Category: sub-contractor

What the Hell is Going On?

I was at a seminar on Tuesday about Business Administration. At the seminar the speaker discussed how it is that employees that are unwilling to perform a job function will never do it well, or even do it at all. This, of course wreaks havoc in your company.

Why? Because now things that are believed to be getting done are not. Upsets occur between departments, employees and the client who was not serviced correctly, if at all.

The whole organization is thrown out of balance. Employees become uncertain of what is happening, who is not doing their job, “am I going to get blamed” and all manner of anxiety occurs.

What follows is that the one guy (or girl) who is not performing their duties as agreed to, now makes it the problem for the company itself and everyone working at it to solve. So, for some seemingly unlocatable cause, everyone becomes frantic and spends all their time talking about and trying to fix the problem and now does not do their own job duties as they should, or even are able to.

The government is great at this. One guy doesn’t do his job, something simple like deliver the paperwork for his department budget to get approval. The budget doesn’t get approved because he never delivered the paperwork but swears under oath that he did. Let’s not do some quick and easy detective work and call the guy out in the lie, let’s form a 20-member committee to find out why the budget didn’t get approved. A year, and ½ a million taxpayer’s dollars later, the committee determines the budget was never submitted. So now the committee starts to investigate the guy… and the insanity never ends.

In your company you have to be a very skilled observer and keep a good eye on the communication that occurs inside and outside the organization. What I mean by communication is the flow of ANYTHING that can be moved between two points. Be it a memo, email, text, letter, person or object between the company employees themselves AND your clients.

If these are not moving inside the company in a purposeful timely fashion which accomplishes an end goal, then your employees really aren’t working to keep the company going and growing. They just have a job they show up and get paid for, without being willing to perform their duties to enhance the company’s survival, ultimately bettering their life as well.

If there is no communication between your staff and clients or potential customers outside the company there will be no clients or potential customers, hence no income. It’s that simple.

OK, rest assured, I’ll bet most of your employees care what goes on, contribute greatly to keep the company going and growing and have pride in the people and companies they work with.

BUT, there will be those that are unwilling to do the duties assigned and muck up the whole works. As the leader of a section, department, division or the entire company it is up to you to locate such employees and take corrective actions BEFORE they throw your organization into a self-imploding chaos.

Until next time, flourish and prosper in your endeavors.

Know that I am here to assist you should you need it.


Is Your Problem Money?

If you think the soul reason for all your problems in your company are due to money, or lack thereof, you are simply not looking at the big picture.

There are several different areas of an organization (a company) that determine how much money it makes as well as a couple of areas that manage it. Earned income and the correct management of it will give you prosperity and wealth.

So, how do you go about getting clients? Do you wait for the phone to ring? Do you do advertising, promoting marketing or PR (public relations)? And yes, these are all different actions, not all the same thing, as most people believe. Which one of these does your company do? None? That in itself is the reason there is never enough money.

Does your company deliver the products and services you offer exactly and timely? If you consistently deliver what you promise you will never have a problem getting more clients or getting paid from them. If you don’t you’ll simply loose the ones you have, and you will definitely not see any new ones. Good news travels fast but bad news spreads even faster.

When your company receives income what do you do with it? Pay the bills, put some aside for a rainy day, buy a new piece of equipment? Truth is, if you are not doing all of those things with your income, you are not managing your money properly.

Do you charge enough? Have you looked at your competition? What do they charge for the same service your company delivers? There is a definite formula to work out so you charge the right amount to enable your company to keep going and growing.

Do you maintain your facilities and equipment? If not, your working too hard at trying to save money by making it a nightmare to be able to get anything done. The truck breaks down, flat tires on the trailer, the pump won’t start on the jobsite and that damn generator blew up. Not maintaining your “stuff” costs about 3 times as much in emergency repairs, 5 times as much as lost production time and turns good employees into disgruntled ones. And that cost is immeasurable due to the chaos it creates, driving the company morale into the toilet.

What can you do to improve the amount of money the company makes? Have a look around based on what you’ve read here. Take one thing and clean it up and put a workable system in place to handle that area.

