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ОглавлениеBecoming a contractor is a unique endeavor because contractors work out among their fellow citizens, unlike most retail or professional businesses who draw customers to their establishments. Contractors, on the other hand, spend most of their time away from their office or their home base. Typically they are working in apartment buildings, client’s offices, or on the property of real estate owners.
Contractors Are Important to Their Communities
Contractors do much more than develop property. In many ways they improve their clients’ and communities’ quality of life . For many clients, their homes are their castles, their property, their domains. They spend countless hours in and around their homes and feel it’s important to be comfortable with their surroundings. Of course they all have their own individual likes and dislikes. While one may require a quiet but colorful garden for introspective thought, another may need a high-tech “great room” for entertaining friends and family. For many businesses, image is an important factor in their success. Perhaps a large fountain with multicolored lights is what they need, or a comfortable meeting room with the latest in high-tech communications devices. Most municipalities have specific requirements and standards for the design of subdivisions, park land, and urban spaces. Creative contractors meet the varying needs of all these groups, completing their work in ways that will improve the health and welfare of the community.
Contractors also improve and ensure the safety of their clients. Proper design and construction of the spaces that people use for living, working, and recreation ensure a safe environment for these activities. Contractors must be knowledgeable about local building codes as well as industry-accepted methods of installation. Construction contractors improve the safety of the community by:
Providing safe working conditions for their employees
Requiring employees to use safety equipment such as eye/ear protection and hard hats
Ensuring that buildings are fire safe
Using construction materials that ensure the structural integrity of a building
Designing proper surface grading to provide acceptable drainage of rainwater
Installing handicap ramps and railings to meet building codes
Installing septic systems for environmental safety
Utilizing sight safety triangles at roadway and driveway intersections for safe driving conditions
Owning and managing your own business can be very rewarding—both mentally and financially. However, do not think that it is always a bed of roses. Operating your own business is much like a rose garden. The vibrant colors of the garden provide beauty and joy to passersby, but for those who get too close and do not pay attention to what they are doing, the sharp thorns can cause pain and discomfort. As you will learn later in the book, paying close attention to the details of your daily work will keep you from being stuck by the thorny issues that surround most businesses.
Do You Have What It Takes?—Part I
Contractors come in all sizes, shapes, and temperaments. But the one trait they all seem to have in common is a burning desire to start and operate their own business. If you have this burning desire to become your own boss, to work independently, to make all the important decisions required to run a successful business and you are willing to assume full responsibility for your decisions, you pass the first test on starting your own business. You also have to be willing to spend long hours and make many personal sacrifices to achieve success. There will be times when your family life will need to make sacrifices because of the demands of your business. Do you have a good partner or spouse who understands and accepts these demands? Starting a business is difficult and stressful. It’s very important to have a supportive family to get through the tough times when running your own business. Finally, you need to have enough self-confidence to stand by your decisions as well as enough self-discipline to persevere and build your new business.
tip
You can find accredited colleges in architecture, landscape architecture, and engineering. Go to the National Architectural Accrediting Board at www.naab.org. The American Society of Landscape Architects at https://asla.org/schools.aspx or the American Society of Engineering Education at www.asee.org.
One of the intangible and hard-to-define qualities found in the most effective business owners is the ability to stand back and look at the big picture. Much like the race car drivers of the past, successful business owners must be able to understand and recognize the multitude of situations that affect the daily activities of their business. The race car driver, for obvious reasons, is concerned with speed. However, pure speed is not the only factor in winning the race. While driving as fast as he can, the driver must be aware of tire pressure, engine temperature, and the front end of the car that controls steering, among many other things, such as the positions of the other cars on the track. These factors influence both the speed and the sustainability of the car. Low tire pressure will make the car more difficult to steer, which will affect speed; high engine temperature will effect engine performance and also reduce speed. The driver must be able to look at the big picture and understand how the smallest of details interact and influence the final result of the race. The best drivers are also able to look at an anomaly and realize that it may not affect the performance of their car. Today, drivers, much like modern business owners, are assisted by computer technology and a team that helps to interpret the data. But this help does not reduce the importance of understanding how the numerous bits and pieces of a business react and influence each other—and when to ignore what seems to be a problem when it is of little or no significance to the operation of the business. Today’s technology provides various tools for race car drivers and for contractors. The key is knowing how to utilize such tools to your advantage and when to use them.
