BuildIT Lean and Mean

Scott Sedam, President and Founder of TrueNorth Development recently did a presentation on Becoming the Lean Builder.

He nailed it.

For years, as a technical consultant for Weyerhaeuser's engineered wood product line, I saw waste and inefficiences everywhere I looked. Contractors were making money by accident, and leaving a lot on the table, and a lot of waste ended up in landfills.

I saw a big opportunity with BuildIT to help these contractors take the "good" job they were doing, and do it even better by becoming more organized, more attentive to detail, and more in control of their scheduling. So I invested in the Company, and soon afterwards joined the team.

As Scott mentions, from 1991 to 2006, considered by many the "Golden Age" of building, 90% of the margin made by 90% of the builders were made in 3 ways:

  1. Land appreciation
  2. Sales price inflation
  3. Volume expansion

Stuff was built, and people were buying. Efficiency was a great concept, but not really necessary when profits were made by default.

Along comes 2008... and the party's over. It's time to get lean, or get out.

For years, BuildIT has offered a system of tools designed to make contractors more efficent, and keep them more organized. The economic realities today are such that system like BuildIT are necessary for contractors to stay in business, and achieve acceptable profit margins.

Let's talk about "Lean" for a bit.

What is "Lean"?

It's not dropping your price to get the job. No point in working for free, or losing money while someone else gains from your loss. It's not making unilateral cuts across the board (materials, labor). It's not necessarily about reducing your expenses either, the mistake many make when considering whether they can "afford" to keep systems like BuildIT going.

It is about "doing less", but making it "count more". Plug the income and profit leaks in your organization, your product and your processes. Become intolerant of waste.

Lean is identifying waste in all it's forms:

  • Product waste (materials)
  • Process waste (time & labor)
  • Design waste (get it right on paper before mistakes are made on site)

Product waste is fairly self explanatory.

Check out these pile of goodies left over after a job - who do you think pays for this? How much $$ does this represent? Whose pocket would you like that $$ to be in?

         

Less waste = less cost = improved margins for contractors and better products for their clients.

Start becoming lean in the "product" category by becoming obsessive about product waste. Don't let it happen. Design it out at the beginning. Hire consultants like Scott Sedam to find out where this waste occurs in your product offering, and how you can turn this waste into margin. Sometimes it takes someone from the outside to show you.

Now about process...

Scheduling accuracy, wasted trips, change orders, communication issues. These and other process issues are hard to nail down. Quite frankly, it's a lot easier to deal with product related waste. But spend some time on this one... there are gains to be made, and they'll translate to dollars in your pocket. 

Let's look at wasted trips to the building site:

Scott's research shows that the typical builder averages 50 wasted trips to the jobsite. Times that by an average of $200 per trip, and there's $10K savings right there. While this may seem steep to most at first, do your own math. Keep a log of how many trips you make... that you really didn't need to (if you were more organized, and your subs were better scheduled, and you hadn't miscommunicated on some matter earlier). Figure out what your time is worth, per hour (be truthful here, what could you trade your time for), don't forget wear and tear on your truck, fuel, and opportunity cost (you could have used that time to work on a bid, land another contract, see your son's baseball game). Wasted trips are an indisputable time and money waster.

Let's say conservatively that half of those trips could have been eliminated using a tool like BuildIT. You've literally paid for BuildIT for 5 years.

Then there's the "saved day" in a building schedule:

I'm surprised at how many contractors I've talked with that have a loose schedule. They build in 120 - 150 days what an "efficient" builder who schedules with specific intent can do in 100 days.

Consider "interim financing" or carrying costs. Let's say those costs are $50 per day for a project. The total impact of saving just 1 day in the build schedule can exceed 5X that amount (or $250) IF that day is used for production (taking into account fixed costs and overhead).

Now imagine if using BuildIT (not just subscribing to BuildIT and checking it occasionally, but working with the system regularly to update the schedule, notify subs, and keep scheduled tasks on track and production happening on EVERY working day from start to finish) allowed you to shave off a week or 2 on every project you do for the entire year? Save 5 days per project, on, say 8 projects, and there's another $10K saved.

The numbers get ridiculous... in your favor. And still, I get those that balk at subscribing to our service for $85 per month because, in their words, "they can't afford it".

Yeah right.

What you need to understand: those that think they can't afford BuildIT really haven't done the math yet.

But their competitors will.

We hope you will too, and choose to become lean and profitable.

To your success !

 Scott Hutchinson
 scott@builditsystems.com
 1 866 585 5050 ext 1

BuildIT: proud supporter of Rally4Life.org

Bowler Nemesis 500 HP Ethanol burning DAKAR winner

"One of the largest traveling carnivals in the world" is how some competitors describe the DAKAR Rally.

And in 2011, Mark Jennings-Bates and his team at Rally4Life plan on being the first Canadian 4WD entrant in this prestigious event – driving the Bowler Nemesis pictured here (we hope Mark will keep these wheels on the ground for the most part!)

To get there, they've assembled a talented team of volunteers who span across several geographic regions of the globe – codrivers, factory team technicians, publicity pros, events coordinators, marketing, sponsorship, legal, accounting, adminstrative... and the list goes on.

