This book should be required reading for every builder and tradesmen in America. Jim Fleming, carpenter/GC 40+ years

Sunday, January 21, 2018

BOX STORES

I am likely fighting a losing battle here, but I suggest that builders and tradesmen are far better off buying from local supply houses than from box stores.  It might be a losing battle because the box stores appear to be expanding while local supply houses seem to be fading. Just the same, it is worth mentioning that local supply houses have distinct advantages for you, your company, and your community: including better service, far deeper product knowledge, keeping money in the local economy, and a place where you are known and your business is appreciated.

Have you ever considered how much it costs to drive to the box store, find and load material on a cart, checkout, load the material into your truck and unload it on the job? Local supply houses almost always deliver and with a little planning you can keep doing the real work of building instead of shopping for supplies.

And finally from other builder's stories and my limited experience, box stores are awful at special orders. I believe this is true partly because their supply lines are too complex, but mostly because their staff turns over faster than their inventory. The times I have dealt with them on special orders (always because the client insisted on ordering from them) I was unable to work with the same person from week to week, even from day to day sometimes, and therefore every time I called I had to explain what I was calling about and wait while they figured out the basics. And in my case, every time the item came in it was either damaged or wrong. This was then followed by a nightmare of them trying to correct the order. 


When you deal with a well-run local business you establish a relationship with a salesmen who knows the products, knows your company, and is likely be there for years. These advantages cannot be overstated and they help make a good builder better.

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EOB is available at Amazon.com and on the Garrett Wade website.

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Sunday, January 14, 2018

PACING

Many new builders act as if ever-increasing intensity and limitless hard work assure success. But building is by nature fast-paced, hard work, and no one can maintain a frantic pace over long periods of time and succeed. Don't confuse the natural intensity of the industry with a management style that is always in crisis and that will consume every ounce of energy you have and still require more. 
EOB, from Rules, Ethics, & Opinions

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visit: https://houseparts.smugmug.com/
visit: https://eob-mqk.blogspot.com

EOB is available at Amazon.com
EOB is available at the online Garrett Wade Tool Company (best price)

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Sunday, January 07, 2018

OVERHEAD & PROFIT

Overhead is the cost of doing business:

It is the cost of trucks and fuel, phones and computers, stationery and office salaries; it is every expense not tied directly to the cost of construction. Determine what percentage you must add to your estimates to cover overhead and add it to every job from the day you open for business.


Profit is the reward for running a business well:

There is nothing more fundamental in business than profit. Before you do anything else, learn what it is and how to charge for it and add it to every project. If a business is not making adequate profit, the owner is working for wages and would be better off taking a job with someone else and giving up the responsibility and the risk of being in business.

 “To fail to provide for profit is to subvert all business logic, and to  leave you,        your employees, and your suppliers at risk.”  Bob Hanbury

There is much more about overhead & profit in The Elements of Building.

visit: https://www.facebook.com/The.EOB/
visit: https://houseparts.smugmug.com/
visit: https://eob-mqk.blogspot.com
EOB is available at Amazon.com
EOB is available at the online Garrett Wade Tool Company

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Monday, December 25, 2017

thoughts on bidding

It is curious that so many professionals charge by the hour—lawyers, therapists, auto mechanics, even portrait painters—but most contractors are expected to give a fixed price for their work, and, the larger and more complex the work, the more often a fixed price is required. This despite the fact that the fixed figure is often inflated to make up for the unknown, that it is not really a fixed price because of change orders and allowances, and that time and material or cost plus would be often far better for the client and the builder. 

In situations where the product is fairly standard and the contractor does nearly the same work over and over again—sunroom, replacing windows, shingling a roof for example—a fixed price makes sense for both the client and the contractor. But this is true only because the specifications are fairly standard and thus the pricing is known. The more complex the job the less fixed pricing works to anyone’s advantage.

Some of the reasons clients expect fixed prices:

      ~ Builders are willing to give them.
      ~ Historically this is how it is done.
      ~ Clients expect them.

There are enough bad contractors that clients don’t trust the industry (although some of the responsibly for this falls to clients for hiring based on the lowest price). The importance of detailed and precise specifications and drawings is poorly understood by the customer and, amazingly, even by many builders.

