Cutting The Fat - Slow Down Survival Tips

November 25, 2007

Action is the key to success. Here are just a few tips on leaning out during a slow down. This is a first of an upcoming series on surviving the market slow down.

Look around your company for those employees that just don’t shine quite as brightly as others. OK, now trim the fat. It’s that easy. Use this time to get rid of non performers. Think very carefully before cutting key employees. Replacement many of the costs for replacement are hidden. Long term employees know and understand your business. It’s essential during vast change to keep together a cohesive core.

Where did salaries go through this last building craze? Through the roof. Guess what, the slope just changed. Take command of your company. Trim just five or ten percent across the board while it’s here. Will it go over well? Probably not. However, having a job is much better than standing in the unemployment line.

Be sure you’ve scrutinized your insurance policies. Be sure to adjust estimated payrolls for projected premiums. Look at your estimated tax payments. Be sure they are re-aligned. The impact on cash flow from adjusted tax deposits and premiums can only be of help.

Many costs as you downsize naturally fall. Look at your floor space. It’s not going to shrink. If like many contractors you own the building, cost compare renting a smaller space, leasing your space to a more another business. If you’ve recently built, the change may pencil.

Keep the knife sharpener handy. Cuts don’t have to be deep nor drastic by any means. From toilet paper quantities, to pencils, to the cell phone plans to benefits synch it in. Lock it up if you must and designate a gatekeeper.

Hold brain storming sessions on how savings can be achieved with key employees and their subordinates. Create departmental teams and offer incentives for finding ways to save or increase efficiencies.

Take a very close look at your material handling or lack thereof it. Take your field guys to the conference room. Audit material handling and develop strict material handling training and processes. No nail shall go unclaimed. No board shall be cut too short. Use them as your tool for coming up with best practices. Most of it should stick when the heat dials up again. You’ll be operating as the new trimmer you.

Renegotiate with vendors. How low can they go? Negotiate a long term relationship to stabilize your costs if at all possible. Be sure to leave market adjustment allowances built into the agreements.

Stay tuned for more. Coming soon are moves that generate cash plus tips on running a successful construction company.

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TrueNorth Development

March 12, 2007

Consulting company specializing in the homebuilding industry.

TrueNorth Development
141 North Center, Suite 201
Northville, MI 48167
Phone: 248-348-6011
Fax: 248-305-6613
www.truen.com
Scott Sedman, President
scott@truen.com

Recent Articles:

The Last Word on Lean - Great article on some areas where Lean Construction can help not only homebuilders but any contractor

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Candels Consulting - Electrical Estimating Service

February 28, 2007

Companies that do take-offs and help prepare estimates can be effective for helping a contractor grow if they are managed properly. Definitely worth investigating if you believe you are in need of estimating help. www.candels-consulting.com

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Joe Salimando - www.electricalcontractor.com

February 26, 2007

Last week I was at the Electric West show and met Joe - he was a wealth of knowledge about all aspects of the construction industry, specifically the electrical industry. Well worth adding to your contacts:

Joe Salimando
EFJ Enterprises
PMB #683
11350 Random Hills Road, Suite 800
Fairfax, VA 22030
ecdotcom@gmail.com

You can find him on the web at

www.electricalcontractor.com

The Electrical Distribution Magazine (www.tedmag.com)
Rexel - Power Outlet Magazine, Publisher
Engineering Inc Magazine Articles
Partners In Progress (www.pinp.org), a SMACNA website
Energy User News (www.energyusernews.com) Articles
Electrical Contractor magazine (www.ecmag) - search on 'Salimando'

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Joe Salimando - www.electricalcontractor.com

Last week I was at the Electric West show and met Joe - he was a wealth of knowledge about all aspects of the construction industry, specifically the electrical industry. Well worth adding to your contacts:

Joe Salimando
EFJ Enterprises
PMB #683
11350 Random Hills Road, Suite 800
Fairfax, VA 22030
ecdotcom@gmail.com

