“As I read The Elements of Building, it was as if we were meeting over coffee, discussing the fine points of running a construction business.” Alex Gromada, Coordinator, Southern Illinois CJAP

Sunday, June 10, 2018

subs

Contractually require subs to obtain, pay for, and comply with all permits and inspections. And require each sub to meet their trade’s inspector on-site if someone must be present. If you or a foreman are going to be there, you might do the sub a favor and meet the inspector, but as standard procedure the trade is responsible for meeting inspectors and taking care of any issues that arise from the inspection. From EOB, Subcontractor Section, Contract Notes


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Monday, June 04, 2018

marketing

Do not slow or stop marketing in anticipation of winning a job. Projects fall through for a thousand reasons and often at the last minute. If marketing has been slowed or abandoned, the damage from the loss of that job will be even worse. Further, if you become entirely dependent on a specific job, you may agree to unfavorable contract terms because you can’t afford to lose the work. If marketing brings in too much work, tighten your qualifications or explain that you cannot take on more work at that time. This is a much better problem to have then struggling to find work at the last minute.  EOB, Builder Notes: Business Strategies

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contract the author: eob@dplus.net

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

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Sunday, May 27, 2018

pre-construction products

Do not give away your pre-construction products to potential customers. This includes estimate line item details, specifications, material take-offs, subs and suppliers, schedules, and ideas. Some people are educating themselves at your expense and will use as much of your time and all of the information you give them without ever using you. Design your sales process so that clients sign a contract before receiving this information. EOB, Customer Notes

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

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Sunday, May 20, 2018

the problem with bidding

A few companies may win 30% to 40% of the bids they submit. Most don’t even get that. Put another way, companies fully committed to bidding waste 60% to 70% of their considerable effort in failed bids. And, because so often it is the company that shaved margins or made the biggest mistake that wins the job, often there is no profit left in these jobs anyway. EOB, Bidding. 

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contract the author at: eob@dplus.net

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

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Sunday, May 13, 2018

the business of building

"When opening a small construction business, management skills are as important as trades skills, and they quickly become more important. . ." from EOB

To my knowledge there are no schools turning out tradesmen with business skills. There are trade schools for the various trades and many folks working for a company will learn a trade, but neither teach about the business of building. There are tens-of-thousands of small building companies around the US—plumbing, carpentry, roofing, electrical and so on—and countless numbers of them fail every year not because they are not good tradesmen, but because they don't have business skills. The Elements of Building was written to help you understand what is required and then how to apply it to your business.

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contract the author at: eob@dplus.net

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

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Monday, May 07, 2018

bad customers

Bad customers, regardless of how well you do your job, won’t be happy. They nit-pick and complain; they don’t pay their bills; they manipulate and deceive; they blame; they don’t trust anyone; they are anxious and fearful; they are disappointed or angry most of the time; they can’t make decisions; they are unreasonable; and many are emotionally unstable. EOB, Customer

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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