOUR EXPOSURE TRANSFER THE RISK TO SOMEONE ELSE—HOLD HARMLESS CLAUSES / INDEMNIFICATION RISK THAT REMAIN NEEDS TO BE INSURED INSURANCE – DISCUSS YOUR BUSINESS WITH YOUR INSURANCE AGENT • DON’T OVER INSURE AND BECOME INSURANCE POOR. • TYPES OF COVERAGES: • WORKERS COMPENSATION – COVERS WORK RELATED INJURIES TO EMPLOYEES. • GENERAL LIABILITY – PROVIDES GENERAL INSURANCE FOR LOSSES FROM OPERATIONS. • AUTOMOBILE LIABILITY – INSURANCE FOR VEHICLES OWNED BY THE COMPANY. • POLLUTION LIABILITY – PROVIDES COVERAGE FOR POLLUTION RELATED LOSSES. (ESSENTIAL FOR ABATEMENT COMPANIES) 15
7/23/2020 AREA 3: MARKETING & BUSINESS PROMOTION MARKETING AND BUSINESS PROMOTION IS KEY TO A SUCCESSFUL BUSINESS. IT CANNOT BE AN AFTERTHOUGHT – ONLY AFTER THE WORK RUNS OUT. QUESTION #2 DOES WORKERS COMPENSATION COVER WORK RELATED INJURIES TO EMPLOYEES? o TRUE o FALSE 16
7/23/2020 QUESTION #2 – ANSWER DOES WORKERS COMPENSATION COVER WORK RELATED INJURIES TO EMPLOYEES? o TRUE o FALSE TRUE IS THE CORRECT ANSWER COMMON MARKETING AND BUSINESS PROMOTION MISSTEPS • TRYING TO DO TOO MUCH WITH TOO LITTLE. • MARKETING TO AN AUDIENCE THAT IS TOO WIDE • FAILING TO DEVELOP A UNIFIED MESSAGE OR A UNIQUE VALUE TO THE MARKETPLACE • WHY SHOULD SOMEONE BUY FROM YOU? • FOCUSING TOO MUCH ON GETTING THE NEXT JOB BUT FAILING TO WORK HARD TO EXCEED THE EXPECTATIONS OF AN EXISTING CUSTOMER. 17
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