"Practical, direct, no-nonsense. Wish I'd had this 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)

Monday, March 20, 2017

table of content for The Elements of Building

Rules, Ethics, Opinions, Honesty, Integrity, Communication, Education, Quality, Attitude, Image, Vision, Goals, Persistence, Safety, Pacing, Fear, Marketing, Sales, Money, Overhead, Profit, Management, Administration, Business Skills, The Business Of Building, Gratitude, Humility, Builder, Building, Residential Building, Residential Business, Builder Notes, Principles, Business Strategies, Practices Off & On The Job, Human Relations, Being A Builder, Participants, Personnel, Personnel Notes, Miscellaneous, Hiring, Employee Relations, Firing, Subcontractor, Subcontractor Notes, Sub, Subs, Finding Subs, Bidding, Contracts, Licenses, Insurance, Managing Subs, Suppliers, Supplier Notes, Selecting Suppliers, Working With Suppliers, Customer, Client, Owner, Customer Notes, Getting Work, Pricing, Job Preparation, On The Job, Planning, Zoning, Codes, Inspections, Planning, Zoning Notes, Miscellaneous, Professionals, Professionals Notes, Accounting; Bookkeeper, Accountant, CPA, Accounting Notes, Miscellaneous, Computer Programs And Systems, Computers, Programs, CPA's, Accountants, Bookkeepers, Practices, Financial Planning, Financial Advisor, Bankers, Lenders, Loans, Consultant, Consultant Notes, Hiring Consultants, Working With Consultants, Designer, Designer Notes, Principles, Bidding With Designers, Hiring Designers, On The Job, Design-Build Versus Design-Bid-Build, Engineering, Engineer, Engineering Notes, Home Inspection, Home Inspector, Home Inspection Notes, Insurance, Agent, Broker, Insurance Notes, Selecting A Broker/Agent, Managing Insurance, Claims, Lawyer, Attorney, Lawyer Notes, Real Estate Broker/Agent, Real Estates Notes, Choosing An Agent, Working With Agents, Buying And Selling, Contracts, Estimating, Types & Parts Of Estimates, Types Of Contracts, Ways In Which Jobs Are Contracted, Estimating Notes, Principles, Creating An Estimate, Estimates And Clients, Bidding, Bidding Notes, Principles, Process, Clients, Money, Money Definitions, Money Notes, Principles, Strategies, Money And Jobs, Terms & Definitions, Appendix, Lists, Forms, Contracts, Examples, Site Visit Check List, New Home Construction Schedule, Draw Schedule, Draw Schedule, Subcontractor Agreement, Small Job Contract, Change Order, Construction Index, Pre-qualifying Client Phone Interview, Client Interview, Bibliography, General Construction, Estimating, Construction References Construction Standards, Indexes, Specifications, Codes, Magazines, Periodicals, Inspirational Business Books, Printed Forms, Catalogs, Residential Construction, Home Building, The Business Of Building, Building, Construction, Trades, Tradesmen, Subs, Subcontractors, Contractor, Contracts, Money, Managing Money, Ethics, Residential Building, Residential Builder, Residential, New Home Builder, New Home Building, Building Business, New Home, Custom Building, Custom New Home Builder, Custom New Home, Sub, Subs, Subcontractor, Change Orders, Allowance, Allowances, Building Book, Building Books, Builder, Builders, Design Build, Design Building, On The Job, Managing A Job Site, Managing A Job, Bidding, Estimating, Bidding Defined, Estimating Defined, Licenses, Accounting, Bookkeeping, Financial Planning, For Builders, Financial Planning For Tradesmen, Money, Savings, Construction Definitions, Definitions Building, Building Definitions

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Monday, March 13, 2017

insurance

When you get your insurance policies, meet with your agent—a few times if necessary—to go over them thoroughly until you understand every term, every clause, in each policy. This is not fun, and some agents may resent it. However, over the course of your career you will pay an enormous amount of money for insurance; therefore, expecting coaching from your agent is perfectly reasonable.

Monday, March 06, 2017

RESTAURANTS vs CONTRACTORS

Next to restaurants contractors fail more than any other business. If you take into account those of us who slip in and out of business without a leaving a ripple, contractors fail even more than restaurants. In a residential construction business, trade and business skills are inseparable, although many of us don’t learn this until our business fails and even then some of us don't get it.   
Most tradesmen think their trade skills are the business. But business skills are as important as trade skills when starting out and if the business is to grow and succeed they quickly become more important.

The Elements of Building was written to help skilled tradesmen transition to successful business owner.  

Tuesday, February 28, 2017

ZONING

Zoning may or may not be involved in a given project. If you are to build an addition on an existing home and the building parameters—building height, side- and rear-yard setbacks—fall within what is permitted in the zoning laws, you should only need a cursory zoning review. If features of the project exceed what is allowed in the zoning rules, the building will have to be designed to fit within the restrictions, or an application for a variance submitted requesting that the rules be modified for this project. The variance process is generally time consuming and the outcome is rarely assured.
EOB, Planning/Zoning Notes

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Sunday, February 19, 2017

MONEY: a way to measure value

For every builder who has made and kept a fortune, there are a hundred who made one and lost it, some several times. When business is good, decisions are made as if the money will continue forever, but construction is a business of cycles, and when work slows a company's weakness shows quickly as its financial obligations overwhelm it. Learn to manage money. Take classes, read books, set long-term goals, study business cycles, and understand what it means to overextend. In good times and bad be conservative—even frugal—control spending, keep overhead low, keep loans to a minimum, establish and fund a cash reserve account, and build assets.
EOB, Rules, Ethics, & Opinions 

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Sunday, February 12, 2017

return trips

"Allow money in your estimate for one or two return trips—depending on the size of the job—some months after a job is complete to touch up items as a gesture of good will and to strengthen your most important marketing tool: referrals from satisfied customers." EOB, Customer Notes

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