Masonry Magazine October 2007 Page. 59
We should call hassles and busy work what they actually are: pure profit.
"Sorry, but..." You finish the sentence, because you've heard it before. Things like, "We'll try and make it up on the next one." And you just swallow a few thousand.
Instead, this was one of those times that you got to feel good about how your company handled itself, and expected to get paid, not just hoped for it. And, there's a big difference between the two. We weren't begging. It was clear. It was obvious.
It helped that we had worked for a stand-up company that was willing to admit mistakes, and pay the bills. But it mainly helped that the PM side of our company had a system in place to check old change order requests, and other such things that we sometimes refer to as "hassles" and "busy work." We should really call these hassles and busy work what they actually are: pure profit. It's pure, because all of the expenses had already been paid. This was just $30,000, an extra $30,000, which went directly to the bottom line a nice little extra.
And I was looking good. Coach Gary says: Keep your head in the game. Never give up. Give it all you've got. Put systems in place to protect your profits. Look good!
Gary Micheloni is a working project manager, consultant, speaker and author of the new book, "Get Paid for a Change! For further information and insight on the Full Contact Project Management approach, simply email coachgary@fullcontactPM.com.
Copyright © 2007, Gary Micheloni and Full Contact Project Management
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A Big Fish in a Small Pond
MASONRY NEWS CONTRACTOR TIP
Several years ago. Lang Masonry was a small masonry contractor selling about $1 million a year. We were also very profitable, netting 25 percent per year. Now, we are doing $8 million to $10 million a year, trying to net 5 percent to 10 percent, which is still a great bottom line. The average mason contractor only nets around 3 percent, if indeed he survives.
As a mason contractor, are you looking for market share (volume), or are you looking for profit share of your market? How hard is profit share to get when you have all the market share? Here's a decision I had to make years ago: A friend of mine, Mike Story, and I had a few beers one night discussing this situation. I was telling Mike that I did not know whether I should try to go bigger or earn my $1 million in sales per year and be happy.
"I feel like a big fish in a small pond," I told him. "If I don't get out, I am going to end up eating all the small fish and starve to death." Mike responded, "Yeah, there's only one channel to swim through, and if you don't get through that channel quick, you will be too large to swim through it. Then, when you do try to swim through it, you will be so big you will get stuck in the channel and still starve to death. So you better make up your mind what you are going to do, and do it now. "Guess what is on the other side of the channel?" he asked. "What?" I answered. "A great big ocean," he said. "And as soon as you get into it, there will be much bigger fish trying to eat you alive."
What a dilemma to be in. It sure looked like a no-win situation, didn't it? I thought long and hard about this and decided to dive right into the ocean, head first.
Even though there were a few years that we fell into the mode of just trying to grow to say we were big, we have learned along the way to look for profit share of our masonry market instead of market share of the same market. Whether you decide to get bigger or stay smaller, don't do it just to be doing it. Watch your bottom line instead of total sales; it's much more important. Become more profitable by finding better ways of doing things. Make small changes daily that will make you and your people more productive.
Over a period, the right changes can make you a fortune. And, a word of caution for when you do get big: Don't forget the way you did things as a smaller company to get there. Let your people use the right tools and equipment to make their jobs easier and more profitable. Isn't this what you did when you were running the job yourself?
I do seminars for mason contractors at Lang Masonry's headquarters in Waterford, Ohio. These are the types of things we teach to help mason contractors become more profitable. If you would like to attend, give Linda a call at 800-417-9272. You may be amazed by what these seminars have done for the hundreds of mason contractors who have attended. In fact, call and ask for a list of past attendees, and they can tell you for themselves. We'd love to have you come see how this fish has survived the crashing ocean waves.
Provided by Damian Lang, President of Lang Masonry Contractors, Inc., and EZ Greet Corp.
October 2007
Masonry 57