Do You Have the Proper Background?
Individual skills are extremely important to succeeding in the contracting industry. Some are natural, and many can be learned. The ability to use and improve both natural and learned skills is an important factor in developing a successful business. Either way, it is important to develop your skills to the highest possible level.
Those of you who have a desire to enter the design field, such as architecture or landscape architecture, must have artistic and creative instincts. The ability to think abstractly and visualize outcomes is extremely important. Creative solutions to development challenges separate the outstanding firm from the average one. Most industry associations have annual awards competitions where companies or individuals have the opportunity to present their best projects, their best ideas, to their peers. The most creative of these projects stand out and set the standards of excellence for their respective industries.
However, natural skill and ability is not enough.
Consider professional athletes. From 1997 through 2008 Tiger Woods won 14 of the 48 major golf tournaments. But Tiger did not get to the top merely by using the talents he was born with. His father worked tirelessly with young Tiger to hone his skills; he perfected his swing and trained his mind to withstand the rigors of intense competition. Even after winning many major golf tournaments, Tiger kept working with his coaches to improve his swing so that he could continue to stay ahead of the competition. Other athletes like Michael Jordan would arrive an hour early before pre-game warm-ups to take shot after shot. This wasn’t during his early years learning the game but during his amazing NBA career. The best of the best don’t stop once they’ve made it to the top; they continue working hard to stay there, always pushing themselves. At any level, you can always work on enhancing your current skills while learning new ones.
Architects, landscape architects, engineers, and others in the professional field typically earn undergraduate or graduate degrees in their field. Four years of college are required for an undergraduate degree and an additional two years for a master’s degree. Many colleges will allow students to earn a master’s degree even if their undergraduate degree is in a field unrelated to architecture, landscape architecture, or engineering.
tip
The website www.collegeboard.org has an extensive search engine for finding colleges of all types throughout the United States.
There are excellent opportunities for those who do not wish, or are unable, to attend a full four-year college program. Technical schools, usually offering two-year degree programs, are a great place to learn a new trade or to improve a skill you presently have. These programs do not require the rigorous high school curriculum and pre-admission testing needed to be accepted at four-year colleges. Technical schools offer degrees in the construction trades such as plumbing, carpentry, and landscaping. They also offer programs in business management, marketing, and real estate for those who intend on someday starting their own business in the property development industry. Currently nearly 2,000 technical schools in the United States offer associate degree programs in the construction trades and/or horticulture/landscaping.
Those of you who have been in the military likely understand the term “OJT.” After surviving eight weeks of torturous basic training, you were given an MOS (military occupational specialty) and assigned to a post. If, for example, the Army decided that it needed a clerk-typist, you might be assigned to a company headquarters office to learn typing and filing. No experience needed; just show up for work, and your superior would show you what to do. Over the following weeks and months, you’d learn your job while doing it. Little, if any, formal education was provided. If you learned the job quickly, you’d be promoted from private to specialist, and hopefully to sergeant. Each promotion would bring more responsibility and higher wages.
In the construction business OJT is a common way for employees to learn the trade. New, inexperienced employees are assigned to a work crew led by an experienced foreman or crew leader. It’s the job of the foreman to complete each job or project according to the specifications established for the project and to finish it at or under budget. Her job is also to train new employees on how to do their particular tasks. As in the military, new employees are given simple tasks at first and then move on to more complex and skilled work as they master each task. Repetition and familiarity with the necessary tools will help facilitate OJT.
