With today’s pressure to do more with less, how can you get it all done? Where do you start?  Using technology and computers, creating a website, training, finding good help, getting paid, dealing with customers, getting bids out, keeping up-to-date with code, chasing lien releases, dealing with government regulations, handling cash-flow and payroll, ordering materials, meeting with subcontractors, negotiating contracts, checking field measurements, coordinating crews and keeping jobs on schedule. How do you get it all done and still have time to focus on your priorities?

The year was 1985 and I was trying to get my business to work. I had six people on my management team, ten project managers, twenty-five field superintendents, and seventy-five men on our tilt-up concrete crews. My goal was to have a profitable company run by my employees. But I was still trying to do too much myself and make every important decision. I continued to work with my estimators on every bid, presented every proposal, attended every job meeting, supervised every concrete pour and was too involved in every aspect of our business. I even got involved in the little decisions like purchasing office equipment, hiring, firing, tools, change orders and buying coffee for the office staff. Sound familiar?

Is It Easier to Do It Yourself?

No matter how hard I tried to let go and delegate, I just couldn’t. It was easier to do it all myself than to trust my people. My actions drove me nuts and my employees crazy. It became difficult to get good people to stay at our company as I was micro-managing and trying to control their every move.

One evening I took my family for a “happy” meal at McDonalds. I noticed the boss wasn’t there, the employees were teenagers, customers were happy and the food was consistent and relatively edible. I thought: “How do they do it without the owner supervising and making every decision?” I asked a server to show me their secret. He took me behind the counter where they have pictures clearly displaying how to build hamburgers and other menu items.

Good People or Good Systems?

Wow! A huge company runs smoothly using simple pictures of the finished product. This guarantees consistent quality. Plus the owner doesn’t have to be on-site all the time supervising the construction of every customer’s order. If McDonalds could do this in their company, why couldn’t I do it in mine and build an organized and systemized operation. Systems would reduce my dependence on finding great people.

Systems Are the Key!

I started to understand and realize that systems are the key to building an excellent company. A disorganized company controlled by the owner will never become excellent. Systems allow you to produce the same results on every project every time. Systems will get everyone doing business the same way. You won’t have one superintendent handling change orders one way and another doing them differently. Systems will insure little things are taken care of without you reminding people to do them the way you want them done. Systems will allow you to focus on the important tasks that will make you the most money. Systems allow you to deliver consistent results to your bottom-line and your customer’s project requirements every time without you being there and making every decision for your people.

As a construction business owner, you want to count on the same things every time on every job. You don’t want to rely on great people to remember what you tell them to do. Whether it’s pulling rebar into the center of a slab during a concrete pour, starting a project correctly, or handling change orders or timecards properly, you want everyone on your crews and in the office doing things the same way in your company. Systems are the only solution to get your company where you want it to be.

Imagine you owned or managed the perfect construction business.
What would it be like? In my perfect business, I would come into the office two or three days a week; check-in with my managers; review their projects and progress; give them some encouragement and direction; call a few loyal customers and take them to lunch; check on my real estate developments and investments; and make lots of money. Then, spend my free days golfing, sailing, traveling with my wife and all the other fun stuff I like to do! What do you think? Work a little and make a lot!

This is what I call an “On-Purpose…On-Target” business. Your business and your money works for you. You are an owner, not a hands-on, make-every-decision, over-worked and under-paid supervisor and worker.

What Do Business Owners Want?

I’ll tell you what I want-I want my business to give me what I want! I want my business to be:

•     100 percent run by my management team
•     A great place to work that attracts the best employees
•     A company built on long time repeat loyal customers
•     A business that makes double the industry average profit
•     A company that grows my equity and building wealth
•     An environment that creates lots of freedom and fun

What Do You Want?

You don’t want a business that barely makes it-struggles, has cash-flow problems, doesn’t allow you to have any time off and doesn’t build your net worth. It took me nearly twenty years in business to finally understand. My business is a tool to give me what I want-wealth. Wealth is money and what it does for you. Money gives you time, energy, freedom and funds to use as you want-to help others; to use for your family, your employees or your community. As a business owner, to achieve wealth, you have to build a business that works and eventually creates financial independence. Your money must work for you. You should not be working for enough money to stay alive. Wealth is freedom! It gives you choices and allows you to enjoy your business and personal life.

