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Know the Score to Win the Game

February 2nd, 2012 by

Set, track and monitor your targets and goals for you construction company.

Imagine coaching a basketball team without keeping score. You would put in your best players, call plays designed to outscore the opponent and hope to finish the game with more points. But without a scoreboard, you would not know if you should change your strategy, call different plays or put in different players. It would also be difficult to motivate your players.

Business is like sports in many ways. You cannot win in business if you do not track your progress. To win the game of business, you have to be under budget, ahead of the plan, make money and beat the competition. When your employees do not have goals to meet, they will not work as hard.

Establish Goals and Targets for your Construction Business

Have you established goals and specific targets for your construction business? For example, do you have written goals for your current annual sales and net profit? Less than half of all small business owners set and track annual sales and profit goals. This is like running a business without trying to make a profit.

Specific company targets might include: sales revenue, gross profit, overhead, net profit, profit growth, debt reduction, average project size, number of new customers, new market penetration, proposal-hit ratio, stockholder distributions and company value.

Before you start a project, get the estimator, project manager, field superintendent and foreman together to set overall project goals. Hold a pre-job team meeting to get everyone on the same page.

Plan the project, and develop goals, including estimated versus final profit, proposed versus final completion date, production crew hours, equipment hours, general condition costs, safe work days, call-backs or punch-list items, customer satisfaction, increased  change order revenue and prompt payments. Afterward, follow up on these goals with weekly and monthly project team meetings. At the end of the project, hold a general review meeting to decide what areas need improvement, and refine your goals for the next project.

Follow the SWAT Method

You must have specific written targets for every important area of your business. Write down what you want to achieve, and use the SWAT.COM method to set your goals:

S Specific

W Written

A Attainable

T Time-Dependent

C Challenging and clear

O On-purpose and on-target

M Measurable

 

After you establish your overall company goals, write project and individual goals that will contribute to your company’s success. For example, if you want to improve net profitability this year from $100,000 to $250,000, improvement must start with your sales focus and finish at the project level.

Specific action goals to complement this overall company net profit goal should include the following tasks: 1) Secure four new customers who will execute contracts at a minimum gross profit margin of $50,000 each during the year. 2) Implement a field productivity improvement system to increase crew effectiveness by a minimum of 10 percent, and save at least $100,000 for every $1 million in crew costs over the next year.

Incorporate goals into your company’s  mindset. Your team should know their top priorities and deadlines to achieve the goals. Otherwise, they will get sidetracked by “urgent” job problems and miss the annual target.

Track Progress

Too often, business owners do not use a tracking system or provide feedback to their employees. Feedback will allow project teams and field crews to make strategic adjustments before it is too late. Use Monday morning team meetings to meet with your employees, and set weekly goals. Write them down, and give each team member a specific target to reach. For example, to stay on schedule for a typical week, you might set the following weekly goals: dig 500 lineal feet of pipe, complete all touch-up painting for the project, or get all outstanding change orders approved by Friday.

Also, meet with your team monthly to review progress on targets such as new customers, new contracts, sales revenue, company profit, cash flow and collections. At the project level, review the estimated final profit, job schedules, field productivity, customer satisfaction, quality, safety, general conditions and the labor and equipment budget versus actual expenses.

When you set goals, keep score, track your progress and let your team know the score on a frequent basis, you will win more games!

Try This
Use this example to develop and track your annual field productivity improvement goal: 
Goal: Improve field productivity 10 percent or 

$100,000 per $1 million in crew cost
Deadline: Design and implement a productivity improvement
program within one month.
Deadline: Save 10 percent over the next 12 months.
Action step #1 Get the project team together to develop the program.
Action step #2  Identify tactics, and develop a tracking system.
Action step #3   Set a project team monthly meeting schedule.
Action step #4 Implement a productivity improvement system.
Action step #5 Track progress weekly, provide feedback and
make adjustments.

Motivation Breeds Success

January 31st, 2012 by

The following article from inc.com gives you some easy tips on how to stay motivated.

Here are 14 quick strategies to get and keep yourself motivated:

1. Condition your mind. Train yourself to think positive thoughts while avoiding negative thoughts.

2. Condition your body. It takes physical energy to take action.  Get your food and exercise budget in place and follow it like a business plan.

3. Avoid negative people. They drain your energy and waste your time, so hanging with them is like shooting yourself in the foot.

4. Seek out the similarly motivated. Their positive energy will rub off on you and you can imitate their success strategies.

5. Have goals–but remain flexible. No plan should be cast in concrete, lest it become more important than achieving the goal.

6. Act with a higher purpose.  Any activity or action that doesn’t serve your higher goal is wasted effort–and should be avoided.

7. Take responsibility for your own results. If you blame (or credit) luck, fate or divine intervention, you’ll always have an excuse.

8. Stretch past your limits on a daily basis. Walking the old, familiar paths is how you grow old. Stretching makes you grow and evolve.

9. Don’t wait for perfection; do it now! Perfectionists are the losers in the game of life.  Strive for excellence rather than the unachievable.

