How to do better than just stay afloat in construction?

Doing better than just staying afloat in construction is not always easy. The building game is a tough gig.  You operate in what economists call, “a fluid market”, driven by demand and a bunch of other stuff like, “interest rates, rapid population growth, Donald Trump’s election, the price of rice in china………”  You name it.  It all seems to affect your business and how you make money.   But regardless of what the experts say you still have to find work, price it, win it, build it, defect it, finish it and get it handed over on time, to budget and quality. SIGH

And all before Christmas, because as we all know, the world stops turning after Christmas Day.  That’s why everyone wants everything done by them!!!!!

So how do you plug the holes in the SS Construct, stay afloat and better still, make ‘bloody good’ margin?   After all you got into business to make more money than you did on the tools.

The experts will tell you to,

  • do to the basics,
  • keep it simple,
  • stick to your knitting,
  • focus on what you do best,
  • know your market,
  • know your competitive advantage,
  • what gets done gets rewarded…..

Your head starts to swim – there is water ingress.   Done the lifejackets!  MAN THE LIFE BOATS!!!!!!

But wait.  The pumps have kicked in and the fog is beginning to lift.

Crisis averted – for the time being. However we all know that there will be more stormy weather in the future.

And as a good captain, you need to carry out repairs and make your ship better equipped to handle the next big blow.

But better still, you want to make her not just a watertight ship, you want to make her a Flagship.  One that braves the elements and beats them.  You want to make your dough, take a long cruise to Tahiti and know you have money coming in while your sailing the high seas.  So what do you do?

You focus on the ‘key areas of influence’ in your business because you need to allocate your most precious resource carefully – your time.

Key Areas of Influence in Construction

The most important for builders are,

1. Time Management

Time is your most critical asset.  As they say ‘ They’re not making any more of it’. Of course builders are stretched for time. Having more time boils down to two steps: Identifying the essential and eliminating the rest.

2. Cashflow

Healthy cash flow is a vital part of running a business. It is, literally, the make or break for many business owners who need to stay on top of their finances, especially cash flow, to ensure they can operate successfully.

3. Subcontractor relationships

Subcontractors are interwoven into the fabric of your business. In fact they make up the major part of your business.   Good ones can make the difference between being a ‘hero’ or a ‘zero.’

4. Marketing and getting the right clients

Competing on price alone is a race to the bottom where the winner actually loses.  A builder needs to position himself as the prize and sell to the client on a Cost of Inaction basis.   If you are relying only on word of mouth your letting a large part of the market slip by you.  This includes social media and digital media marketing.  According to LinkedIn data, social media marketing was the single highest in-demand skill in Australia in 2015, closely followed by digital media marketing.

5. Processes

From hiring, onboarding, HR, running finances, payroll, procurement including estimating, tendering, document management, design, project management, job costing, accounting and paying bills, and then actually getting the job built.  Builders are stretched across many business functions.

6. Regulations

QBCC, Workplace Health and Safety, Taxation, Superannuation, Workcover, compliance to Australian Standards and the Building Code in tendering, design, construction, compliance to DA, BA, airspace restrictions for cranes, and local council by-laws.

Nobody likes red tape. Least of all builders with limited time and multiple aspects of a business to take care of themselves.Deloitte published a report “Building the Lucky Country #4 – Unleashing productivity” outlining that rules, regulations and red tape costs Australians $249B a year in compliance and loss of productivity. That’s the equivalent of everyone working 8 weeks a year just to cover the cost of following the rules.

7. R & D

Given the range of tasks above, it’s no wonder that innovation – tomorrow’s problem – is often shifted to the backburner.  But staying informed about new products and processes can be your unique selling point.

Unreliable Subcontractors – is this your biggest headache?

6 out of 10 Queensland builders surveyed listed “Unreliable Subcontractors” as their biggest headache.

Are you one of those builders?  If so does this sound familiar?

You get a great project to do. Celebrations!!!! But for some reason your subbies become unreliable.   What happens next?  Your project falls behind, you miss your handover deadline and the quality sucks.  The client is very unhappy and complains daily about the state of the site, the electrician, the plumber, and how uncooperative and incompetent your staff are. Your head hurts!!!

Well imagine how it would feel when your subbies turn out to be amazing and perform well.  You would have a feeling of pride and satisfaction – possibly relief – when your job is handed over on time and to quality.

Your clients would be grateful and would sing your praises from the highest rooftops.  You would get all you are owed and have no variations that the client doesn’t want to pay for. Your faith in human nature is possibly even restored – not all subbies are hard-to-get-along with a…….holes.  Nirvana in this life!!!!

Huzzah!!!!!