An important part of OJT is making mistakes! All employees (as well as bosses and business owners) will make mistakes at some time during their career, and new employees typically make more mistakes than more experienced ones. The key to mistakes is the ability to learn from them. As a boss or business owner, you should make it a point to encourage employees to understand what they did wrong and move forward. Those who do learn from mistakes and errors eventually become much better and more productive employees. And, most important for those who intend on starting their own contracting business, understanding and learning from your past mistakes will make you a better teacher of new employees; the result will be that your business is more productive, successful, and profitable.
Your first reaction is probably “Who?” Well, back in the early days of rock ‘n’ roll music, before the Beatles became famous, an up-and-coming singer from New Orleans named Lloyd Price released a hit record called “(You’ve Got) Personality.”
Now don’t get us wrong, were not saying that business owners who have a strong personality will instantly become successful. However, personality is part of what can set you apart from your competition. People do business with other people, especially those with whom they like spending time. Why do people pay more at specialty shops when most items can be found for less money in big-box stores or on the internet? They have developed a rapport with the store owner, manager, or even someone working in sales. Consider the spokesmen and women for businesses; they speak on behalf of the company because they have personalities to which others gravitate. This doesn’t mean you have to be boisterous or even outgoing. All it means is that you need to be personable, polite, attentive, respectful, and communicate well with others, which also means being a very good listener. Being personable is just one of several character traits that will help you as a business owner; here are a few others.
Think about great professional golfers in both the PGA and LPGA. They all combine their natural athletic ability with discipline and determination. They are disciplined in the way they practice and in the way they approach each shot. Week in and week out, they practice and set up each shot in precisely the same way. They are also determined enough to keep their minds on the game and their goal (of winning) always in sight. They have incredible ability to focus on the task at hand; the last shot they made, good or bad, is a distant memory and has absolutely no effect on their next shot. They also persevere through good times and bad. Consider golfer Phil Mickelson, who won the Masters Tournament in 2004 after laboring on the PGA tour for 12 years. Likewise, you need to have the determination to make a project fit the needs of the client(s) and the discipline to stay on task no matter what goes wrong along the way (and something always goes wrong). Very few projects go smoothly form start to finish, so you must stay the course and be determined that it WILL work out well in the end.
Self-confidence is critical. Business ownership is often a lonely life. President Harry Truman had a sign on his desk that read, “The Buck Stops Here,” indicating that he was responsible for decision making. He could not pass crucial decisions on to someone else. Similarly, in order to start and run a successful contracting business, the owner must be willing to make key decisions, often alone. However, one of the biggest decisions that most business owners make is deciding when they need to call in someone else. Self-confidence should not be confused with stubbornness. We all have our knowledge and skill sets, but we also have to know what we don’t know and reach out for help when necessary. Heads of Fortune 500 companies and leaders of industries do not get to those positions by trying to do it all alone; they reach out to experts in all kinds of fields for help. That’s real self-confidence.
Operating a contracting business is both physically and mentally stressful. Early mornings, followed by long days, and six-day weeks are very common throughout the contracting industry. Contractors must be in excellent health, both physically and mentally, in order to achieve success. Exercise and a good, healthy diet is advised.
Excellent Time Management Skills
A well-organized manager earns the respect not only of fellow employees but also of clients. Every day an owner is bombarded with requests, and often these are really demands on his or her time. Foremen ask for direction about a current project; an assistant requests clarification of information needed to complete a job estimate; a client calls asking why some service was not done properly; a supplier calls to reschedule a delivery; and a magazine salesperson calls needing information for the current advertisement, which has a deadline of today. All this, and the owner has an important meeting with a prospective client in one hour. Oh yes, and don’t forget to sign today’s payroll checks. Most contracting businesses are like a busy beehive, especially in the morning. An owner must be able to prioritize his tasks, adjust the daily schedule to solve true emergencies, and keep the operation moving forward as smoothly as possible. Of particular importance in time management is organizing the work crews on a daily basis so that time is not wasted and clients are not kept waiting. Efficient foremen know exactly where they are going, what type of work they will do, and what tools they need to complete the job. If an owner is too busy with other tasks, money is lost while employees are getting paid to sit and wait for instructions.