Most business owners never become “wealthy” because they don’t sit down and clearly write out what they want. But they do know they want something different than they are getting now! So, today you have an opportunity to figure out what you want and then build a business to deliver exactly what you desire.

The Purpose of Your Business is to Give You What You Want!

The purpose for your business is not to make you miserable, consume all your time, whine about your employees, hate your customers and have financial stress. Most construction business owners shoot for “MORE”-more sales, jobs, customers, profit or more of the same. “MORE” is what I call the “UN-TARGET”-wanting to be HUGE. The busier you get, the more uncomfortable you are as you get used to being stressed out. This business owner chases bad business, says “yes” too often, is too optimistic about the reality of their situation, and has no clear plan or goals.

Successful business owners know what they want and decide what’s important. Take a few moments to write what you want:

•     Personal
•     Business
•     Financial
•     Operational
•     Customers, marketing and sales
•     People and leadership
•     Equity and wealth
•     Freedom and fun

The Entrepreneur’s Journey

After graduating with a degree in engineering, I worked four years as a civil engineer and construction project manager. Like my father, I had the entrepreneurial spirit and wanted to be my own boss, but I had no clue how to run a business. In 1977, I decided that starting a construction company would be easy-bid cheap and stay busy! At twenty-seven years old, I had four years experience, $2,000 in the bank, just bought my first home and construction was in a recession. Perfect timing to start Hedley Construction! Besides, I already owned all the tools required to be a success in construction-a contractor’s license; a used orange Datsun pickup truck with 92,000 miles, a metal tool box and lumber rack; a golden lab retriever; a ten gallon ice chest; a big radio; a new hard hat with my name engraved on it; and a thirty foot contractor’s power lock tape measure.

I recently overheard a contractor bragging about how he could gain a cost advantage over his competition. It caught my attention, so I listened.

It seems that in his bidding practices, the contractor priced materials and equipment that were not approved in the specifications. To avoid giving away the bidding advantage to his competitors, the contractor decided not to request these items to be approved in the bidding period. After he was designated the low bidder, the contractor planned to press for the materials to be substituted for the specified items.

A few things come to mind. First, this contractor was not bidding on the project scope the owner wanted. If you assume the owner is knowledgeable, the materials and equipment were selected for a specific reason. Therefore, the bid without approved substitutions is subverting the owner’s intent and the designers’ specifications.

Second, there is customarily a provision in the bid documents stating that substitution requests must be submitted prior to the bid so that the materials can be evaluated. If a substitute is determined to be an equivalent, then all bidders are notified. This tactic allows the competition to bid based on the same knowledge and enables the owner to decide on the best pricing or most suitable contractor based on the same scope of work.

Companies that use the bid approach about which the contractor boasted will cost the owner more money in the long run. Bidders that short-circuit the specifications are taking something of value from the owner. If the owner wants to use Product X to meet Specification Y, that is the owner’s decision.

If contractors want a substitute product to be considered, there is a mechanism to get that done; however, shrinking bid periods, pride of authorship and other factors cause project members to ignore the mechanism. In fact, many owners don’t realize the bid period is the most cost-effective time to allow for substitutions. When the mechanism is used, the contractor can re-approach, after the bid, the designer and owner about the substitution.

Cheating on the specified materials and quality of work is not a competitive advantage. It’s cheating.

Competitive advantage resides in the means and methods used to achieve the results the owner and architect or engineer have set out in the plans and specifications. Generally speaking, the contractors—and their estimators and project management personnel—are the most knowledgeable people regarding the means and methods on any given project.

During the bid period, if a competitive advantage develops, the smart contractor will price out the customary or conventional process and evaluate it against a so-called unconventional process. If there is a savings to be had, the pricing structure and the contractor’s bid can reflect this. The contractor may take half the cost difference as a “risk-reward” amount to add back to its profit margin.

SHORT

In my bidding, I have been “beat’” by others using this type of competitive advantage. In one case, the successful bidder used a work week with fewer overtime hours than the number we had anticipated. The successful bidder saved on direct labor cost for each hour and gained in overall productivity. The owner received the same project, specified at a lower cost, than the other bidders would have provided. This competitive advantage comes from innovation, and innovation comes from experience and creative, critical thinking.

