" Practical, direct, no-nonsense. Wish I'd had The Elements of Building when I was starting out. . . and for the decade after that. It is a very good book. . . " Mike Reitz, founder and editor of The Journal of Light Construction (JLC)

Sunday, December 09, 2018

ACCURATE DOCUMENTS

Every successful bid is based on accurate documents. It doesn’t matter if it is a small job with a few specs or a large job with a full set of job documents. If the information is inaccurate or incomplete, bidders are guessing and comparing prices is meaningless. from EOB

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Author's email: eob@dplus.net

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

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Thursday, December 06, 2018

TIME & MATERIAL

Time & material contract (T&M) also called labor & material, although often used in the same sense as cost-plus, T&M should be distinguished from it in this way: the builder adds overhead, profit, and labor burden to the tradesmen’s hourly labor rate and charges for all of the hours that it takes to complete the project plus material, subs, and miscellaneous. T&M contracts are typically used for handyman services, building maintenance, and very small jobs because much of the work will require on-site problem solving, discussion, and running for materials; the client will often add to the work in progress; and the job may not justify a pre-work site visit or developing job documents. Although not common, T&M is sometimes used on larger jobs.
visit: https://www.facebook.com/The.EOB/
visit: https://houseparts.smugmug.com/
visit: https://eob-mqk.blogspot.com
Author's email: eob@dplus.net

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

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Saturday, November 17, 2018

BUSINESS IDEAS

Look at both sides of new business ideas. Give as much weight to what could go wrong as to what could go right. Enthusiasm and imagination often make ideas appear far better than they are. Research the idea. Map it out. Make a list of what-ifs. Talk with others. Give it time to simmer—a few weeks or months—and see if it stands up to reexamination.  EOB, Builder Notes, Business Strategies   

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visit: https://houseparts.smugmug.com/
visit: https://eob-mqk.blogspot.com
contact author: eob@dplus.net

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

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Saturday, September 29, 2018

PUT YOUR TOOL BELT ASIDE, another look

A friend who has been a successful builder for 40+ years and I were talking about the idea from the post from two weeks ago, September 25th, that is, ”If you want to be a tradesmen work for someone else, if you want to run an business, put your tool belt aside as soon as it is practical and run the business.”, and he said that he knew people who work in the trades and run their business successfully. At which point I remembered that I also had known a few people who had succeeded doing both. 

On the other hand I have known countless guys who worked 40+ hours per week in the field and did their office work evenings and weekends, but because this cannot be maintained for long periods of time—it is relentless and exhausting and the office work will be poorly done because it is not being given their best attention—many of them went out of business (some several times) or existed on the very edge of failure for years.     

The person that my friend was talking about is in a strong market and was succeeding by strictly dividing field and office work: working in the field four days per week and religiously taking one full day and perhaps part of Saturday to do his business work. My issue with this idea—and my personal experience with it—is that because field work is so immediate and demanding, it takes uncommon discipline to consistently stop, week after week, to give office work its due. 

Perhaps the conclusion is that with rigorous discipline it is possible to continue as a tradesmen and run a business, with a few caveats: it will limit the size of the business; there will likely always be a bias toward the field that will need to be kept in check; and it will be hard to determine at times where best to put ones effort: the pressing field issues or to take care of the office. On the other hand, many people work in a trade because they get satisfaction from it and thus don’t want to give it up and many of us want to make a good living, not to build an empire.  

And a final thought: while the idea of working both in a trade and in the office has worked for some people, and it has great appeal for many of us, it remains my belief that most of us will be best serviced by putting our time into learning and applying business skills as soon as it is practical.   

visit: https://www.facebook.com/The.EOB/
visit: https://houseparts.smugmug.com/
visit: https://eob-mqk.blogspot.com
contact author: eob@dplus.net

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


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Monday, September 24, 2018

BIDDING

What can be earned on a job is limited, what can be lost is nearly without limit. I don’t know why so many GC's provide free bids. I do know that the strongest general contracting companies charge for their bids or avoid competitive bidding altogether because in so many ways it is a losing proposition that rewards the unlucky and the ill-prepared. EOB, bidding notes

visit: https://www.facebook.com/The.EOB/
visit: https://houseparts.smugmug.com/
visit: https://eob-mqk.blogspot.com
contact author: eob@dplus.net

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

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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