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

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.

========================

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

Truth in Advertising!?

Oxymoron is defined as a figure of speech that combines two normally contradictory terms.

Truth. Advertising.

Contradictory?!

Can't say that I'm finding much truth in the advertising I'm coming across lately, maybe I'm just skeptical.

Or, it could be that we talk to 1000's of contractors across the planet, and we hear "the other side".

Flipping through the pages of the most recent Construction Executive magazine (March 2009 Issue), I was drawn, obviously, to the construction software ads. I'm always amused by the claims, and the cut throat competition out there is getting nasty.

I wouldn't say any of these are our competitors. We are a niche software product, for small to mid sized contractors, with a particular focus on construction scheduling, file management (organization) and communications.

But the "big guys" are out for blood.

For instance...

Software A

  • states they're so far ahead of their competition, it's not even fair
  • claims they are the leader in construction management software since the early 80's (was there even software back then?! can't remember, perhaps the VIC-20 or Commodore 64)

Software B

  • warns you to "beware of imposters" - those that offer integrated construction solutions... but apparently don't in B's humble opinion 
  • claims if you use other software besides theirs, you'll be left dead in the water (ouch, this is serious business)

Software C

  • claims to be America's #1 construction accounting software (sorry Canada, and the rest of the world, we're only talking America here)
  • has a pretty picture of the CEO on practically every ad (still trying to figure that one out - I guess he's the guy that's writing huge checks for ad space... with your money!!)

So which of these software companies are telling the truth? And how on earth are you and I going to test any of their claims?

Personally, I have never knowingly spoken to any contractor that has used, or is using any of the aforementioned programs, so I'm not here throwing mud. But I do want to raise the issue of whether you and I are getting the truth in any of these ads (or any others we come across). Because, if we buy something based on a claim that ends up being untrue, well, how would you feel?!

A wise colleage said to me years ago... "The truth is good enough." He followed up with another maxim that "it's only true when it's true for you."

So now for the "truth" about BuildIT.

  • We're web based - nothing to install, nothing to maintain, no software headaches - period.
  • We're small - you call us, you'll speak to one of the owners of the company
  • We have extremely low overhead - your subscription goes to pay us - to build a better product - for you
  • We've been around since 2000, so in "Internet" years, we're old
  • We have never advertised in Construction Executive magazine
  • We generally don't do print advertising - most of our leads (including you most likely) come through the Internet from search
  • We're inexpensive, so you should see a return on investment within the first 30 - 60 days if you get lift off with the program

BuildIT has a great system that has helped many contractors over the years get control of their scheduling. It has helped them get more organized, and thus has been responsible for gaining efficiencies, building profits and avoiding costly mistakes, that if all added up... who knows what that number is. But I'll bet it's a big number collectively.

Recall the sage advice - if you think BuildIT is the best fit, test your claim, and see if it's true for you. Try BuildIT on a monthly basis, and if you don't see massive ROI in the short term, cut it loose... and you haven't sunk $1000's into some bloated software product that promised the world, and made some rather clever, if not misleading, claims.

Keep in mind, according to a recent article in Construction Executive, it's highly unlikely you'll use even 50% of a software product's capabilities... so why pay for the excess!? Determine what you need, what you're highest priorities (must-have's) are, and if they have anything to do with scheduling, file management, or improving communications within your team (and with those outside your organization), then there may be a good fit here with us.

(By the way, notice anything wrong with the compass graphic above!? - remember, "truth in advertising").

See you on the inside!

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