Unfortunately, the bid-period mechanism relies on all parties knowing their responsibilities. Not that long ago, contractors had staff estimators and bid managers who knew how to evaluate all subcontractor bids for all disciplines. Estimators knew their obligations by reading the plans and specifications, and management listened. Designers knew how to draw the details of the project, not just refer to a code. Owners knew about the construction process or had a construction manager who did, and construction managers knew how to develop bid packages and proper bidding methods to get the best bids.

From owner to designer to contractor to subcontractor to vendor to everyone else, the whole industry needs to remember that innovation is just a by-product of experience and knowledge. Perhaps innovations are just rediscovered good business practices.

Don L. Short II is president of The Tempest Company, which provides estimating, scheduling, project controls, consulting and expert services, including arbitration services. He can be reached at donshort@tempestcompany.com.

According to the U.S. Small Business Association, roughly 50% of all businesses fail within their first year. There is no shortage of “Top Ten Reasons Why Businesses Fail” lists so I won’t go into that here, and I’m sure you could name many of the main culprits—poor management, lack of capitol, insufficient marketing, flawed business plan, etc.—without having to run a search or buy a “How to Succeed in Business” book. What I will talk about is how to avoid the common (and sometimes harder to find) missteps, mistakes, and missed-the-boat opportunities that can determine if your company sinks or swims.

If you’re one of the “lucky” ones who makes it to Day 366, don’t think for a nanosecond that you’re out of the water and are now one of Darwin’s success stories. Far from it. The truth is, your battle for survival has just begun. You’ve figured out how to stand on your own two legs, but now you need to learn how to not get knocked down.

“In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment.” ~Charles Darwin

No matter how unique, innovative, creative, or “original” your product, there will always be competition that is vying for your customers. And you know what—that’s a good thing. Competition triggers our will to exist and reminds us that it is truly survival of the fittest.

The key to survival—whether it be in the “real” world or the business world—is to have as much information as possible. Not only about your opponent, but about yourself. That’s where SWOT comes in.

SWOT is an acronym (another handy tool created by man to boost efficiency and increase curability) that stands for Strengths, Weaknesses, Opportunities, Threats.

SWOT provides the guidelines for critically assessing what you’re doing right, what you’re doing wrong, who or what can take you down, and what you can do to get—and stay—ahead of the pack.

And it’s not just Darwin who subscribes to this theory.

Strengths

“He who knows others is wise. He who knows himself is enlightened.” ~ Lao Tzu

In most cases bragging is looked upon as a bad thing. For this exercise it is highly encouraged. It’s important you have a clear recognition of the places where you and your business excel, but not just to give yourself a pat on the back. It’s crucial that you are aware of what you do best. Pediatricians don’t perform heart transplants, Shaquille O’Neal doesn’t shoot three pointers, and Quentin Tarantino doesn’t make G-rated movies. Why? Because they all know what they can do well and play to their strengths.

Key “Strength” Questions

• What’s the best part of what I do, and what do I do best?
• Why do people engage with my product?
• What gives me the greatest sense of accomplishment?

Weaknesses

“Our strength grows out of our weaknesses.” ~ Ralph Waldo Emerson

Bad news—you’re not perfect. Good news—that means you can always improve. Better news—the worse you are at something, the more room for improvement! This isn’t a “glass half full” perspective, it’s just the reality of things. Negatives can be turned into positives, but first you need to figure out what they are. Before you start making your list of shortcomings, make sure you’ve got your old pal Honesty by your side and kick Humility out to the curb. There’s no room for excuses, partiality, and beating around the bush. Without a 100% forthright and straightforward audit, you’ll never be able to optimize your business, and more importantly, survive.

Key “Weakness” Questions

• What can I do better?
• In what areas do I receive the most complaints (from consumers or employees)?
• Am I spending money on something that isn’t necessary?

  Opportunities

• “In the middle of difficulty lies opportunity.”  ~ Albert Einstein

  Don’t get too discouraged now that you’ve unearthed all the not-so-good things you do. Weaknesses are often what give opportunities the reason to come knock on your door in the first place. One definition of opportunity is “a good position, chance, or prospect, as for advancement or success.” No matter who you are or what you do, there are always opportunities for you to succeed—the trick is to find and take advantage of them.