Cold Comfort

If it’s some solace, YOU ARE NOT ALONE!!! (as the stats show). I hear the nightmare stories from all different sized builders regularly. Their lists of problems are not just limited to slack subbies.  Others that get a show are,

  • unrealistic client expectations
  • slow payers
  • militant unions
  • spurious Workcover claims
  • accounts on stop
  • incompetent staff
  • rising costs in wages, concrete, traffic control
  • placement agencies getting rich off the back of high staff turnover,

And that’s just the start!!

However I decided to tackle the main problem first and apply my own knowledge and experience,  to put together a guide that I hope will help builders get the better result – Reliable Subbies.

It’s called,’ 5 Ways to Get Better Subcontractors‘.  I really do hope you get something out of it.

Just click the link below to download your copy.

https://etender.lpages.co/better-subbies

BTW (interesting fact) – Did you know that the average time an employee stays with a builder is just over 15 Months 

Incredible isn’t it?  An issue for another day!!!

 

 

Do you know where money is made in construction?

excluding the office punter’s club, the coke machine on site, or “incentives” from the ‘well-meaning’

This is not a trick question and for some it may just sound a bit naive.   However, believe it or not, some construction companies lose site of this.  They get caught up in support services like HR, IT and finance, which are extremely important activities, but only in so far as they support the primary activity of the building company. To erect a structure, on time and to quality, that someone will pay for. That someone being the owner/developer, supported in most cases by his/her funder. The funder generally engages the services of a QS to put a figure on the progress of the build based on the percentage of works complete.  So this is where the builder makes the money.

On the Jobsite

It is the builder’s job to make sure program is met and quality maintained so he gets paid on schedule.  Then he can pay what he owes.  Sounds pretty basic but somewhere along the line some builders lose site of these priorities or just don’t have the resources to make sure they happen.

So what are the critical components for a successful build and who provides the resources?

A lot has been written about this but I believe it can be condensed down to the following:-

The right

  • site manager,
  • documents,
  • subcontractors,
  • supplies,
  • and the last 3 delivered at the right time.

This is not necessarily a definitive list by any means.  Some would argue that QA and Safety be identified on their own. However it is my experience that when you have the right site manager quality and safety follow, like a truck and dog.  A good site manager drives site safety for his workers and quality for his client.  His site is his responsibility and he knows it.   He is a strong leader with a firm hand whose mission it is to keep everyone’s “eye on the prize”. The project delivered on time, to quality, with margin in tact and everyone delivered safely home at the end of each day.

Obviously it is the builder who is responsible for finding the right site manager.

So where does etender come into the picture?

Right from the get go – from estimate through to the end of construction.  By helping you find the right subcontractors and suppliers who will perform on site and providing you with an easy to use system.

A straight-forward collaboration area means office and site people have direct access to the latest documents as they become available from the consultants. System generated automatic addendums and a site app ensures subcontractors are up to date, in and out of their offices.   Everyone on the build is on the same page with a “we’ve got your back” mentality and isn’t that what you want?  To make money and have a happy workplace.

That’s how etender’s document control and tender management system fits into your equation.  It saves you time and money and helps create a project with less angst. It is not rocket science. It’s about doing the right things, in the right way, to make sure the Jobsite has what it needs, when it needs it,  in order to meet program and make margin.

You can take our short quiz and see if you have what it takes to make margin on your projects now.

https://survey.zohopublic.com/zs/cMB05V

(copy and paste into your browser).

www.etender.net.au

 

40 Hour work week? I remember my first part time job.

I recall a few years ago I was working 55 hour weeks. We all were and had been doing so for a few years. My project manager used to get in at 5 in the morning and leave late in the afternoon. I got in a bit later at 6.30 and left at 5 or 6, as did most of our team. One day I bailed him up in the lunch room and said,  “things have to change. I want to go back to working a 40 hour working week. We have to learn to work smarter not harder.” – or some similar platitude.

He stopped, looked directly at me with his head tilted to the side, you know, the way a dog does when it’s a bit confused, and said, “You CANNOT go back to working part time hours“. I’m pretty certain he issued a few expletives as well. We both laughed, a lot …..but he was serious.

People are not the problem……

Long hours, in pressure situations characterizes the construction industry. Both builders and their workers complain about the long hours they work. They are flat out, their staff are flat out. There are deadlines to meet and cost implications to face if targets aren’t met. However, its this human cost that doesn’t seem to be taken into consideration. With profit margins less than 5% (at best) the money just isn’t available to spend time quantifying this area. The sad fact is that people are the collateral damage.

