How Construction Contractors Get Rich

The perfect business is one that generates money while its owner sleeps. That’s not possible for some businesses, but it perfectly demonstrates the two ultimate goals of most business owners: (1) maximize wealth and (2) break free from their business.

Businesses do not create wealth and freedom by accident. They happen because their owner created systems that turned the business into a well-oiled machine. Have you automated the six primary systems your business needs to succeed? Here are the six:

• Marketing
• Selling
• Staffing
• Planning
• Tracking
• Financial Control

At first blush, you may think you have systematized your construction business, but a better test is to look at the subsystems that make up the six systems. You probably will come up short when you review that list.

MARKETING

The purpose of your marketing system is to produce a flood of qualified sales leads. If you want to get rich, you must automate systems for:

-Generating leads from new customers.
-Generating leads from existing customers.
-Prodding referrals from existing customers.
-Collecting testimonials.
-Staying in touch with your customers.
-Publicizing your business.
-Developing new advertising pieces.

SELLING

The purpose of your selling system (and you need to think of selling as a system) is to get commitments from buyers to hire you. The selling subsystems are a combination of sales tasks, motivation, and development. If you want to get rich, you must automate systems for:

-Assigning and prioritizing leads.
-Qualifying leads.
-Following up with prospects.
-Creating proposals and presentations.
-Processing orders.
-Following up with customers after their project is finished.
-Motivating the pursuit and procurement of profitable sales.
-Improving selling skills.
-Networking.
-Strengthening your customer relationships.

STAFFING

The purpose of your staffing system is to get the right people to join your company and to get them situated so that they are successful. If you want to get rich, you must automate systems for:

-Advertising openings.
-Interviewing.
-Creating and updating job descriptions.
-Communicating performance expectations.
-Monitoring market wage rates.
-Dismissing non-performers.
-Developing employees’ skills.
-Rewarding good performance.
-Selecting the right people for promotion.

PLANNING

The purpose of your planning systems is to eliminate negative surprises by solving problems before they arise. If you want to get rich, you must automate systems for:

-Determining which markets you are going to pursue.
-Creating your annual budget.
-Creating a cash flow budget.
-Increasing your bonding capacity.
-Planning project completion.
-Scheduling your work crews.
-Determining when to buy equipment.

TRACKING

The purpose of tracking systems is to make sure your business is performing as you need it to. If you want to get rich, you must track performance on the following items:

-Expenses vs. budget (job and company).
-Revenue vs. budget.
-Gross profit vs. budget (job and company).
-Labor productivity (job and company).
-Advertising effectiveness.
-Selling effectiveness.
-On-time completion.
-Employee performance.
-Equipment costs.
-Aged receivables outstanding.
-Sales backlog.
-Safety efforts and lost time injuries.
-Estimating accuracy.
-Mark-up success.
-Re-work.

FINANCIAL CONTROL

The purpose of financial control systems is to make sure that your business is on solid financial ground. If you want to get rich, you must automate systems for:

-Developing relationships with bankers.
-Developing relationships with bond and insurance agents.
-Qualifying and evaluating your CPA.
-Getting the proper business licenses.
-Processing payroll.
-Making scheduled federal and state tax payments.
-Managing your cash.
-Verifying money is not being improperly removed from the company.
-Verifying suppliers’ bills are legitimate.
-Collecting late receivables.
-Paying bills are on time.
-Paying employees properly.
-Filing liens and claims.
-Collecting employee information.
-Sending out 1099s.
-Getting proper insurance coverage.
-Verifying lease terms and payments are proper.
-Building and managing your credit line.

Until you get all of these systems automated, run by people other than yourself, you will forever be a slave to your business. Once you get them automated, you will be able to grow your company as big as you wish, generate as much income as you desire, and have the freedom to come and go as you please.

As a final thought, I have a question for you. Do you own a business or do you own a job?

If you haven't yet automated the ability to land good work and get it done, then you own a job. That's probably not your personal goal is it?