  Key “Opportunity” Questions

  • Is there a particular demographic or market that would like my product that I’m not reaching?
  • What direction are consumer trends moving, and can I get ahead of the curve?
  • Can I capitalize on any of my competitions shortcomings?

  Threats

  “As a goalkeeper you need to be good at organising the people in front of you and motivating them. You need to see what’s going on and react to the threats. Just like a good manager in business.” ~ Peter Shilton

  Who would have thought that a World Cup soccer goalie from England would provide such sound advise for CEO’s? Like a penalty kick from Leo Messi, he couldn’t be more dead on. There is another acronym you should remember which will help you to asses your greatest threats and make sure you have the means to thwart them off—RPI:

  1. Recognize the threat

  2. Plan a course of action

  3. Implement your plan

  Seems like common sense but you’d be amazed at how many businesses cease to exist because they failed to take the necessary time to follow these steps.

  Key “Threat” Questions

  • What “shelf life” do I have for my product to be relevant?
  • What are the main factors causing my cart abandonement(or churn rate, or negative feedback)?
  • Is there another company with a similar product that could potentially draw customers away from me?

  Now that you have tools to abstract the information, the next step is to hunker down and get it. There’s no right or wrong way to compile the data, but the most simple and effective way is with a SWOT 2×2 Matrix:

  	Good	Bad
  Now	STRENGTH	WEAKNESS
  Later	OPPORTUNITY	THREAT

  There are alternative ways to label your boxes, however I would advise against the common practice of substituting “Now” with “Internal” and “Later” with “External”, as those variables do not allow you to seek out opportunities (i.e. team building) and threats(i.e. high employee turnover) within your own company. You can also find a wealth of best practices and templates online—here is one from businessballs.com that I find particularly beneficial.

  Of course once you’ve got your SWOT all figured out, the next step is to take action upon your findings to ensure you continue to stay afloat. Although there may be some choppy waters ahead, you’d be amazed at how much easier that task will be once you’ve got your course mapped out. And if you don’t believe me, just ask the Father of Modern Science:

  “All truths are easy to understand once they are discovered; the point is to discover them.” ~Galileo

  Please feel free to share some of your own findings and questions that have come from implementing a SWOT analysis with your business or personal life.

For many in the entrepreneurship game, long hours are a badge of honor. Starting a business is tough, so all those late nights show how determined, hard working and serious about making your business work you are, right?

Wrong. According to a handful of studies, consistently clocking over 40 hours a week just makes you unproductive (and very, very tired).

That’s bad news for most workers, who typically put in at least 55 hours a week, recently wrote Sara Robinson at Salon. Robinson’s lengthy, but fascinating, article traces the origins of the idea of the 40-hour week and it’s downfall and is well worth a read in full. But the essential nugget of wisdom from her article is that working long hours for long periods is not only useless – it’s actually harmful. She wrote:

The most essential thing to know about the 40-hour work-week is that, while it was the unions that pushed it, business leaders ultimately went along with it because their own data convinced them this was a solid, hard-nosed business decision….

Evan Robinson, a software engineer with a long interest in programmer productivity (full disclosure: our shared last name is not a coincidence) summarized this history in a white paper he wrote for the International Game Developers’ Association in 2005. The original paper contains a wealth of links to studies conducted by businesses, universities, industry associations and the military that supported early-20th-century leaders as they embraced the short week. ‘Throughout the ’30s, ’40s and ’50s, these studies were apparently conducted by the hundreds,’ writes Robinson; ‘and by the 1960s, the benefits of the 40-hour week were accepted almost beyond question in corporate America. In 1962, the Chamber of Commerce even published a pamphlet extolling the productivity gains of reduced hours.’

What these studies showed, over and over, was that industrial workers have eight good, reliable hours a day in them. On average, you get no more widgets out of a 10-hour day than you do out of an eight-hour day.