10. Celebrate your failures. Your most important lessons in life will come from what you don’t achieve. Take time to understand where you fell short.

11. Don’t take success too seriously. Success can breed tomorrow’s failure if you use it as an excuse to become complacent.

12. Avoid weak goals.  Goals are the soul of achievement, so never begin them with “I’ll try …”  Always start with “I will” or “I must.”

13. Treat inaction as the only real failure.  If you don’t take action, you fail by default and can’t even learn from the experience.

14. Think before you speak.  Keep silent rather than express something that doesn’t serve your purpose.

The above is based on a conversation with Omar Periu, one of the world’s best (and best known) motivational speakers.

 

What’s Missing From your Construction Marketing Plan?

January 30th, 2012 by

Take the following steps to reach your target audience this year.

Many construction firms know what they want their company to be in a year or two. They know how much they want to grow, which services they want to offer and which markets they want to go after. In other words, they have developed a solid plan. But most firms do not have a marketing communication plan—the bridge between establishing your marketing goals and achieving them. This plan enables you to get to know your target audience, and it helps you determine the best strategy for developing marketing materials that will drive your competitive advantage and encourage your prospective clients to take action.

Step 1: Establish Your Goals and Objectives

Before you advertise, print a brochure or build a website, you must establish your marketing goals to know which marketing materials will work best for your unique situation. Your goals define where you want to be in a given time period. For example, your goals could include entering new markets, introducing new services, starting a firm that specializes in renovation projects or increasing market share by 5 percent.

To accomplish your goals, you must establish clear communication objectives—the responses you desire from your target audience. Develop as many communication objectives as possible for each of your marketing goals because they will help you determine which marketing communication materials will achieve your goals. Some communication objectives might include creating an awareness of your company in the new market, establishing a need for your products or services or generating inquiries.

Step 2: Identify Your Competitive Advantages

If you fail to identify your competitive advantages, you will have a hard time convincing potential prospects to choose you over your competitors.

Every company that is at least modestly successful has competitive advantages. Your company would not be in business if it did not stand out from the competition in some way—perhaps it is the quality of your work, the experience you have had on a particular building type, your technical know-how or your pricing.

Step 3: Define Your Target Audience

Once you have established your goals and competitive advantages, you need to determine your target audience (the group of people most likely to buy your products or services). Your target audience should consist of individuals who would benefit most from your particular products or services.

Define your target audience by their demographic and psychographic characteristics. Demographic characteristics can be measured or quantified. They include broad characteristics like business type, geographic location, number of employees, etc., and other specifics like job title, age, sex and income.

Psychographic characteristics group people into homogeneous segments based on their psychological makeups and lifestyle characteristics. This might include interests, hobbies, beliefs, etc. Psychographic characteristics, while harder to define than demographic characteristics, are often more important to understand. Since people make purchases based on how a product satisfies their needs, understanding your prospective buyers’ psychographic traits will help you better understand their needs and motivations and how your product or service can satisfy them.

Step 4: Develop a Creative Strategy Statement

A creative strategy statement simply explains what you want to accomplish, what you want to say, to whom you want to say it and how you should communicate it. The creative strategy statement defines the overall look and feel of your efforts.

For example, an interior contractor might have this creative strategy statement:

To establish preference for our services and generate sales opportunities by communicating that we are the best interior contractor for private companies with 5 to 100 employees, particularly if they need work done in occupied spaces. We will speak primarily to people within these companies who have little experience in retrofitting their office space. Because they are probably very anxious about this process, we will create marketing materials that communicate how choosing our firm will ease their minds. We always try to find new and creative answers to solve construction challenges, and our designs have a cutting-edge look, instead of something stodgy and conservative.

Step 5: Produce a Creative Platform

Now it is time to put all the information you have gathered into a format that can be used by you and anyone else who may develop your marketing communication materials. You will create a document called a creative platform. The creative platform is an essential outline that lists:

 

  • -Marketing goals and the communication objectives that will achieve them
  • -Competitive advantages (and their benefits)
  • -Key selling point
  • -Other selling points
  • -Target audience, defined by their demographic and psychographic characteristics
  • -Creative strategy statement

This platform should serve as your guide.

Step 6: Select the Most Effective Marketing Materials

Once you have created your marketing communication plan, you will have all the information necessary to decide what types of promotional materials you should produce to achieve your objectives.

Advertisements, for instance, are effective for establishing awareness but do not always generate action. A brochure creates desire and action but not awareness, and websites generate desire and interest.

Step 7: Develop a Budget

The objective-task method is the most accurate (but complicated) way to develop a marketing communication budget for your firm. This budget is an essential part of the process.

The objective-task method requires you to develop a marketing communication strategy and assign costs to each item. This is very time-consuming initially, but once you establish your first budget, you can measure your strategy’s effectiveness, and then subsequent budgets will be relatively easy to develop.

If you do not learn how to develop a good marketing communication plan, all your marketing materials will be off target and your valuable resources will be wasted.

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