The price of an inefficient system is one of the greatest hidden costs for any firm. Managers must also stop blaming staff alone for productivity issues. Highly customized, patched-up system are also responsible for much lost time.

To improve efficiency and claw back lost margin the builder must look beyond his staff for answers. If the labour component of the process is being used to full capacity, it’s time to look at his/her systems and procedures.

The good news is help is out there for companies that are interested in looking and we don’t all charge an arm and a leg for our services. etender is an example of such a company. We are not just in the business of streamlining processes and system implementation. We are in the business of giving people back their time.

Worlds tallest timber building coming to Brisbane

WHEN built, 5 King Street, in the RNA Showgrounds redevelopment precinct, will be the tallest engineered timber building in Australia and one of the greenest. The engineered timber has a lower carbon footprint than traditional building materials, and is sourced from certified sustainably managed forests. It enables precise offsite prefabrication and safer onsite construction.

At a height of 52 m1, or 10 levels, it will be the tallest building of its kind in Australia and the largest of its type, by gross floor area, in the world. It has been designed by architect Bates Smart and is expected to be completed by the end of next year.

Bates Smart director Philip Vivian, said timber buildings were the next generation of workplace design, aimed at enhancing wellbeing.

“The timber construction recalls the vernacular ‘Queenslanders’, as well as ­relating to the historic RNA pavilions, to create a site-specific and innovative tall building that connects with nature,” he said.

The building is also on target to receive the highest possible green rating and top energy rating through the use of new, sustainable cross-laminated and glue-laminated timber as well as energy-efficient LED lighting, occupancy ­sensors, optimized air conditioning and rooftop rainwater harvesting.


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Built by builders for builders

etender.net.au was built for builders by builders.  It is a unique document and tender management system that was designed and developed by experienced project managers working in the industry.  These people knew what issues a builder faced every day and decided to offer a way of dealing with unwanted variations and inaccurate information.

Using etender is like having another person around but at a fraction of the cost of employing someone.  Human error is also eliminated from the equation.

  • Reduce the headaches and the costs and look more professional.
  • Get the backing of an efficient streamlined system and friendly helpful staff.

email support@etender.net.au and one of our dedicated helpful people will call you and discuss your needs.

Spotlight on what matters – The Great Barrier Reef

etender supports the Fight for the Reef campaign.

The future of the reef hangs in the balance.  As Australians we are its custodians.  If we sit on our hands and wait for someone else to do something it may be lost for ever.

You can show your support by going to

https://www.facebook.com/FightForTheReef/timeline  or http://fightforthereef.org.au/write-greg-hunt/

Stand up for something wonderful that has no voice and DO IT NOW!

Calculating working days

Looking for a quick way to calculate the working days for a contract.  Have found this great site you can customize for Australia.

http://australia.workingdays.org/

What to do when unions want access on job sites

From 1 July 2009, most Australian workplaces are governed by a new system created by the Fair Work Act 2009.

Right of entry refers to the part of Commonwealth workplace laws which regulate the rights of organisation officials (such as a trade union) to enter work premises including construction sites. 

There are strict rules that must be complied with before a union official or other government officials eg Fair Work Inspectors, can enter a workplace.

They can’t just walz in under the guise of Work Place Health & Safety issues and start throwing their weight around.

To read your rights – go to – http://www.fairwork.gov.au/About-us/policies-and-guides/Fact-sheets/rights-and-obligations/right-of-entry

Proposed Amendments to the Building and Construction Industry Payments Act Qld

As a result of stakeholder consultation carried out by Mr Andrew Wallace, a barrister with extensive industry experience, amendments have been recommended for the BCIPA of Queensland.  There are 3 key areas of reform most notably

  • Appointment of  adjudicators  and the adjudication process
  • Timeframes for claimants and respondents
  • Provision of additional information – adjudication response can now include all relevant reasons for withholding payment.

These reforms have been approved by cabinet and will debated in Parliament mid-year with the changes likely to com into effect 1 September, 2014

http://www.bcipa.qld.gov.au/SiteCollectionDocuments/Fact%20Sheets/BCIPA%20Fact%20Sheet%20-%20Amendments.pdf

Project Collaboration now even easier on etender – D & C the easy way!

etender has introduced a new feature enabling consultants, clients and builders to collaborate on a project with one central repository for project documents.   Project team members can upload and download documents keeping immediately up to date with all project document changes.

“Old hat” I hear you say!!  NO!

Not only can participants upload and download documents easily they can see their ‘up/down’ history.

The project coordinator can also keep his finger on the project’s progress via etender’s tracking facility.

All this at a fraction of the price of other systems with similar features.

Find out more by contacting support@etender.net.au for more information.