And it's no surprise that these folks need many of the benefits that BuildIT users enjoy – virtual access to information and communications, from anywhere at any time. That, and the ability for each team member to be kept in the loop on events, to have access to marketing collateral, and for everyone to know Mark's whereabouts on his journey to the DAKAR.

"We listened to their plan, their dream, and caught a glimpse of their vision," says Scott Hutchinson, Sales Director of BuildIT Systems. "Not only does this event win the WOW factor for motor sports enthusiasts, but Rally4Life can use the exposure to raise awareness and much needed funds for the charities they support." When asked where BuildIT could assist, it only seemed natural to offer BuildIT to get the team together... virtually.

And this is far more than a cool motorsport activity watched by millions around the world.

Mark and Jackie Jennings-Bates have made it their goal to raise upwards of $4 million for 2 worthy charities along the way, and bring to the forefront the desperate circumstances endured by millions of children and adults in countries such as Nicaragua, Sudan and Equador. As they build momentum, through events, social networking, and good old fashioned "word-of-mouth," they will be asking upwards of 200,000 supporters to take $20 out of their coffee budget and participate in the R4L goal.

Around 20 volunteers have been given access to BuildIT. Branded rally4life.org email, access to videos, press releases, sponsorship packages, shared calendar for upcoming events – these are just a few of the ways that BuildIT will keep the team together — on the same page — as they journey towards 2011.

For more information on Rally4Life, and how you can get involved, check them out online:

Web:  http://www.rally4life.org/

Twitter: http://twitter.com/pbrteam

Facebook: http://apps.facebook.com/causes/273439?m=618c3fb4

Facebook Fan Page: http://www.facebook.com/#/pages/Rally4Life/277046695451?ref=ts

 Scott Hutchinson
 scott@builditsystems.com
 1 866 585 5050 ext 1

Help is a click away

Help.

There's a lot of it available out there... for you... and much of it is free. Help with your marketing, business management, and ways to stay competitive, cash flow positive, and ahead of the pack.

And in this economy, why not take advantage of it ! 

1. Network organizations

Business after hours, Chamber of Commerce meetings, BNI or similar business networks. Rotary, Jaycees, and other service organizations. Trade organizations like NARI, NAHB, CHBA (for you Canadians). Get involved, and get the word out on your business. Associate with those that are going through similar experiences, and brainstorm with them. Many of these folks are willing to share their advice and help you out. Hey, you may just shake hands with your next customer.

2. SCORE big time

I came across SCORE the other day (Service Corps of Retired Executives http://www.score.org/). Here's what they say about themselves:

SCORE "Counselors to America's Small Business" is a nonprofit association dedicated to educating entrepreneurs and the formation, growth and success of small business nationwide. SCORE is a resource partner with the U.S. Small Business Administration (SBA).

SCORE is headquartered in Herndon, VA and Washington, DC and has 370 chapters throughout the United States and its territories, with 11,200 volunteers nationwide. Both working and retired executives and business owners donate time and expertise as business counselors. SCORE was founded in 1964.

We are America's premier source of free and confidential small business advice for entrepreneurs.

Wow, I'd take them up on that one in a heartbeat. Just look at all the resources that are available for your small but growing business:

https://www.score.org/browse-library?view=standard

(and while you're there, check this out too! (https://dgtl.link/smallbizhome)

3. Small Business Administration

The Small Business Adminstration (http://www.sba.gov/), or SBA, helps Americans start, build and grow businesses. Through an extensive network of field offices and partnerships with public and private organizations, SBA delivers its services to people throughout the United States.

Not only can they provide you with business planning, services, financing, marketing and a host of other tools, they can also help you find local State resources.

4. Economic Development Administration

Each State has one, and they all want YOUR business. They want you to succeed in their State. And they provide the tools to help you: access to capital, technical assistance, educational programs, peer groups and referrals to others in your situation who may be able to help out. Find your State's EDA here:

http://www.eda.gov/Resources/StateLinks.xml

5. Free Software Productivity Tools 

There are some great applications out there to make your job, and life, easier. Some of it will also raise you up a few notches in professionalism.

6. Free Website

If you don't have one already, get one. Many free "template" websites exist.

If you subscribe to BuildIT, we'll give you one, and even help you get it set up.

You need a web presence. Your customers want to see what you're made of. And you'll fare much better if you give them a business card with yourname@yourbiz.com on it as opposed to a Gmail, Hotmail, or AOL email address (save those for your personal email - for business, spend a few dollars and get a proper email address that brands your business).

We can help you get a domain (www.yourbiz.com) and an email address yourname@yourbiz.com pretty quick, and for just a few bucks. Call us.

7. BuildIT

OK, time for the shameless self promotion :-)

But seriously, BuildIT is mission critical for many construction businesses that are weathering this financial crisis. This is a productivity tool that keeps you organized, on top of your scheduling, and gives key people visibility into what's happened, and what needs to happen next. Use it right, it will put more time back into your life, and more $$ in your jeans.

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So there you have it, just a sampling of tools and ideas geared to help you achieve more in your business.

Here's to your success !

 Scott Hutchinson
 scott@builditsystems.com
 1 866 585 5050 ext 1