Tag Archives: Construction Scheduling Software

ABC Launches “Building America: The Merit Shop Scorecard”

38

Associated Builders and Contractors (ABC) launched an online scorecard that will review and grade state-specific policies affecting the construction industry. “Building America: The Merit Shop Scorecard” is a website where builders, contractors and suppliers can view which states have created beneficial or subpar environments for the construction industry.

Quick Overview about the Associated Builders and Contractors (ABC)

Associated Builders and Contractors (ABC) is a national construction industry trade association representing nearly 21,000 chapter members. Founded on the merit shop philosophy, ABC and its 70 chapters help members develop people, win work and deliver that work safely, ethically, profitably and for the betterment of the communities in which ABC and its members work. ABC’s membership represents all specialties within the U.S. construction industry.

What is Building America: The Merit Shop Scorecard?

Building America: The Merit Shop Scorecard reviews and ranks state-specific information that is significant to the construction industry. The scorecard is a tool to identify states that are embracing the merit shop philosophy via legislation, policies, priorities and valuable programs, as well as highlight states where proactive and strategic improvements need to be executed to create an environment conducive to the industry’s needs. Rankings have been assigned primarily based on the core issues concerning merit shop construction, including state policies on Right to Work, prevailing wage and government-mandated project labor agreements.

US States are ranked based on how construction-friendly they are

Overall ranking (1-51) is determined through a combined score of the seven graded criteria. Ties in combined score being broken by performance on ABC core issues, with secondary consideration given to additional graded criteria.

Every state received a score in each of the following seven categories measuring critical laws, programs, policies, and statistics impacting the merit shop contracting community. An overall comparative ranking was then assigned to each state by considering all measured categories, with particular emphasis given to the first three criteria of project labor agreements, prevailing wage, and Right to Work state laws and/or executive orders.

Ties in combined score were broken by performance on ABC core issues and a consideration of the other scored criteria grades.

  • Project Labor Agreements –  State policies on government-mandated PLAs on public and publically assisted projects.
  • Prevailing Wage – State policies requiring contractors performing work on contracts procured by public entities or with a certain threshold of public funding to pay a government-determined prevailing wage to construction workers employed on a contract subject to the requirements. 
  • Right to Work – Right to Work law or other statutory protection of a worker’s right to secure employment without being forced to join a union.
  • Public-Private Partnerships (P3s) – State allows public sector entities to enter into contracts with private sector entities in which both sectors share the risk and revenue from a project.
  • Workforce Development – State provides financial incentives directly to employers or associations that train their workers through registered apprenticeship programs or other industry-recognized programs like those provided by NCCER (formerly the National Center for Construction Education and Research); state provides financial incentives to employers that hire workers that possess an industry-recognized credential or are a graduate of a registered apprenticeship program.
  • Education – State policy allows for flexible high school curriculum standards that promote rigorous and relevant skilled trades and career and technical education (CTE) opportunities for career readiness, as well as college preparation opportunities.
  • Job Growth Rate – Data provides the Compound Annual Growth Rate in construction from 2011 to 2015 using data from the month of August. States with a higher growth rate were given higher scores than states that had a low or negative growth rate.
  • Prompt Pay – State has public and private prompt pay requirements for owners and higher tier contractors to pay subcontractors.
  • Immigration/E-Verify  – Identifies states that require employers or state contractors to utilize E-Verify. ABC National’s immigration policy calls for federal preemption of state-level immigration-related requirements. 
  • State GDP – Percentage of state GDP directly resulting from nonresidential construction (2013).
  • 2013 Incidence Rate – Data tracks the 2013 incidence rate in construction, which is collected and reported by the Bureau of Labor Statistics (BLS). This is a lagging indicator, with 2013 being the most recent information reported through the BLS survey process. The rate is calculated as the number of incidents per 100 full-time workers. While this is important information to have on hand, it remains non-scored because the variables that affect incidence rates are numerous and require much greater context to demonstrate the specific conditions that lead to lower rates.
  • Occupational Safety and Health Oversight – State occupational safety and health entities versus states controlled by the federal Occupation Safety and Health Administration.
  • Construction Industry Unionization Rate – Data indicates how many and what percentage of a state’s construction workforce belonged to a labor union in 2014.