Time management is important not only on a daily basis but also on a long-term basis. As the backlog of work increases, owners must be able to accurately project how long each project will take so that they can accurately schedule future projects. One of the worst things a contracting company can do is promise a client “we’ll be there next week” and then, for no reason apparent to the client, show up in three weeks. A company may use a chart like the one in the sample work schedule (Figure 2–1) or any of numerous time management programs, many of which are mobile, such as the mJobTime Mobility Suite (at www.mjobtime.com), which helps you track projects and keep everyone updated with modules for the labor manager, GPS manager, equipment manager, daily field manager, budgets manager and documents manager. Procore Management Software (at www.procore.com) also has several products designed for general contractors, engineering firms, and construction management firms to handle time management and project coordination. ExakTime (at www.exaktime.com) is another of several companies with software, and mobile apps, to help you with time tracking. Look for time management tools online. Ironically, they can save you time and help you communicate what needs to be addressed sooner than later to your subcontractors and/or employees.
In the “Sample Work Schedule” shown in Figure 2–1, page 15, if another client, Mr. Allen, prefers to work with Charlie, the owner knows that he cannot promise to start the Allen project until early June. Similarly, if Jane is extremely talented in a particular task, the owner knows he cannot send her out to complete this type of work until late May.
Time management encompasses much more then merely organizing a daily calendar. It is crucial to the success of a contracting business.
Do You Have What It Takes?—Part II
Beyond character traits are a host of abilities that contractors must have in order to succeed. The best and most successful contractors have a good balance of technical skills and business management expertise. As you learned earlier, many contractors are blessed with the natural skills to do their jobs. Most are craftsmen and women who pay careful attention to detail, avoid sloppy work, and finish their work with confidence and pride. They are able to step back from a completed project and say to themselves and their co-workers, “Job well done!” They are confident that their clients will say the same thing.
FIGURE 2–1: Sample Work Schedule
A tracking chart like this will help you manage employees, available subcontractors, and jobs.
As skilled as they may be, many contractors like to keep up to date with the latest advances in their field by taking advantage of opportunities for continuing education. Along with returning to school for a degree as mentioned earlier, there are many avenues available for learning about new products and techniques.
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Use the internet and do a Google search for “contractor magazines,” and find opportunities to receive free magazine subscriptions that focus on your specialty.
Seminars presented by suppliers of the materials a contractor purchases.
How-to seminars given by home improvement stores like Home Depot and Lowe’s.
Conferences and classes offered or sponsored by industry associations.
College courses (not as part of a degree program) on campus and/or online are available on anything from general contracting to general construction management to pipefitting and sprinkler fitting. Such courses can be found at http://Learn.org or http://Study.com, which provides a similar listing of courses. You can also check local college course listings in your area.
Industry-specific magazines, newspapers, blogs, or websites.
The government-sponsored Small Business Administration (www.sba.gov) also offers education and help to all small businesses.
Contractors don’t like to admit it, but many lay people, including their clients, are able to do similar work. Perhaps not quite as well and certainly not as fast, but they can do many tasks that contractors are experts at. The DIY (do-it-yourself) retail market is huge; the combined revenues of Home Depot and Lowe’s are over $120 billion, representing over 70 percent of the industry; several cable television stations, such as HGTV, also specialize in home improvement and remodeling. And if you do a Google search on how to do a certain type of project, chances are you’ll find it.
However, beyond their natural skills and personalities, contractors possess two things that most of the public does not have. First, they have the time to do the work. Most homeowners and amateurs can only work nights and weekends; their regular jobs prevent them from working full time on their projects. Most homeowners do not want to live in their homes for extended periods without running water or with a hole in the roof, or go through the entire winter without a driveway. Contractors have the ability to complete a project quickly and with minimal disruption to their client’s household.
Second, contractors have the right tools to do the job. While the equipment rental business is fairly large, many homeowners are uncomfortable using expensive tools. Some tools and equipment are not available for rent due to liability issues; other equipment, such as a dump truck, usually is not available on a short-term basis. Often, when a homeowner rents a particular tool, he botches the job because he does not have enough experience to use it properly.
