493: Management Priorities For New And Experienced Construction Company Owners

This Podcast Is Episode Number 493, And It’s About Management Priorities For New And Experienced Construction Company In the past, Construction Project Managers were laborers or served an apprenticeship in one of the skilled construction trades and were promoted to foreman. This meant many people were more comfortable in manual labor without management skills. And when “things” were put in charge of “people,” the results were not usually favorable. Because of this, many construction companies failed and went out of business due to the Cost of Chaos in their businesses. And it is still happening today. In the late 20th century, construction and construction management were separated into individual disciplines, each with its methodologies, terms, and definitions.

Project Management Institute developed a set of standards and guidelines, including a glossary of terms to make it possible for construction project managers worldwide to have a common language to communicate.

In today’s construction business world, there is a need for excellent project management. Highly skilled and qualified Construction Project Managers on your payroll can provide your company with another competitive advantage over your competition which could be like having a money tree in your backyard. As a result, you can put more money in the bank to operate and grow your construction business.

Whether you just started your construction business and are a one-person company (just looking to hire a subcontractor for other parts of your project) or a weathered construction company owner looking to regain skills to operate your business confidently, it is essential to prioritize these management guidelines:

1. Put together a solid advisory team

Starting a business and owning a construction business can be a lonely process, and thinking you can do it all yourself is the road to extra stress and pressure. Study successful business owners, and you’ll find they have surrounded themselves with a strong group of advisers.

A typical core team would include an accountant, a lawyer, a banker, and a mentor, such as an experienced business person you admire. You can then add experts who can give you quality advice on specialist areas where you may lack skills, such as finance, production, marketing, or technology.

2. Choose the proper business structure – with advice

Should you start as a sole proprietor, a limited liability company, a partnership, or something else? Get advice, as each structure involves legal, regulatory, and tax issues.

Think beyond this year. Which structure will carry the most credibility with customers? What’s the best system for expanding the business or taking in partners? What form would best suit future investors? Think also of succession – one day, you will want to sell or pass on the business to family, staff, or an outside buyer.

3. Sort out all compliance requirements

You don’t want to be distracted by compliance issues once you’re in business.

List everything you need to sort out now, from health and safety issues to permits and consents required from Federal, State, or local authorities. If you’re starting a business from home, do you need permission? Will your business involve hazardous activities, noise, or toxic chemicals? If so, what licenses do you need, and what health and safety measures do you need to take?

What taxes do you have to pay, and when? What is a sound system for getting this done, so you don’t miss any payments or incur penalties?

Make a checklist and work systematically through it with help from your advisers.

4. Set up well-built systems

Good business is all about substantial systems. To run your business well, you need efficient processes.

Time spent setting up simple but effective systems will pay off handsomely. Think about everything from production and work processes to service and billing. With good strategies, you can:

Run the business more efficiently and delegate more confidently. Deliver efficient and consistent quality in products, services, and customer delivery. Train new staff more quickly if they have clear operating manuals to follow. Delegate or take time off with more confidence that others can follow operating manuals. Add value to your business in the eyes of a future buyer. Build the foundation you will need to future-proof your business. 5. Develop good credit management

You need a fast, efficient, consistent credit management process if you sell on credit. As a new business, you need the money owed to you as soon as possible to pay bills and lower your interest costs. Never let things slide, or some customers will treat you as a source of cheap finance. Key points:

Check the credit standing of all new customers, even though you may be eager for their business. Make sure customers understand your terms of trade and sign an agreement with them. Set credit limits and a system to flag…