Then do the next one.

And the next one.

And so on.

You’ll begin to see and understand ALL of the actions it takes to make and have enough money. You’ll see how the structure of the organizations has to flow, one action to the next.

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Do you play The Waiting Game?

If you are a game show nut and Steve Harvey is one of your favorite game show hosts, even if he was the host of The Waiting Game, you probably wouldn’t watch it, and definitely wouldn’t play it.

How boring and stupid would that be? Let’s say there are two teams. Each one just sits there and waits. Nobody DOES anything. Each team asks each other a lot of questions which always have the answer “we don’t know” or “we’re working on it” or “let me check with someone and I’ll get back with you”. There is no action, no purpose, no goal.

You’d avoid that game like the plague.

So why put up with it in your business?

Oh, you don’t think you do. Well… here is a Waiting Game scenario: You submit a proposal for a 3-week project and the client tells you the job is yours and the start date. Weeks go by. You ask questions. The client asks questions. Nothing goes anywhere and after a month of this you still don’t have a signed contract.

You have not been booking work for that job’s time period. You were keeping that 3 weeks open for that client because he kept saying you have the job.

So now it is 2 weeks before you’re supposed to start. “Oh, yes yes”, your client says, “you’ve got the job”. “But I don’t have it in writing, no contract”, you tell him. He tells you, “oh it is going through the system”. You have been waiting a month of it going through the system.

You still have to make all the preps, order material, make stuff, put a field crew together, rent equipment, do a site survey and any other operations required to successfully start and finish your scope of work. Because, NO MATTER WHAT – YOU NEVER DO ANY OF THOSE THINGS UNTIL YOU HAVE A SIGNED CONTRACT OR PURCHASE ORDER. It will otherwise be a waste of your time, your company’s time, resources and money. Without some form of agreement, you will have no recourse when it all goes to hell in a handbasket.

The phone rings and it is another one of your clients that needs you for a 6-week job. You go to the meeting to find out that they want more than they told you and you have to start in 1 week.

But now you have to tell the new client that you “think” you are booked at the time they need you. You explain the situation and the new client says, “we’ll just get you a contract before the other company does”.

You have been playing The Waiting Game. So, what do you do? Stay loyal to the first client and continue waiting and maybe never get that job anyway? Or take the one that just came up and too bad for the first one?

The answer is easy. Call the first company and tell them you need the signed contract by end of business that day. If you don’t get it, take the second job. If you get more lip service take the second job.

If you don’t take the second job and the first one never comes, then you now have nothing for the company to do for 3 weeks because you have played The Waiting Game too long. Don’t watch that show. Control your clients like you control your company… for the good of all.

Ever Wondered What to Do?

So you have this project that has prints and specs, you’ve been there to check out the project site and conditions and your start date is scheduled to have you arrive and perform your scope of work. You sign the contract, shake hands and leave. This is going to be great; you think to yourself.

You go back to your office and make all the arrangements to start the project in three weeks. You make a schedule, assign personnel, allocate vehicles, equipment, tools and supplies. You order the material and allocate the three weeks it will take on site.

Three days before you’re scheduled start date you call your client and he says, “oh yes, we are all ready, come and execute your scope of work”.

The start day arrives, and you pull the trigger and put everything in motion for a flawless delivery of your services.

About an hour after you knew the crew was starting on site your phone rings and on the screen, it says it’s your crew foremen calling.

What happens next shocks the hell out of you. Your foreman tells you the site is not ready and the area where you are supposed to perform your services is not even finished being built!

So now what do you do? You have spent a couple thousand dollars getting ready and mobilizing. You have all the material to hand, fabricated and delivered for install. You’ve spent tens of thousands on that. You made the schedule according to the info from your client. Now, your stuck. You can’t work, can’t get paid and have nothing for work because you allotted 3 weeks to do this project and your next project is 3 weeks away.

But it gets worse… you’ve got all this money and time tied up. Now you have to demobilize and return to this project when it is ACTUALLY ready. This creates a huge problem in scheduling around your future commitments. So now, extra help is required and so extra costs to you.