Having the right tools is one of the keys to success in the contracting industry. A landscape contractor reported to us that when he first started he used a handheld sod remover when preparing plant beds; on one of his first jobs, he and a worker spent the better part of two days removing sod by hand. The result was not only sore arms and tendonitis in his wrists but a lower profit due to the time it took to do the task. The next week he purchased a gas-powered sod cutter for several thousand dollars, a very large expense for the young company. But the time savings he achieved by using newer and better technology allowed him to pay for the sod cutter in a single season. Instead of spending two days removing sod, he was able to complete the same work in a few hours, with less manpower as well. In fact, his sales and profits actually increased because he was able to move on to the next job much more quickly.
Contactors often work together to finish projects. Their working relationship may not be formal as they might merely be working on a project at the same time. However, many contractor jobs overlap. Contractors have to understand what the others are doing so that they do not “step on each other’s toes.” All of them should be able to read and understand blueprints of the building and the landscaping so that the materials they are installing do not interfere or conflict with what the other contractor is doing. For example, the irrigation contractor must be able to read the landscape plan and the grading plan in order to efficiently design the sprinkler system; the low-voltage outdoor lighting specialist must understand the electrical plans in order to design a lighting plan that reduces voltage drop and does not conflict with the full-voltage lights specified for the home.
A development project comes together more successfully when all the participants understand each other’s responsibilities and what the scope of their work includes. While they do not necessarily need to know how to do the work of the other contractors, they must understand the concepts and terminology used by them.
President Thomas Jefferson once wrote, “Never spend your money before you have it.” This little truism has wide implications for the contracting industry because of the seasonal and cyclical nature of the business. In Chapter 6 we discuss how to establish a budget and the importance of cash flow. But first there are two important issues relating to money that everyone contemplating starting up his or her own business should understand.
A Nest Egg
Conventional wisdom states that a new business owner should have savings in the bank to cover at least six months of personal expenses. Every potential business owner must take the time to learn how much money he or she has spent over the past 12 months and estimate total expenses for the next six months. The attitude should be “since I will be working without a guaranteed income stream, how will I survive for at least the next six months?” Use your checkbook, bank statement, or credit/debit card statements to compile a list of all your projected expenses—mortgage, taxes, utilities, insurance, food, and recreation. If your spouse has a secure job, his or her take-home pay can be used to reduce the amount of savings you need. If you do not have the ready cash to survive at least six months, you would be wise to postpone starting your business until you have the necessary funds.
These savings should be kept separately from your stock and bonds portfolio and invested in a conservative, high-yield money market account that offers free checking and has few, if any, fees. A couple of sources for information are www.bankrate.com and the online Money magazine at http://time.com/money. Many other financial magazines also include up-to-date interest rate information on a weekly basis. The goal, however, is safety and low-risk security for yourself and your family.
Startup Funds
Beyond providing a nest egg for personal living, any new business also needs enough capital to survive six months to one year of business. Because it usually takes some time for a new enterprise to attract enough business to ensure a secure cash flow, having enough ready cash is critical. Operating expenses include salaries, wages, rent, utilities, supplies, advertising, and perhaps bank and interest payments. Sources of these funds are usually loans from banks or individuals and accumulated personal savings or loans against your life insurance policy if you have one. You do not want to put your home at risk with a home equity loan nor do you want to run up high-interest credit card debt or dip into money in your retirement portfolio, which you’ll need for your future.
A Good Credit Rating
The financial demands on a new contracting company can be enormous. Not only do employees expect to receive their wages every week or two, suppliers expect to be paid every month, possibly even within ten days. Clients, on the other hand, often do not see an urgency to pay immediately upon completion of the work. Some clients seem to think that contractors are banks and that they can pay off their invoice over several months. This situation should be avoided by requesting a down payment from a client before the work begins. However, a key ingredient to success is earning a good credit rating so that your suppliers will send you a bill once a month for the items you purchased. A good credit rating will also allow you to purchase vehicles and equipment and borrow the funds from your bank.
