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Does Busy Make You More Money?

George Hedley

Almost every contractor’s goal is to win more profitable work than they currently have. When the economy was slow, they worked hard to keep crews busy and break even. As the economy heated up, contractors began to take on more work than they could handle. On paper, they figured they’d make more money as their overhead remained constant while revenues grew. And for many, with increased workloads and higher levels of retention money outstanding, cash became scarce and their ability to pay bills was difficult. The reality of busy and broke is challenging as many contractors struggle to figure out what they should do.

More Work = More Profit, Right?

A busier business keeps you running faster on an uphill treadmill going nowhere quickly. Busy keeps your key people overworked without time to plan, prepare, mange, or get change orders approved. Busy overloads project managers who then don’t have enough time to document projects issues or eliminate problems before they happen. Busy doesn’t allow time to sit down with foremen to review job cost production reports weekly and make adjustments. Busy doesn’t allow you time to find better customers or projects with less competition or higher margins. Busy forces quick decisions without due diligence. Busy doesn’t allow staff to properly review and process invoices. Busy doesn’t allow you to bill customers on a timely basis. Busy keeps you stressed out and takes away from doing what gives you the highest return for the effort. And busy doesn’t make you more money! Right?

What Can You Do to Make More Money?

Even though you are super busy, are you making the money you could if you had time to plan, organize and track your jobs properly? Doing more work with the same staff doesn’t make you more profitable. It reduces people’s ability of take care of everything.

Field construction problems and profit shrinkage occur when estimators don’t have time to get another quote or make sure they have everything covered in their estimates. Project managers don’t have enough time to visit job sites to fend off potential problems or maximize change order opportunities. When general superintendents are too busy, they don’t make sure crews are the right size with the right people, and don’t get around to training. Crew leaders don’t have time to replace poor performing workers. When crews move too early to the next job, this leaves jobs unfinished with big punch-lists. All of these challenges cost you cash.

Make More Versus Spend Less!

When you’re too busy and don’t have enough help to run your company, you react all day and put out fires. This causes you to run in circles and won’t allow you to make more money. The key is dedicating time to get organized. This will allow everyone to do things the standardized company way. For example, holding structured field crew meetings to track production performance, train and organize will make you more efficient. Taking time to plan projects properly reduces downtime, poor performance and mistakes.

8 Steps to Make More Money When You’re Busy!

When you’re super busy, implement these systems and procedures to increase your bottom line:

  1. Admit it: you need more help to get all the work done. As workload increases, most construction company owners keep adding more tasks onto themselves and their people and deliver the same bottom-line results.
  2. Stop asking employees to do more. Take a realistic look at your overhead budget and management staff to determine if your overhead expenses have grown at the same pace as your sales revenue. More work requires more people to get the work done right and deliver profitable results.
  3. Take a hard look at your organizational chart and determine what is not getting done. Who is overworked with too many projects? Many growing companies need more people and help. Commit to not hiring cheap versus what you really need.
  4. Develop a scorecard to track workload per key manager or supervisor. Managers and supervisors shouldn’t have more than five to eight people under their responsibility. Determine the positions you need to add and hire for your current needs. Assign a hiring coordinator to manage your hiring program, place ads, set up interviews, and coordinate the process.
  5. Stop bidding every job opportunity that comes along. The goal is to grow with higher margin customers and better projects versus doing more work at low margins. Develop a stringent bid-no or no bid criteria that works for your company. Meet with the estimating staff weekly to review future bid opportunities, projects currently bidding and those you’ve already bid. Develop a bid-grid-sieve of the right kind of projects you want for the right customers against competitors you are willing to compete with.
  6. Make pre-project planning part of your company-wide standards. Require a pre-project turnover meeting before you start any new project. Have the estimator, project manager, superintendent and foreman attend. Allow them enough time to review the bid, estimate, contract, scope, schedule, proposed subcontractors and suppliers, and requirements. Then allow time to adequately discuss and prepare the construction work plan, schedule, proposed crew and manpower requirements, equipment needs, and develop a working budget.
  7. Stop the overtime money drain. Working more than 50 hours a week reduces productivity, performance and results. Not only does overtime cost you more money, it reduces the output per hour for an overworked crew. Plus, overtime that wasn’t figured in your bid estimate comes right out of your profit margin. Instead, hire the right number of people required to finish work on time.
  8. Set aside time to hold a monthly management strategy meeting. When you’re too busy to look at what you’re doing, you find out too late to make adjustments to improve performance. Also, take time to review what’s working and not working, and what changes are required to improve your company.

Stop taking on more work than you can handle. Busy makes you work harder without much additional profit. Plan for growth. Build a team that can perform the work. And don’t sacrifice doing what you know you should do to perform with quality, efficiency, professionalism and competence.


George Hedley, CSP, CPBC, helps contractors grow and profit as a professional business coach, popular speaker and peer group leader. He is the author of “Get Your Construction Business to Always Make a Profit!” and “Hardhat BIZSCHOOL Online University” available on his website. Visit www.hardhatbizschool.com for more information.