Well, this first thing you do is document exactly what has occurred, what will occur and why, sending it to all parties involved directly on the project. Make sure this includes all the correct times and dates, the names of the people involved, the companies they work for and exactly what was said. Make it known that additional costs will be incurred because of this.

Then, write up a change order to cover the additional costs of the demob and remob. If there is rental equipment involved make sure that’s part of the charges, and you’ll have to return it and make sure it will be available for when you can do the project.

Finally, you request to be paid the value for what you have already completed and the change order, before you return to finish the scope of work on the site. You did not create the problem and therefore you should not be paying for it. Get paid what you have invested in the project before you return to finish it. You delivered what you promised, so it is only right that your client does the same.

In closing, remember this – get EVERYTHING in writing, right from the first communication about the project. Then if this scenario happens to you, you already have every written document to back your claim of correctness in the matter, as well as helping your client ferret out who the real culprit is and get that corrected so it doesn’t happen again in the future.

How Do You Price Your Company’s Products & Services?

There is almost always a misunderstanding among contractors and clients alike when it comes to the cost of things. Anyone wants something of a certain value and more often than not, wants it as cheaply as possible. It’s the old having a “Cadillac on a Volkswagen budget” thing, if you are as old as me and remember that phrase. People want the nicest of things but shop by the cheapest costs and often settle for lesser quality just to have a facsimile of the thing.

Pricing represents value for sure. But, price and value can take on very different colors. Let’s take cabinet makers as an example. Bob, just Bob, makes custom cabinets by hand out of the best solid wood available and his craftsmanship is beautiful. He operates out of his 2 car garage and has very low overhead. A cabinet from Bob costs $300.00.

Joe has a company of 10 employees that makes custom cabinets out of a decent grade wood, has automated equipment in a large facility that can pump out many cabinets at a decent quality. There is a machine operating here that needs a definite amount of energy every month in the form of money to keep that machine (the company) in operation. A cabinet from Joe costs $250.00.

And then there are big box stores (orange or blue in color) that stock cabinets that look nice but are made out of particle board with silk screen finishes that require assembly. There is questionable quality but it IS a new cabinet, even if not custom, it will do. A cabinet here costs $100.00.

This concept can be applied to any product or service. It can also be used to back up your prices being fair and competitive in your market. As you can see you must compare what you do and provide against what the price is, convincing or showing the client the value, as well as why you are better than the lower cost bid.

People want proof of what you do and what you have done. Have samples, brochures with lots of pictures and client testimonials. Showcase your work and let that promote for you. Have a killer website which shows your work, your capabilities, your facility and your craftsmen along with their qualifications as well as their accomplishments credentials, certifications, education, etc.

It is important that your previous and existing clients back up the story you tell. If you do that then people will be happy to pay your price because others already have, all the while vouching for you.

In my book, The Nuts and Bolts of Erecting a Contracting Empire, Chapter 4 tells you how to properly price your products and services and how you correctly use the money to keep your company going and growing.

So, if you are having a struggle with pricing the value of your products and services, you may want to have a look at our online course just for Chapter Four.

Get the full story.

How Do You Handle Your Company Finance?

Money. If you have too little or no money you are frowned upon by society as well as your peers. If you have plenty of money the tax man taketh. So what’s the answer to this riddle?

There are many schools of thought on the subject of money, finance and economics. Most of them so complex they are literally not even understandable. There are however, very simple methods of handling money, so you can have some.

Chapter Four in the book The Nuts and Bolts of Erecting a Contracting Empire is titled The Basics of Company Finance. It includes all the basic principles and practices to manage money and finance not only for your construction / contracting company, but for ANY business, personal or household budget.

The very simple actions that need to be taken to insure your bills are paid on time, how to have a cash stash to get you through periods involving income shortages, and, developing a financial strategy for your future.

It may not be so easy to change the ways you thought money and finances should be handled at first. BUT, I promise you, if you execute these very basic actions, you will succeed and eventually have money.

The stress will go away and you will be able to have some more time as well.