The problem with buying materials on credit is the ability to pay in a timely manner without incurring late and/or finance charges. While credit is a good way to maintain current cash flow, it is not a substitute for having available funding. A rule of thumb is to use debt by intention and not by default. In other words, have the money available and do not buy on credit (or hire people on credit) with hopes that the money will show up. Chapter 6 delves into the subject of managing your cash flow in much more detail. Remember, a good credit rating will allow you to establish charge accounts at your suppliers, but only by paying the suppliers according to their requirements will you maintain your good credit rating.
tip
Get to know your banker! It is not enough just to swing by the bank and make deposits; you should get to know a personal banker at the branch where you do your banking. Over time, she will understand your business and your financial needs. She’ll be in a good position to advise you about interest rates, borrowing, and how to best manage your cash.
There are three companies in the United States that maintain credit information on individuals: Equifax, Experian, and TransUnion LLC. Contact information on these companies may be found in the Appendix. It is a good idea to check your credit rating from time to time to ensure that there are no errors in the report.
An important piece of the puzzle needed to answer the question “Do you have what it takes?” is the ability to manage the enterprise. You have seen that contractors must be able to manage their own time, be disciplined, and be self-reliant. However, they must also be able to manage the activities and turmoil that usually surround them on a daily basis. A workplace is a dynamic community of people with varying backgrounds. While it is true that a company is much like a family, it is also an individual business. Often business decisions conflict with personal feelings; good managers must be able to separate emotion from hard reality.
Managing People
Managing people is a true art. People have their own personalities that are sometimes in conflict with one another. However, because they work for the same organization, they must be able to work together for a common goal. As a contractor-owner it is up to you to promote a work environment in which people focus at the task at hand and keep their personal opinions on outside matters, especially politics and religion, to themselves.
You have heard about the sports team whose talent is not highly regarded; however, its coach has the ability to push each player and enable them to perform at a level above their natural talents. He’s able to generate positive chemistry on the team, with the result that the individual team members play their best and the team wins the championship.
For a more specific example, let’s assume that Joe is a long-term employee who has much in common with the boss: Both attended college in the same city, love to play golf, and have sons enrolled in the same school; they often see each other at functions unrelated to their jobs. However, for personal family reasons, Joe’s production, attitude, and attendance have become a problem. The boss has several discussions with Joe who becomes more defensive and angry with each meeting. Joe’s behavior finally begins to negatively affect several of the office staff. The result is that company sales decline, the atmosphere in the office is dark and dismal, productivity suffers, and clients become upset with their service. Ultimately the boss will have to make the difficult decision as to whether or not to fire Joe. He will have to put personal feelings aside, take a look at the big picture, and make the ultimate decision about Joe’s fate.
aha!
For some training on leadership and how to hone such skills there are many great books to read and even courses to take, such as those offered online by Dale Carnegie Training at www.dalecarnegie.com/online-training. You might also read his classic book, How to Win Friends and Influence People.
Communication Management
Successful business owners must have excellent communication skills. Time, money, and reputation can be lost by owners who do not communicate clearly with both employees and clients. Many clients have preconceived ideas about what a contractor should do; oftentimes they do not read contracts and proposals carefully enough to really understand what they are getting. Usually, they do not understand blueprints; sometimes, they have a vision from a photograph in a home improvement magazine. It’s critical that a contractor-owner have the ability to clearly explain the services he offers and exactly what he proposes to do for the client. In the case of landscaping, it’s important that the client understand that it takes time for a landscape to mature; unlike a new kitchen or bathroom, the final product is not realized immediately upon completion of the work.
Owners must also be able to accurately communicate with employees. Because projects are often changed and adjusted midstream, good communication between the owner and the foreman is needed for the project to proceed accurately and on time. In addition, two-dimensional drawings are sometimes difficult to translate into the three-dimensional world. The contractor must not only communicate what must be done with accurate and legible drawings but also be able to explain verbally what the drawings mean.
