Every contractor can probably point to at least one job during which even an estimate done with great diligence did not sync with emerging customer expectations. Insights from these experiences pave the way to success–if we heed them. Here are some pointers about communicating clearly and leveraging financial intel.
Avoid Unproductive Conflict Cycles
It’s not uncommon to lose precious hours and dent hard-won brand recognition by getting mired in heated battles about who said what, but industry pros remind us to avoid these unproductive conflict cycles:
You have the power to build awesome relationships and projects….If you are able to respond professionally and keep your team focused you will avoid problems, prove that you are not like other contractors and everyone will be a lot happier … .Just because construction is a fast-paced industry doesn’t mean you should always trust — and act on — your immediate reaction…Staying professional requires a change in mindset combined with the right habits.
Here for example is how one contractor navigated a conflict related to scope changes:
We were tasked with reconstructing an area of heavy duty asphalt paving. We had to over-excavate old bad base material, re-install new base, then install new, thicker asphalt. Upon excavation we discovered unexpectedly several old concrete footings from a previous carport. A change order was agreed to, but on excavation what had appeared to be 2 ft. x 2 ft. blocks were actually 4 ft. x 4 ft. – and some were even larger (weighing in excess of 4,000 lbs.).Clearly the scope changed, and another change order was needed. Our onsite equipment even had a challenge to pull them out, but we made it. The next challenge was disposing of them … .In the end, we hired a company that provided concrete washout pans that were capable of handling the heavy loads, so it made it a much easier process (at additional expense).
Success centered on clear communication“ every step of the way, even to those others not directly involved. We let everyone know the construction plans and next steps as we progressed.” Thanks to the sharing of consistent updates throughout the process, and a focus on problem solving, completion of this job resulted in new jobs and customers based on observations that the contractor “had taken a large project, complicated by unexpected difficulties, pursued and justified the necessary change orders, all under the watchful eyes and added stress of the owner and neighbor tenant. And it all went smoothly and turned out well.”
Leveraging Financial Intel
Knowing where the business stands at every moment is a powerful way to plot forward, even when things get hot. Although balance sheets tend to be overlooked, it is actually very useful to consistently review the balance sheet. Regularly analyzing the balance sheet, and the changes reflected on it as the year progresses, will arm you with decision making intel about assets, liabilities and equity to use in real time as you steer the business ahead:
- The assets section of your balance sheet lists out the various assets that your business owns, including your cash, receivables due from customers and others, inventory, and fixed assets.
- The liabilities section of your balance sheet lists out what you owe to others, whether it be to your suppliers, your bankers, government agencies, related entities, etc.
- The equity section of the balance sheet represents the owner’s value in the business. This section will show money contributed to the business by the owner, money taken out of the business by the owner, and retained earnings. Retained earnings are those earnings from prior periods.
Ultimately, to succeed, every contractor needs some elbow room–and time to spend building relations with current and new customers. Gain flexibility with speedy and easy bid, performance and payment bonds from Colonial Surety. Qualify for The Partnership Account® and you’ll even use our power of attorney to issue your own bid bonds, in minutes. Win and successfully juggle more work than ever as you leverage your:
- surety line of credit—in writing;
- private digital dashboard;
- daily snapshot of single and aggregate limits
- ability to update work on hand
Get started right now—and get your free financial scores too:
Pre-Qualify for The Partnership Account® for Contractors
Founded in 1930, Colonial Surety Company is a leading direct seller and writer of surety bonds and insurance products across the USA. Colonial is rated “A Excellent” by A.M. Best Company and U.S. Treasury listed. Let’s connect today: Colonial Surety.