How To Become A Successful Builder #7 – Work the Business Cycle
how to be a good builder
“No one taught me how to run the business!"
True.
When you started your building business you’d not learned how to run the business of building. However, because you’re great at renovating and construction, your business grew and now you've got this team. Nice. But none of them know how to run a business either! It’s a headache! You’re a technician. Not a business guru!
“Yet it can’t be rocket science. Guys I grew up with have it mastered."
In this article I outline one of the foundational principles I’ve taught for years. Master it and you’re on the road to becoming a successful builder.
Effectively a building or renovation business is a made up of just four parts:
you – the owner;
your team;
your customers;
your business.
I often sketch it this way...
the-successful-builder-Master the Seven Habits of Highly Successful Builders #6 – Work the Business Cycle
1 The Successful Builder Resources the Team
If you can understand that one of your prime roles as owner is to provide the resources the team needs in order to function effectively (e.g. tools and materials, direction and supervision, and clear goals and accountability) then you are well on the way to becoming a successful building business owner. An important part of this role is to select, train and gain performance from your team. In this way you are actually serving your team by providing them with everything they need to do a great job.
the-successful-builder-Master the Seven Habits of Highly Successful Builders #6 – Work the Business Cycle
In return…
2 The Successful Builder Makes Sure The Team Serves the Customer
Many carpenters on a construction job think they work for the boss. And that s/he pays them. Any of these on your team? The truth is that you don’t pay them. The customer does for a job well done. If you can teach your team to understand this, then they might just (?) learn the importance of making sure that the service your company delivers is consistent and to the required standard so that the customer will not only be satisfied but so happy s/he will become a Raving Fan and recommend you to all their friends and relatives. This is great for business!
the-successful-builder-Master the Seven Habits of Highly Successful Builders #6 – Work the Business Cycle
3 The Successful Builder Knows That The Customer Pays the Business
Money comes into the business from satisfied customers. If the team has worked to time and budget then the company makes a decent profit. There’s no other source of income; apart from any capital the owner may invest. But you can’t keep investing in a poorly performing building company for long. It’s the fastest way to the bottom!
the-successful-builder-Master the Seven Habits of Highly Successful Builders #6 – Work the Business Cycle
4 The Successful Builder Makes Sure The Business Returns to the Owner
It’s from this profit that the owner is paid a return on their investment of time, capital and risk. Also, it’s from this profit that the company reinvests for future growth and development. By so doing the company builds on its reputation, by being able to take on more and more jobs.
the-successfuul-builder-Master the Seven Habits of Highly Successful Builders #6 – Work the Business Cycle
And so the cycle goes round and round. Great business owners who improve the performance of each part of the cycle, build great businesses. Those who don’t understand are destined to spend their time frustrated in crisis management in each of the parts.
Question
How is it going for you in your construction business?
Are you working as the owner, or are you still stuck being one of the team?
Are the profits enough to give you a great return and enable you to expand the business?
I’d love to hear your stories.Why not post your stories/comments below
View more in the “How To Become A Successful Builder” Series:
Graeme
P.S. Whenever you’re ready….here are 4 ways I can help you grow your building business:
1. Grab a copy of my free book
It’s a road map of a successful 15 minute sales call that’s guaranteed to increase your conversion rate. Get The Book
2. Join Trade Mates and connect with builders who are scaling too.
It's our new Facebook community where smart builders learn to get more income, time and freedom. View our free business resources for builders. Ask questions of like minded business owners and business coaches. Give your knowledge and expertise to help others. - https://www.facebook.com/groups/TradeMates/
3. Join My New Group
I’m starting a new group called “OnRamp” to kick start sales and marketing in your business. If this sounds like you, message me with the words, “OnRamp”, and I’ll get you all the information.
4. Join Loft Members
If you’d like help to get off the tools, make more money and get your life back...just message me at graeme@thesuccessfulbuilder.com and put “LOFT MEMBERS” in the subject...tell me a little about your business and I’ll get you all the details.