Construction Business Management

Nick Ganaway

• Publisher: Routledge
• Year: 2007
• ISBN:
  9781136414879
• Edition: 1
• Topic: Arquitectura
• Subtopic: Arquitectura general

Only 43 per cent of U.S. construction firms remain in business after four years. Why? Inadequate management, according to the U.S. Small Business Administration. This is surprising because most construction firms are formed by ambitious construction project managers, executives and tradesmen who have excelled at what they have been doing. But as experienced as these entrepreneurs may be, they are not likely prepared to take on the full range of responsibilities forced on them in managing the business of construction in its entirety.While this business failure rate and its causes are based on U.S. experience, available data from a number of other industrialized countries shows they are similar.This book describes in detail what the business side of the construction equation requires of the construction firm owner. The contractor who quickly learns these requirements can identify and avoid or manage around the pitfalls that cause the high failure rate in our industry and put his or her construction firm on a level playing field with the best-run companies in the business. The detailed duties of the owner, whether in the U.S., U.K., Australia or Canada, are a common theme throughout the book. The author, Nick Ganaway, speaks peer-to-peer, and the book is sprinkled with supporting examples from his own experience. He is immersed in the industry and this book is "based on the things I've learned, used, and refined as a light-commercial general contractor in the course of starting and operating my own construction firm for 25 years." The contractor doing $5 million or $50 million or more in annual sales or the equivalent amount in other countries, or the entrepreneur who is just starting up, can use the tried and proven material in this book to build a business that is profitable, enjoyable, and enduring.Additionally, the book devotes a chapter to specializing in chain-store construction.

Chapter 1

Do you have what it takes?

Leadership consists not in degrees of technique but in traits of character: It requires moral rather than athletic or intellectual effort

– Lewis H. Lapham, Money and Class in America

Before going further, let’s look at some of the characteristics you must have in order to succeed as your own boss. Starting and running your own business are two of the toughest jobs you or anyone can have. You may not have a boss looking over your shoulder telling you what to do, but you actually have the most demanding boss of all. This tyrant lives right inside you, and will demand your attention every minute of your day. He’ll be there to ask you hard questions, judge your performance, and nag you about tomorrow’s meeting when you go to bed at night. He expects you to risk a lot of your assets, maybe all of them, especially in the early years. It’s low pay or no pay for you, but he won’t hear to your missing payday for your employees. Most work weeks for you are six or seven days long, and this ogre wants you to be the first one in the office and the last one to leave. He turns thumbs down on the new truck you’ve decided you need. This boss expects you to do many things at one time and perform them with excellence, even though you haven’t mastered all of them yet.

Why would you work for this guy? You ask. The answer is incomprehensible to those who have opted for a more mainstream existence, yet reasonable to us who go out on our own: It’s because getting our own business off the ground, creating our own opportunities, blazing our way through the thickets we encounter, and driving forward when the darkest clouds loom give us a confidence, a pride, a joy of life that cannot be bought, bargained for, or willed to us by a rich uncle. It’s something that wouldn’t be the same if we hadn’t paid for it with sweat, tears, worry, and sacrifice. But as we grow and learn, this live-in drill sergeant of a boss begins to give us some slack, some tastes of the milk and honey. If self-employment as a building contractor is not for the timid of spirit, neither is it for the weak of character. If we lie, we will not be believed. If we don’t follow through with our commitments, no one will place their faith in us. If we cheat, we’ll be found out—even if not by others, we still know about it ourselves. Aside from any moral argument, lacking character dooms us to mediocrity at best in whatever we do. A sound ethical compass will be at the top of almost any top-ten list of must-have leadership qualities.

1.1 Essential Traits

Consider the following characteristics when weighing whether owning your own construction company or other business is right for you. Having even all of them does not promise success, nor does failing some of them now mean you won’t rise to meet them when the time comes.

1.1.1 Initiative

You know it if you’re capable of managing yourself: Something inside drives you to understand and act on the requirements of your endeavors. You’re ever alert for some fresh idea that you can exploit, and you’ve long cultivated your mind to receive it. You’re going over the day’s To-Do list before the alarm clock goes off in the morning and you can’t wait to get started on it. Each time the phone rings you wonder what new opportunity has found its way to you. You drive home in the evenings thinking of the day’s victories, however large or small, and tomorrow’s opportunities. You learn from your setbacks and quickly put them behind you.

1.1.2 Passion

Nothing difficult is accomplished without passion. Your passion and intensity not only fuel your own fires but lead others to play above their heads, to do more than is required of them. Winners are passionate.

Jack Welch, the former chairman of General Electric (GE), wrote this about passion in his book, Jack: Straight From the Gut,

Making initiatives successful is all about focus and passionate commitment.