Modern communication is most often conducted through cell phones (primarily iPhones or Android smartphones) and emails as well as texts. While this is fine for setting up meetings and having initial conversations, it does not replace in-person, on-site communications, which are imperative to real-world projects. In-person and on-site meetings are essential throughout the process, especially in the early stages or when changes need to be discussed and made.
The most important communication between clients and contractors are the specifics of each project, and they must be confirmed, reconfirmed, and signed off on. Communication must therefore be very clear with each and everyone working on the project. Emails and texts must be simple and to the point, and there needs to be a response confirming that such an email or text was received and acknowledged. You also want a paper trail, and/or electronic trail, on all important communications, especially when changes are requested and agreed upon.
Fortunately, smartphones allow for communication from anyplace and the ability to look at specs and other data at both ends of the conversation, as well as photos and diagrams. Make sure that all key personnel have the latest in mobile tools to make communication that much easier.
Organization Management
How many times have you heard someone say, “The left hand doesn’t know what the right hand is doing.” As business owners, you would much rather hear, “It went off like clockwork.” Contractors are often away from the office much of the day, and unless they have a very small family business, they do not really know what happens at the office. Employees are very aware of a disorganized boss who is out-of-touch with the day-to-day operations of the office and runs from one task to another in a seemingly haphazard way. Most owners are not aware of the office gossip and whispers that make the rounds; they probably would be appalled at what they would hear. Unfortunately, an owner’s own chaotic style often filters down to the office staff. However, if an owner implements a good organizational chart, with the assistance of employees who perform the work, each employee will know his own responsibilities and, as important, the responsibilities of every other employee. In this way the company will operate more efficiently, profitably, and mistake-free. Chapter 9 goes into more detail about organizational charts.
Send in the Delegation
A key to organizational success is the ability of an entrepreneur to delegate responsibilities to other employees. Very few business owners have the ability to perform all the tasks required to operate their business. They are likely to be experts at some things, very good at others, and nearly hopeless at others. Because most entrepreneurs have loads of confidence in their abilities, it is hard for many to admit to themselves, “I’m not very good in this area, I need help, and this is how I intend to achieve it.”
Delegating authority to others can be a difficult task not only because it may be hard to find the right person to handle the tasks but also because it is hard for an entrepreneur to give up some of the control of his business. The process of delegating involves four steps:
1. Finding good people who are trustworthy and have the expertise to be successful in the area concerned.
2. Hiring the person and incorporating him into your company.
3. Clearly communicating what is expected of them and how to find answers, or know who to contact, if there is a problem.
4. Giving someone else the ball, and allowing that person to run with it.
stat fact
According to National Association of Home Builders, homeowners spent about $150 billion on home improvements and repairs in 2013. That was 16 percent less than in 2011 ($178 billion).
The best entrepreneurs routinely monitor the activities of these employees but do not constantly look over their shoulders, micromanage their activities, or reverse their decisions without very good cause.
While the ability to delegate is important, over-delegating can become a problem. The owner may become too far removed from the daily activities of the business. The art of delegating is also the art of team building; owners must understand how all the pieces of the business fit together to form the whole. The risk in over-delegating is that decision making becomes too decentralized, communication breaks down, and the business becomes inefficient.
Contractors enhance the safety of individuals as well as the community at large.
Contractor-owners have the burning desire to operate their own business and have the knowledge and experience, either through formal education or on-the-job training, to be successful.
As business owners, contractors must be disciplined and determined, self-reliant, in good health, and practice excellent time management.
Contractors have the advantage over the general public because they keep up with the latest advances in their particular field, have the best tools to do the job, and understand the common terminology used in the various disciplines of the property development industry.
Contractors can be successful if their finances are in good order, they have the ability to manage people, can communicate effectively with employees and clients, and they know how to organize their employees and/or subcontractors for maximum efficiency.
The ability to delegate responsibilities is critical to success.