You can find him on the web at

www.electricalcontractor.com

The Electrical Distribution Magazine (www.tedmag.com)
Rexel - Power Outlet Magazine, Publisher
Engineering Inc Magazine Articles
Partners In Progress (www.pinp.org), a SMACNA website
Energy User News (www.energyusernews.com) Articles
Electrical Contractor magazine (www.ecmag) - search on 'Salimando'

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Linda Hanson - Business Development for Contractors

February 22, 2007

Linda Hanson is a management consultant, business speaker and writer. She is President of LLH Enterprises with offices in Dallas and Toronto. Linda can be reached at lhanson@llhenterprises.com

She recently got my attention through a great article in IEC Insights magazine - unfortunately the article is not available online but several of her other articles are available on her website at www.llhenterprises.com

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Jim Adrian (Adrian International) Construction Productivity Expert

February 11, 2007

Yesterday I was having lunch with a client and he said that after reading a book by Jim Adrian on construction productivity it helped him put together a claim for over $100,000 in lost productivity. I'm always interested in anyone or anything that can help improve labor productivity on a jobsite.

Dr. James Adrian
Adrian International LLC
5317 N. Woodview Ave.
Peoria, IL 61614
jadrian@insightbb.com
http://hilltop.bradley.edu/~jadrian/

Jim has written over a dozen books, speaks regularly on the subject of construction productivity, consults on major projects and authors a great newsletter. I just finished reading one newsletter article called "Five Leadership Skills for Implementing Productivity Improvement" which makes several great points that really stood out.

First of all, construction productivity is not about a one-shot, quick fix. It takes time to put the systems and culture in place. Leaders have to be aware of this and commit to a long-term plan for improvement. We often see contractors jump into a new market area and take losses of hundreds of thousands, even millions of dollars and calling it all "learning curve" but that same contractor will turn around and send three people to a seminar and expect instant fixes.

Secondly Jim points to a study that showed 7% of the time spent by craftspeople is waiting for further instructions from their supervisors on what to do next. Putting this into a quantifiable perspective on a 15,000 man hour project this equates to wasting about $50,000 just waiting for instructions on what to do next. A solid project pre-planning process can help minimize this as well as using a very simple tool we call the Project Action Items list which the foreman or superintendent makes up daily and provides to everyone on the crew. If there is enough work clearly laid-out and materials are available craftspeople will all perform. Always having a plan 'B' will keep productivity high even when the inevitable unforeseen changes come along.

The third of many great points is that there are two ways of dealing with problems - one is to react to them and become a victim. The other is to proactively deal with them and keep the project on track. Rain? Reorganize the schedule. Bad plans? Get very proactive with RFI's including making your own suggestions to speed approval.

Overall there are too many positive ideas that Jim brings up to list. If he is anywhere near you speaking I highly suggest getting out to see him and at least a few of his books should be on your shelf.

Books by James J. Adrian

Construction Productivity
Construction Contracting
Construction Claims
Construction Estimating
Construction Accounting

When you are building a project you don't hesitate to bring in specialists for particular pieces of the project. Why is it any different when building your business? Often a highly specialized consultant can provide a huge impact whether it is in marketing, strategic planning help, "people processes," project management training or process documentation. This is a new category for the blog and will highlight various consultants specializing in the construciton industry.

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Kevin Dougherty - Kevlar Consulting

February 06, 2007

Kevin writes a variety of articles, provides training seminars and consulting for the construction industry.

Kevin L. Dougherty
1710 N Lake Shore Drive
Sarasota, FL. 34231
(714) 680-6585
(941) 926-0141 PHONE 2
SalesAcademy@verizon.net
www.kevinldougherty.com

He got my attention from his work with IEC and SMACNA. I'm just reading a great article he wrote called "21 Steps to More Profit" which is simple and to the point.


When you are building a project you don't hesitate to bring in specialists for particular pieces of the project. Why is it any different when building your business? Often a highly specialized consultant can provide a huge impact whether it is in marketing, strategic planning help, "people processes," project management training or process documentation. This is a new category for the blog and will highlight various consultants specializing in the construciton industry.

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