It has been said that money is the root of all evil. And my Mom used to say, “everyone needs roots.” Truthfully, the only evil concerning money is not having any.

Many people operate with the idea that they have a salary and the salary is not enough to sustain their life the way they want. I have worked with everyday people and owners of companies who believe this and every time I reviewed their finances, have been able to show them how to get out of the soup, turn their finances for the positive and plan for the future. Every time.

You see, the actual cause is not money, it is what is done with it once you have it. It doesn’t matter if you have little money or tons of money. It matters what you do with it.

So, if you are having a struggle with money, you may want to have a look at our online course just for Chapter Four.

A Change Order – What is it?

A change order is a document one gets to perform extra work over and above the original contracted scope of work. It is almost always the result of some discovery once into the project that could not have been seen or realized beforehand.


A change order is also called a “CO”. Most companies require a Change Order Request, or “COR”. The COR is from the sub-contractor to the general contractor. This is where one writes up a full detailed report on the findings, why extra work is required, the work to be performed which is in addition to the contracted scope of work and the impact the extra work will have on the project schedule.


Then once reviewed by the contractor, the request is accepted or denied. If accepted a Change Order is issued to the sub-contractor and the sub may proceed with the work. You NEVER perform work over and above your contracted scope of work without a signed Change Order. Chances are you will not get paid for the extra work.


There is also another way a Change Order can be brought about. It can come from the general contractor to the sub-contractor. This is called a Request for Change Order or “RCO”. This usually happens when the engineers or architects find that what they originally wanted done cannot be done or must be done differently. In this case, you would receive the RCO, do your investigation of the actual details and price the additional scope of work. You would then write it all up and submit it for approval.


If you use sub-contractors, there are those out there that you must know about. These subs low-ball the bid for their work just to get the job. Their bids are very vague, and they never list out a specific scope of work for their services based on the drawings or project documents.


Their idea is to get the work and then change order the job to death, coming up with some cockamamie ideas on how it wasn’t included in their bid, therefore they are not contracted or under obligation to do it. This becomes a dangerous endeavor all the way along the line.


As the contractor you are between a rock and a hard place. Since you priced the project based on that bid, you only have that much money allotted for that scope of work. Now that your sub, or even multiple subs are beating you up for more money – or they won’t finish the project, your only choice is to go back to the owner and try to explain the cost overruns. This will of course get ugly. The outcome is never good for anybody. The owner’s argument will be that it is your fault, and I hate to tell you, it probably is.


Chances are you did not perform due diligence on the integrity, performance and reputation of who you were contracting.


I remember a project I was asked to bid for the US Army Corp of Engineers acting as the contractor on a hydroelectric dam upgrade project. I spent weeks working with the project manager, giving away valuable insight and information about the project, suggested better means and methods and had a slew of mistakes and missing info added or revised on the plans. There were 11 total bidders. 10 of us were around $1.3 million for the job, all within 10,000 dollars of each other. You can’t get any more accurate than that. 10 separate bids all so close is a testament to each of those companies and the fact they know the project requirements and how they will perform the project to a successful completion.


The 11th bidder was at $438,000, about a third of every other company. The project manager told me he had to go with that company because it was his duty to protect the taxpayer’s money. I tried on many occasions to show him the handwriting on the wall. He said he took an oath as a public servant which involves being bound to only accepting the lowest bid. No amount of review of the blatant facts could convince him otherwise.


I told him do not call me back when it all gets ugly. I explained that in the bid process I, without cost, enabled my company and all the other reputable companies to formulate an actual and correct proposal for the project and I was not going to waste one more minute helping him.


Before the scope of work even began at the site, the “low bid” company held the majority of material hostage for change orders. When they did not get them approved, they filed bankruptcy, went out of business and never stepped foot on the job site. The material suppliers went and took their material back for non-payment.


The project manager did call me back to say he should have listened. The project ended up costing taxpayers 2.1 million when it was salvaged, turned around and successfully completed.


You MUST qualify all companies before you have anything to do with them. Whether you are in the position of contractor or sub-contractor, know who you are dealing with before you deal with them.