Robinson does acknowledge that working overtime isn’t always a bad idea. “Research by the Business Roundtable in the 1980s found that you could get short-term gains by going to 60- or 70-hour weeks very briefly — for example, pushing extra hard for a few weeks to meet a critical production deadline,” she wrote. But Robinson stressed that “increasing a team’s hours in the office by 50 percent (from 40 to 60 hours) does not result in 50 percent more output…In fact, the numbers may typically be something closer to 25-30 percent more work in 50 percent more time.”

The clear takeaway here is to stop staying at the office so late, but getting yourself to actually go home on time may be more difficult psychologically than you imagine.

As author Laura Vanderkam has pointed out, for many of us, there’s actually a pretty strong correlation between how busy we are and how important we feel. “We live in a competitive society, and so by lamenting our overwork and sleep deprivation — even if that requires workweek inflation and claiming our worst nights are typical — we show that we are dedicated to our jobs and our families,” she wrote recently in the Wall Street Journal.

Long hours, in other, words are often more about proving something to ourselves than actually getting stuff done.

Are your 55+ hour weeks really productive and sustainable?

Mark this up as one more crucial chapter in the much-thumbed book called “The Consumerization of IT”: a new app has launched from a Y Combinator-backed startup that offers builders the ability to store, manage and view blueprints on and iPad tablet.

The unique selling point for PlanGrid, as the app is called, is that it promises to present building blueprints in a far more efficient way than they have been presented before.

But on a more general level, PlanGrid is a sign of how the iOS platform is maturing and attracting a new wave of developers who target specific enterprise verticals with solutions tailored to their business needs.

Ryan Sutton-Gee, one of the four co-founders and now CEO of Loupe, the company that makes the app, comes from a construction background himself and says the costs and frustrations of dealing with paper-based plans are what drove him to want to rethink how things were done.

The fact that his immediate world — he is based in Silicon Valley and is a Stanford grad — is so focused on Apple and apps made it a no-brainer that this would somehow figure in the solution.

And the other three co-founders fit neatly into what this app is bringing to the table: expertise in construction; visual design skills and cloud computing prowess. Tracy Young, the COO, also had worked in construction; while Ralph Gootee, the CTO, came from animation studio Pixar; and Kenny Stone, VP of engineering, had worked as a trading programmer. (It’s Stone who is now responsible for all the cloud-based storage and delivery of users’ documents.)

How it works. PlanGrid is a cloud-based service that delivers blueprints as PDFs directly on the tablet; then people working in the field can use these instead of paper-based versions. When a modification needs to be made, that can be directly noted on the plan, in the app. That is subsequently updated into a new version. PlanGrid’s technology makes the rendering and scrolling of those blueprints significantly faster, too.

PlanGrid claims that because it is easy to send out and use updated blueprints, this can help reduce the need for rework and other fixes. Typically, 6% of rework is due to outdated blueprints, and in turn around 15% of construction costs are due to rework, which means 1% of total construction costs are due to the blueprint problem. Those are significant figures, considering that an average margin that a builder could expect to make is only between two percent and four percent.

PlanGrid also claims that at its most basic level this app could eliminate the heavy printing costs associated with those building projects: typically for every $1,000,000 in building costs, there are $3,500 of printing costs.

And in contrast to many consumer-focused startups, this one has a pricing model from the word go: users can choose from a low-page-count free version, or pay $19.99 or $49.99 per month for either 550 or 5,000 sheets.

Unlike some enterprise verticals, construction is not one that has a natural need for all employees to own laptops, smartphones and tablets. “Whereas people in some businesses spend 10 hours in front of a computer, someone in the construction industry would spend one hour,” Sutton-Gee said.

That sounds like it would pose a challenge for the business — why buy an app if you don’t even have the device to use it? But Sutton-Gee claims that in fact what the app has done in its early days of sales is drive more purchases of the iPad by those in the construction industry — just so that they could use PlanGrid. “We’re a big enough solution to the problem they are facing that they’re buying those tablets to use the app,” he says.

Looking ahead, Sutton-Gee says that the company has a lot more ideas for how to expand its construction services — for example linking up the whole chain from architectural designs, to the technical drawings and the final blueprints that are used to actually construct a building. That, he says, could be a massive help when a company is trying to figure out where a building project has leaked money, gone over budget or fallen down altogether.

You can download the app here.