Masonry Magazine December 2007 Page. 45
Without clear targets and a plan for the future, the company will never fulfill this dream. The result of spending every dollar the company earns on overhead and salaries. The purpose of your business is to build equity and wealth for the owner and key management people, so they can eventually sell or pass on the business, retire and live off the income stream from the wealth created. Without clear targets and a plan for the future, the company will never fulfill this dream.
Too big, too fast, with no cash. No cash-flow controls - It is too easy to grow your construction or design-build business by being low bid. The No. 1 reason companies go broke is that they outgrow their working capital. Before you take on more work than you can handle, assure you have the resources to do the work. Plan to have the additional overhead, personnel and equipment required to manage projects properly and get paid in a normal manner. Keep adequate reserves on hand, in case payments get delayed. Most contractors need a minimum of 20 percent of their backlogs in working capital to stay comfortable and afloat.
Go with the flow. No marketing or sales plans - Companies without specific written marketing and sales plans tend to bid whatever comes in the door. This is a reactive approach to business and will not take you where you want to go. Successful companies have an ongoing approach to sales and methodically approach the markets and customers they want. Identify your top 20 customer targets, and make them a priority. The choice is yours. Strive and thrive, or fail and bail! Consider these seven factors to chart your future in any economy or business environment as it changes.
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George Hedley owns Hedley Construction and Hardhat Presentations, and is the author of the "The Business Success Blueprint Series," now available in eight workbook and audio CD sets. Hedley is available to speak at your organization on his proven system to build profits, people, customers and wealth. Construction company owners are invited to attend his two-day Profit-Builder Circle boot camps held regularly. Email him at gh@hardhatpresentations.com to receive a free copy of his book, "Everything Contractors Know About Making A Profit." You can also sign up for his free management e-newsletter, visit his online bookstore, or receive more information by calling 800-851-8553 or visiting www.hardhatpresentations.com
Kennison
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December 2007
Masonry
43