Visit their website and view the scores at www.meritshopscorecard.org.

3 Simple Steps to Improving Your Financials

2

In the past couple of years, we’ve seen that the number of new businesses have risen, but at the same time, failure rates are also on the rise. In fact, almost half of all startup businesses fail within the first 4 years of operation.

One of the most common reasons as to why startups are failing is because they can’t really make out the meaning of the numbers in their financial statements. Inability to understand your financial statements means that you don’t know your targets, you can’t see your milestones, and you’re probably not aware of holes in your business. Eventually, this will lead to more bad decisions which then lead to closing up shop.

Of course, our goal is better construction management. So in this post, we are outlining 3 basic steps on how you can improve your company’s profitability.

1. Make Sure You are Charging Enough

In highly competitive markets, it’s very tempting to lower your rates in order to attract more clients and close more deals. But you have to remember that the long-term sustainability of your company depends on profitability. Therefore when creating (or revising) your pricing model for your various services, you first have to determine who your target demographic is. What is their income capcity? How much are they willing (and able) to spend for a new home or renovation?

Investigate what your competitors are charging so you’ll have an idea of the current market prices. Don’t be too quick to lower your rates just to grab more customers though. You may outnumber your client’s projects, but with unrealistic prices, your profits may still be in the red. Consider all of the costs and investments that go into your construction business. Factor in all labor costs. What is your ideal profit margin?

Don’t be afraid to stand up for what your services are worth. Lowering prices might compromise the quality service that you should be offering.

2. Always Have a Positive Cash Flow

As builders, we know that cash-flow is a major issue during slow months. Since most of us get paid based on progress billing, not having enough cash-on-hand can spell big trouble when it’s time to pay your employees, contractors, suppliers, and utilities. Businesses that don’t have enough cash flow usually resort to borrowing, but make sure that all of your current and future debt are well-planned. Study your income and revenue for both your peak and lean seasons. Don’t kid yourself into thinking that it will always be Christmas. In any business, there will be peaks and valleys so you need to prepare your financials for any possible scenario.

3. Monitor Your Expenses

An educated forecast of your income will definitely come in handy, but at the same time, it’s also a must to map out your expenses. Stay up-to-date on your bookkeeping in order to have a clear view of your cost structure. Know your recurring expenses and prepare for variable expenses. Do you have any inventory or long-term investments? These should be taken into account as well.

Remember, getting a good view of your company’s spending habits (and schedule) can give you a lot of information about your big-ticket expenses. In addition, it will give you insight on areas that can be cut-off or limited. Knowledge and planning are the keys to better construction management.

While having an accountant for your construction business is a definite must, it is also your responsibility to know the basics of finance. The better your grasp for numbers, the higher your chances for profitability.

10 Most Common Complaints that Builders Get

39

Unhappy clients can spell big trouble for your business. Just one sour project can snowball into a bad reputation. And of course, we all know that word of mouth spreads like wildfire, especially if the source is extra passionate due to extreme anger.

Prevention is better than cure. So before you run into a big mess, we’re listing down the 10 most common problems that construction clients complain about. Take down notes because these are the issues that you need to avoid.

1. Poor Work Quality

This is the most basic of problems when it comes to construction. The outcome of any project is the main determining factor of whether or not your client is happy with your work. This is where your construction managers come in. There has to be a good system of checks and balances throughout the construction process. It’s also important to ensure that you are getting professionals for your team. Newbies are welcome too, provided that they are well supervised by pros.

2. Failure to Turn Up or Arrive on Time

Business is all about building relationships and that’s why it’s so important to start off on the right foot. The most crucial is on day one of the project. Your crew should be on-site early. Punctuality is a sign of professionalism so it’s a must to reinforce this with your on-site crew.

