Construction Biz Wiz

In a tight economy, it can be a reflex to stop spending altogether. If a purchase is not easily recognized as something that would immediately impact operations, it can be dismissed as an unnecessary expense. But doing so, you could mistakenly overlook some valuable investments that would be smart business decisions for your construction company.

Jayme Dill Broudy recently authored an article on this topic for Construction Business Owner magazine. It provides some helpful information about important questions to consider and advises: “A good thing about tight economies is that they force us to dig deep into the business, understand where the money’s going and start actively managing the finances. But smart money management does not mean just locking up the checkbook. It means making every dollar provide maximum return to your business.”

Read the full article in Construction Business Owner’s September 2010 issue – found at the magazine’s web site, here.

What investments has your business made in the past year? Have you seen return on that investment? Was it a good decision for you?

A task force of AGC members recently updated the AGC Guide to Construction Financing-Second Edition (PDF, guide is free to download). This 26-page publication clearly explains the construction financing process and points out some of the opportunities and pitfalls for the contractor. It is intended to serve as a reference to get contractors thinking about the risks associated with project financing.

Check out page 5 … do you have a moral story of your own? What lessons learned would you advise other contractors to consider?  And see pages 12-13 … do you have additional best practices to share?

As contractors work to ride out the downturn in the construction market, many are looking for ways to hold onto their small profits and in some cases hold onto their businesses. Many are using the tried and true methods such as downsizing staff, cutting overhead costs, lowering margins on estimates to name a few.

However, those who remember the downturns of the past are turning to other strategies. With stiff competition in the bid marketplace, they ask themselves how to increase their work log without chasing bid work. The other question is “if no one is building new, don’t they have to maintain old?” The obvious answer is service. Fix old buildings by providing service. Replace the electrical work in the existing buildings. Update electrical, mechanical, and other systems in existing buildings. It makes sense that handling the demand of this type of work is the perfect choice and is an investment that will continue to be a smart strategy even as the bid marketplace returns. And we know the bid marketplace always does return. After all, it always has.

To learn more about this idea, check out this article from Electrical Contractor magazine: http://www.ecmag.com/index.cfm?fa=article&articleID=11257.

The article highlights a new book by Frederic B. Sargent, “Reinvent Your Electrical Contracting Business with Sustainable Service.” The crux of the book’s message is that “if a contractor can transform the service part of his business into a self-sustaining entity — whether it is a division or even a completely independent subsidiary — it can transform the nature of the entire business into a reliable source of steady income.”

It goes on to further explain sustainable service and its value to a contractor and gives examples of how this type of service works in theory and more importantly ways to implement sustainable service in the real world. This example is specific to electric work, but the concept can be applied in different ways across the industry.

Have you had success establishing or enhancing the service part of your business? Do agree the with thoughts presented in the article and/or the book mentioned? Please add your comments to this post.

Welcome to the new Maxwell Systems blog:
Construction Biz Wiz – wisdom and resources for construction business professionals.

In brief, the Maxwell Systems blog is designed to be a convenient go-to resource that you’ll use to access news from across the industry, thoughts on business management, advancements in construction technology, and much more. Be sure to bookmark our blog link: http://blog.maxwellsystems.com.

Now, let’s cover some anticipated questions …

Who should follow this blog?
Well, we are hosting this blog as another way to help us communicate and collaborate with contractors on the issue of Running a Better Construction Business. We hope this site becomes a one-stop resource for the information most valuable to professionals in the construction industry, including construction business owners, presidents, managers, accounting staff, project managers, estimators, IT managers, and anyone with insights to share with construction professionals or helping them operate more productively and profitably.

You are the industry leaders taking the time and spending the energy to find answers to tough questions, looking to the future, and uncovering ways to bolster growth and serve your customers. Let’s discuss the shared challenges facing the industry and give attention to topics affecting us all.

What will this blog offer?
Relevant industry news, perspectives on changes in the industry and marketplace, articles about how construction companies can improve profitability, methods to get a leg up on the competition, tips on how to prepare for pending changes (e.g., government regulations, operating systems, etc.), ways to maintain a successful team and company, and much more.

We’ve all seen how the economic obstacles the country has faced in recent years have demanded that many businesses, construction included, operate as lean and mean as possible, do more with less, and hold on tight to every opportunity. We want this blog to be your affordable (eh hem, free!) resource to share with your peers in the industry… discuss what tools and practices have helped your business… What lessons have you learned? What do you see coming down the pike that we should all be talking about?

How can you participate?
We invite you to check out, comment on, and follow this blog, http://blog.maxwellsystems.com/, as often as possible. In fact, the direction and content of our blog will evolve based on the participation of you … the professionals facing the day-to-day challenges and rewards of working in a construction business. The blog’s content will develop based on the feedback of followers. What do you want to read? What news, topics, and trends are important to you?

Please return often and don’t be shy! We want to hear from you – post comments, submit your ideas, share news you find useful. We want this blog to be a one-stop site for timely information most valuable to you.

If you happen to be wondering “What in the world is a blog?”
There are many definitions for the term ‘blog’ but, in short, this blog is a web site that we’ll maintain with content (original and curated) that we consider of value and interest to construction business professionals.

Thanks for joining us at Construction Biz Wiz. We hope you return often to find valuable posts you find worth reading. If you have any questions or concerns, please feel free to email us at social@maxwellsystems.com.

P.S. If you want to follow Maxwell Systems using other social media sites, please use the links at the bottom of this page to stay in touch via Facebook, YouTube, LinkedIn, Twitter, and our RSS Feed.