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As A Contractor How Do You Measure Up?

Over 37 years ago when I originally got into my first contracting business I worked very hard and spent many hours managing my business. Unfortunately, my first contracting business failed. As I look back at the reasons for my failure, I know that I was content to simply be good enough in my management techniques, but not really great at my efforts. In today's market being simply good enough is not sufficient to succeed. You need to be truly great.

Good contractors keep accurate records and manage cash flow. Contractors that want to achieve true greatness realize that they need to analyze and evaluate all of their corporate data continuously with careful insight, applying all of their construction knowledge to better recognize area where their business needs to improve performance.

When you are calculating and putting numbers into a table you cannot beat a computer for speed and accuracy. With a low-cost computer today, a contractor can manage and keep on top of more data today that his father could have ever hoped to keep track of just 20 years ago. Today job costing, estimating, and accounting can be done with an amazing degree of accuracy and detail.

Simply counting the dollars going out on a project and making sure that the dollars coming in are greater, is not all there is to managing you company's financial needs to succeed. We need to be applying intelligent conclusions to our findings and making appropriate choices daily. That requires an understanding of financial statements and the ability to use that information to make better decisions, both short and long-term.

It is extremely important on a daily basis to evaluate your historical productivity against your actual productivity each and every day. When you include call-backs and reworks in performance, you might find it better to budget additional hours upfront to get the job done right the first time.

Also, along this line, how many times have you started into a job and realized that you had bid the job much lower than you should have bid to make a profit, but after realizing your error, jumped into the job on "all fours", took the "bull by the horns" and managed to squeak out a meager profit? After getting by with the skin on your teeth, you vowed never to get yourself into that situation again only to find yourself there sometime in the future.

We have a tendency to finish the problem job and go right on to the next job without considering the consequences of failing to properly identify the problems and mistakes that we made with the last bid and correct them BEFORE we have to deal with them on the next bid.

We have all heard the saying, "Insanity is doing something the same way over and over again and expecting different results.Unfortunately, it would appear that many of us are pointing fingers at what someone else may or may not be doing, but are not closing our own barn door concerning the history of our own estimating bids versus our actual results on the job!

Forecasting is another key activity. It might be considered planning for future financial management. While no one can predict the company's future with certainty, it's important to make some thoughtful estimates from time to time. Those 'best guesses,' such as whether to buy or lease equipment or improve your internal computer software tools, can be factored into decisions made each day.

A truly great manager realizes and studies the factors that create successful construction projects, versus the shortcomings that lead to failures, and quickly find that "squeezing a dollar" too much today can be "penny wise and pound foolish" tomorrow when they have to spend far more to correct what they could have averted with better money management at the beginning of the project. By actively managing the company's financial affairs rather than just keeping good books, contractors can build and maintain a strong foundation for future prosperity for both the company and its employees.

Article Source: http://www.newagelivingarticles.com

Phillip P Gilliam is a devoted husband and father to three daughters. He has lived in Florida for over 20 years and originally comes from Dayton, Ohio. He has a passion for business management, marketing and finance and has been utilizing software and technology for over 37 years. He is currently the President and CEO of Discover Software Inc., which is a construction software company. www.easyestimating.com

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