3. Messiness, Failure to Clean Up

Okay, so with #2 it’s all about first impressions last. What we need to remember is that lasting impressions are important too! Never leave the site in a state of mess. Whether it’s a small home renovation or a brand-new build, a clean-up crew should make the place presentable. It’s also important to clean up at the end of every work day as this is helps motivate the crew for tomorrow’s fresh start. It’s also vital for avoiding work area accidents.

4. Asking for More Money than Agreed

Clients are always on a budget. Period. So unexpected jumps in project cost will surely be met with angst and hesitation. This can be solved by proper planning and adding a bit of a buffer for emergencies.

5. Proposed More Work than Necessary

In simple terms this is called cheating. Please, if you want to stay in business for a long time, always make it a point to provide true value for your customers. These days, it’s so easy to communicate with other people, plus there’s so much research that can be done on the internet. It’s quite hard to outsmart well-researched clients.

6. Failure to Do All the Work Required

There is nothing more infuriating than a contract that’s been fully paid and yet, not fully accomplished. This could be deliberate, or this could be an honest mistake from your end. Again, the key is a good monitoring and reporting system to ensure that all tasks are performed well.

7. Causing Damage to Property

Save yourself from the headaches of a lawsuit, and avoid damaging the property of your clients. It’s as simple as that.

8. Disputes Over When to Pay

Most of us charge based on progress billing or milestones. Make sure that you and your client are always on the same page over these things. Clarify the details of the contract prior to the actual build process and give them constant updates as to the progress.

9. Miscommunication Between You and Client

Are you always hard to come by? How quickly do you respond to their inquiries? Who is their point-person for any issues that may arise? How often do the clients get updates regarding accomplishments and milestones? What is your agreed method of communication? Minor miscommunication can lead to big problems if you don’t have the proper systems in place.

10. Delays Over Completion

Imagine yourself getting all excited (for months) to live inside your dream home. You’ve spent money renting a smaller place for the meantime, or you’ve been living with a friend or some relatives during the construction. You may have also spent money for temporary storage of your belongings… And then right when you’re ready to move in, BOOM! There’s a 2-week delay. Actually, even a week or a few days of delay is enough to infuriate any client. Again, this will end the project on a bad note which is a big no-no!

And there you have it. The 10 most common complaints that builders get from their clients. Make sure to avoid them before it’s too late.

If you think about it, most of these problems can be solved by proper communication, sufficient planning and effective project management– the keys to the success of any construction business. Now it’s up to you to create happy customers!

 

The Goal is Not to Compete, It’s to Dominate

40

Economists always say that perfect competition is the ideal setup of a healthy marketplace. However, if we were to look at this from the point of view of a business-owner, perfect competition is actually very dangerous. Why? Because in a market where there are a lot of options offering the same products or services, it’s very hard to create your own identity and stand out from all competitors. Here’s the reality: in a perfectly competitive market where one company is just as good as the next, it means that, should you slip up and fail, it wouldn’t matter much because any other company can replace you in a matter of seconds. When you’re equally comparable to every other company out there, it’s easy to die a quick and quiet death. Nobody will even notice the absence of your company.

We can’t stress this enough: You HAVE to stand out and separate yourself from the pack. In fact, the goal is to gain a strong hold of your target market. How can you dominate and become the BEST option for customers? The ONLY choice of your clientele?

Unique Technology

Oftentimes the deciding factor is technology. When you have a unique technology at your fingertips, you can offer something new to the market. You can provide services that have never been possible. You can address problems that are usually brushed off or have never been though of before. Certainly, the best way is to invent something of your own. But the next best thing is to employ the latest technologies out there. Upgrades that will significantly affect your business in a fast, and positive way. Find tools that your competition hasn’t discovered yet!

