Jack of all trades is a master of none, so why not become a master and hire jacks for all the trades?
You need skill, time, effort, and passion to master a trade or you can say to start a construction business. However, sometimes the passion that made you start a business is not necessarily equal to the passion you need to run a business. You need to spend more time, you need to prioritize, and you need to be efficient.
Manny and Carlito have a very special guest on this podcast, Matthew from e6 Analytics where he conveniently explains many dos and don’ts contractors should follow.
Episode 22 is an effort made by “The Construction Life” to make contractors realize to do things the right way for the prestige of this industry. Guys usually master a trade but they don’t know how to create and maintain a business so they can hire e6 Analytics to save a big chunk of their time.
What is e6 Analytics?
Where “e” stands for easy, 6 stands for “1+2+3=6”, e6 Analytics provides services to manage your operations, finance, and marketing and lets you focus on the work you are doing. Contractors usually don’t adapt to change with time. They ignore the analytics, paperwork, bookkeeping, financials, monitoring, and other vital aspects of a business. If you know a trade but don’t know from where you should start, or even if you are a seasoned contractor who knows the importance of these things but don’t have enough time for it, e6 Analytics will save you that mountain of time to do the actual work!
If these questions pop up in your mind e6 Analytics is for you, e.g.
- How to make the right quotes?
- How to take stuff learned from the job you finished?
- Did I make enough money from this job? What was the percentage?
- Do I have to go back and see things?
Here are some key takeaways from today’s episode, explained conveniently by Matthew!
Reactive Business Approach
Contractors usually don’t close the job properly you think paperwork is ready, invoices are ready so you can move on to the next job. People usually have a reactive business approach when they lose money, they think they’ll work harder next time or they will take up more jobs. Though this approach is successful sometimes, the harder way is not better than the smarter way. Why not take up lesser jobs and get more out of them. You need to understand the financial aspects of your work. Set a percentage you will earn from the budget, be it 10% or 30%, make sure to earn it well.
A balanced relationship with clients
You should never become best friends with your clients, it doesn’t mean you have to be rude to them. Make them comfortable but don’t make them expect you to do free things/changes for them. Until the project is done, don’t be so friendly, business and pleasure should be separate. Document every single thing, they have to be aware of everything. Discuss the project progress with them, but don’t get personal!
The Three Ignored Areas by Contractors
Matthew beautifully explained three areas that are avoided by the contractors and that are vital to the success of a business. These are
- PROGRESS MONITORING
- CLOSING THE JOB, THE RIGHT WAY
Matthew explains how contractors ignore the technicalities in the contract and get in trouble later on. Here are the three essential components you need to cater in your contract!
- Defined Scope
Get your scope of work identified with your client, document everything. Don’t go into excessive details, just have a clear and concise scope.
- Agree to a price
No matter how small or big, write the price and don’t write a ballpark figure. Write the price categorically, because, in construction, nothing is certain, it can move up or down. Suppose the client wants another product after the contract, or the price goes up than the stated one, you cannot pay out of your pocket. The right contract puts the contractor to ease and gives freedom to such time and price. change order
Clients should know when you will end your project clients know, leave a margin because you rely on trades to complete the job.
Change in the original contract
Also remember that if a client wants a change in the original scope of work, you need to revamp your contract. Incorporate the
- Impact on budget
- Scope update
- Modified Schedule
- MONITOR THE PROGRESS
If you want to maintain a good relationship with the client, and deliver a high-quality product, you have to monitor your progress with time. e6 Analytics has figured out a way to analyze your team. They help you save bucks from small things and ultimately, they add up to your net profit. You should know the workflow, generate data of how people on the job site are working. When they know they are being monitored they work more efficiently. Anything can be tracked if you know what you want to track, you will ultimately figure out how. Matthew tells how you should not use one data stream, look at the other things, work they do, types of equipment they are given to work, and other factors that might affect their performance. Don’t make good people crap because of the things they can’t control.
- Money Flow and Communication
Not every contractor has cash in hand or big numbers in their account. So, they should make sure the money keeps flowing to them at the right time when needed without interrupting the timeline. Keep communicating monitoring reports, money spent, where you spent, the status of payments to the client, so he doesn’t feel left out of things. Cash flow management and communication also build your rapport and credibility in eyes of the client.
- CLOSE THE JOB PROPERLY
You get your payment, you have the receipts, you deliver the product and you move on to the next project. This is what every other contractor is doing. Nobody knows how to close the job properly. Usually, contractors avoid major issues dealing with them at the moment, they properly manage the contract. You have to note down everything, what if after everything a tradesperson bills you for something and you are clueless about what to do now? You cannot go back to clients telling them you forgot about this. So ultimately you will have to bear the loss. So what did you make out the project you were working on?
So, you have to do Bookkeeping (Income statements, balance sheets, etc.), Calculate Financial ratios, to see if you are profitable or not, it doesn’t matter if you are doing a $100,000 project, what matters is what you made out of it. You need to understand how your business is functioning from a number’s perspective.
If you can’t do it, have someone do it for you… Here are the details of the Instagram handles of e6 Analytics and let them handle it!