Welch also said,

For me, intensity covers a lot of sins. If there’s one characteristic all winners share, it’s that they care more than anyone else. No detail is too small to sweat or too large to dream. Over the years, I’ve always looked for this characteristic in the leaders we selected. It doesn’t mean loud or flamboyant. It’s something that comes from deep inside.

1.1.3 Stress Tolerance

Few owners of even the best-run firms in almost any industry have dodged the stresses of dealing with unreasonable characters, costly mistakes, slow-paying customers, employee problems, endless governmental regulation, disappointing financial reports, unfavorable market conditions, angry customers, uncooperative bankers, rising costs, and other challenging situations too numerous to name. To succeed in your business, you must put these in the perspective of your larger picture and move forward. You cannot allow the resulting emotions to dominate your time and energy, impair your decision-making ability, or dim your overall attitude.

1.1.4 Reliability (Follow-Through)

Do What You Say You Will Do When You Say You Will Do It. Nothing builds credibility better, and nothing is more important to cementing effective relationships with your employees, customers, outside contractors, banks, insurance carrier, and others you depend on for your success. Keeping commitments is your Eleventh Commandment. One-time neglect to return a phone call can leave a lasting memory. Failure to keep a major commitment such as a delivery schedule can fracture the good image you’ve spent years building.

1.1.5 Willingness to Work While others Play

Owning and operating a construction firm is not a five-day, eight-to-five occupation. You can count on six or even seven long days in the beginning while you’re setting up your company’s infrastructure, simultaneously building projects, and trying to get new ones. As you become more established, plan on fifty- to sixtyhour weeks routinely, and often longer. Your vacation, when you get one, will no longer be a time when you can forget about everything back at the office. Not all of these hours will be at the office or jobsite. Some will be spent at home in the evenings or on weekends planning, reading, or just mulling over business matters.

If you are unable or unwilling to give this amount of time to your business, reconsider starting your own business. However, for most self-employed business men and women, the hours aren’t burdensome. They fly by, and the day is gone before they want it to be.

1.1.6 Unyielding Positive Attitude

Thomas Jefferson said, “Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude.” The “right” mental attitude is belief in yourself that you can and will defeat the obstacles that come your way and turn them into opportunities. The writer Charles Swindoll says, “ life is 10 percent what happens to me and 90 percent how I react to it.”

1.1.7 Mental Toughness

There are times when it gets lonely for the sole owner of a business. You’re forced to make decisions that you know will not have perfect outcomes. Sometimes they are agonizing, yet there is really no one who can totally comprehend what you may be going through because it is impossible for another person to relate to the unique set of financial and practical consequences you face. That’s when you draw on your belief in yourself; remember other rough times that you’ve pulled through; and remind yourself that you did all your homework, dotted all the i’s, and never expected it to be all roses. The ancient philosopher Epictetus said, “Difficulties show men what they are.”

1.1.8 Attention to Detail

The attention you give to detail becomes evident in most aspects of your life, such as your personal appearance, your home, even the condition of the car or truck you drive. In your construction business, your attention to detail shows up in the people you hire, the bids you send out, the quality of your work, and the image presented by your organization to prospective customers and countless others whose opinion may have an impact on your success.

1.1.9 Sense of Urgency

In many situations there is a brief moment during which an opportunity must be grasped or it is lost forever.

1.1.10 Self-Control

Being on time. Keeping a cool head in the face of adversity. Spending within your means. Practicing sensible personal habits. The list goes on. These impact both your personal and your business life.

1.1.11 Thirst for Knowledge

Knowledge of construction and of running a business are only the beginning of what you need to know. Politics, the stock market, interest rates, general business trends, who’s who and what’s what in your customers’ industries, and knowledge of your competitors are also among the things that require pipelines of information flowing to you. Reading newspapers, magazines, and books that provide such information will put you a step ahead of much of your competition, and so must become part of your daily routine.

1.1.12 Ability to get Along with others

There may be no more valuable skill than the ability to deal successfully with people. The human quest for this skill is demonstrated, for instance, by the enduring demand for Dale Carnegie’s book, How to Win Friends and Influence People. Based on his extensive research, Carnegie declared that financial success is due 15 percent to professional knowledge and 85 percent to “the ability to express ideas, to assume leadership, and to arouse enthusiasm among people.”

Again, don’t be discouraged if you haven’t yet conquered all of these traits. Internalizing their importance gets you halfway there. Working with purpose and determination can take you the rest of the way.

Most of us who’ve taken the plunge into entrepreneurship wouldn’t go back if we could. Owning our own business is not a destination, but a journey we hope never ends because we have the best seat on the train, ...