Offer a Unique Service

Think of it this way, say you’re at a neighborhood potluck and everybody accidentally brought pork dishes. The best way to stand out at this party is to bring something new to the table. A special dessert or an unforgettable seafood dish will definitely ignite more attention and tickle the guests’ palates- palates that are sick and tired of pork. The same goes for business. Think about how you can offer something new, something that your competitors don’t offer.

Make yourself stand out by offering a unique service. This is a big challenge for builders. In an industry that’s been established for decades upon decades, what will be your X factor?

Creating a Unique Brand

It’s also important to market yourself properly. You have to position yourself in the market in such a way that your customers will be drawn to you. What message do you want to send them? How do you want them to see your company? Who are you to them? How can you touch their hearts in a personal way? Your message should be carefully crafted and then thoroughly implemented in the company. It should be visible in your marketing collaterals (website, brochures, flyers, signage, etc.) as well as in your people too. Your employees, even your contractual ones, should be briefed about your company’s mission, vision, and market position. Send your message by living and breathing it.

Consistent Performance

We all know that after sealing the deal and getting a contract, our work has officially just begun. If you truly want to dominate the market, you should hit a homerun every single time. No project is too big or too small. Every project matters. Every client matters. Consistently excellent service will give you positive feedback, good word of mouth, and valuable referrals. In an industry where you’re only as good as your last project, it’s essential to always do a good great job. There’s no room for hit-and-miss, make it a slam-dunk each and every time. Be the expert. Be the go-to guy. This is the key to longevity and market dominance.

It’s not an easy task but if you truly want to succeed, you have to remember this- competition is not what you want. What you want to achieve is market leadership. To become number one. There are countless builders out there. What will make you stand out from the pack?

 

Automated Trackers will be on the 2016 NAHB International Builders’ Show and we’re giving away free passes. Click the link below to know more.

First-time Buyers, Significant Chunk of Housing Market

41

August 2015 Homebuyers Trend

According to data from The National Association of Realtors, 32% of existing-home sales in August 2015 came from first-time buyers. In fact, first-time buyer share increased by 4 percentage points from July 2015. Their buyer share also increased by 3% compared to last year.

When we say first-time buyers, this means, first-time homeowners. A demographic that is relatively young. This group is typically composed of young couples, young professionals, and people who are just about to start a family. Previous renters, who now have the capability to buy their very own house, are also part of this demographic.

So what’s the reason behind the powerful spending power of first-time buyers?

This increase in the spending habits of first-time buyers is due to sustained net job creation, a low interest rate environment (with 30-year fixed rates at below four percent for most of 2015), and better pricing of FHA-insured mortgages.

Low Interest Rates for the Rest of 2015

Rates are expected to remain around 0 to 0.25 percent at the end of 2015. The Federal Open market Committee announced today that the benchmark interest rate for short-term lending will remain at its current target level of 0 percent to 0.25 percent. According to Zillow Chief Economist, Svenja Gudell, “The federal funds rate, and in turn mortgage rates, remain low and will likely end the year roughly where they started it.”

This is good news for prospective new homebuyers who will remain to have some valuable wiggle room in terms of affordable markets.

The Builder Challenge

So, if you look at the statistics closely, it says that the 32% is for existing-home sales. This means that there is an equally ripe market for first-time homeowners who want to build their homes. Today’s generation is all about customization and personalization so there’s a huge chance that they will prefer a home that’s built specifically for them, instead of an old house that’s already out there. This is regardless of size.

In addition to this, even if they do buy existing homes, there is a huge potential for renovations and personalization. So for us builders, there is still a lot of opportunity that’s waiting to be seized.

The challenge is now up to you. How can you convince these buyers to spend their resources on building a new home instead of simply buying existing property?

How can you entice them to seal the deal with you instead of with previous homeowners?

How will you make your company stand out from other competing firms in your area? Will you charm them with unique design? Attract them with affordability? Or dazzle them with how fast you can hand-over their new house keys?

It’s up to you, dear builders. The clients are out there and the market is strong. Go get ém!