There is much more in EOB on the subject of bidding.

visit: https://www.facebook.com/The.EOB/

EOB is available at Amazon.com
EOB is available at Garrett Wade: here

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Monday, December 11, 2017

insurance

Know the difference between good and bad insurance companies. The good ones cover legitimate losses for the value of the item (minus the deductible) after confirming the claim; the bad ones begin by questioning everything and fight to pay nothing, and barring that, to pay the smallest amount possible. Research companies online and buy from the one with the best ratings. 
EOB, Insurance Notes

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EOB is available at Amazon.com

EOB is available at Garrett Wade: 
http://www.garrettwade.com/elements-of-building-book.html

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Friday, February 10, 2017

The Journal of Light Construction reviews EOB, Nov 2016

Early in my building career I got involved with a local chapter of a builder’s association and met monthly with a group of custom builders like myself, only they were mostly 20 years older. I credit much of my success to those guys, who were not put off in the slightest by having a “Young Gun” playing in their sandbox, but instead took me under their wing as a mentee. Despite the fact we were all competitors, they were open to sharing their hard-won building-business knowledge.

Whenever I read the Elements of Building, I am reminded of the many meetings I attended with those mentors. Author Mark Q. Kerson is a lot like the seasoned builders who shared their wisdom with me. In effect, this book could be your mentor or building-business coach. It feels so solid, I’d even venture to say it feels like advice your dad would give you if he was a seasoned builder.

BEYOND BASICS


I loved reading this book and I find myself rereading it often, in large part because it gets to the very heart of my business. If you’ve never had any formal business training, there’s a lot to learn from general business books—the sort you’re likely to find on an Amazon best seller list. But those books are not going to tell you what you need to know to excel in the business of building and remodeling custom houses.

Most general business books, for example, treat bidding as being necessary for winning contracts. Kerson, on the other hand, dislikes bidding—as most experienced builders do—and explains why. He does give you the tools to understand how it generally works and provides guidance to those who feel they have to bid to get work. For instance, he recommends calling the bid a “proposal” and charging for it. He also provides guidelines for putting together an accurate bid; essentially, he offers up a series of questions to ask yourself to make sure your numbers and scope are in line with reality. But unlike writers of generic business books, he shows us how to avoid bidding and ends this section with a great quote by Paul Eldrenkamp: “So, a while back, when the market was strong, I decided to reward myself for all the work I’d put into developing a top-notch crew and an exceptional client base. My reward was to stop bidding.”


BOOK STRUCTURE


Kerson starts the book with a series of “Rules, Ethics, and Opinions.” Here’s one I found particularly helpful: “The image of your company, its physical appearance, matters. Customers hire individuals and companies that are clean-cut and well organized because they believe that it indicates competence, quality, and professionalism. And they believe this because, on balance, it does.” A focus on honesty and integrity runs throughout the book; this stands out for me, perhaps because it’s so rarely conveyed by popular media, which loves to draw builders and tradespeople as scammers.

After giving us the “rules,” Kerson walks us through the cast of characters that a builder must contend with, organized in importance to a successful business. This begins at the center of your circle with you, the builder, and radiates outwards to close “participants”—personnel, subcontractors, suppliers, and clients—and then to related “professionals”—accountants, bankers, designers, and so on.

Once we have a strong understanding of the players involved, with guidance on how best to manage our relationships with them, Kerson serves us the meat and potatoes—the “key elements” required for running a successful construction company: estimating, bidding, and money. In these sections, Kerson presents helpful advice on nearly every aspect of the business of building, including pricing, hiring, subs, contracts, prospects, clients, negotiations, bidding, estimating, and more. At every step, this book spurs you on to become a better and more profitable builder.
The book ends with an appendix that includes samples of construction schedules, contracts, checklists, draw schedules, and subcontractor agreements, as well as several pages of book recommendations for further study.

Underlying the book is a career’s worth of experience of someone who learned the hard way: living the harsh reality of a builder. Kerson, as fitting a mentor, provides us with insights (and I love how he laces quotes throughout to add depth to those insights) that can soften the hard knocks for the rest of us. But he also reminds us that in the end, what we need most of all to survive in the trades is persistence and hard work. As an anonymous quote from his ample collection of quotes advises, “Success is a marathon, not a sprint. Never give up.”

Matt Risinger, Risinger Builders, TX
The Journal of Light Construction, November, 2016