Survival or Success in The Construction Industry – The Choice is Yours

We have been, and are still, in one of the most challenging business environments any of us will ever experience as contractors, subcontractors or service providers. But the most fascinating fact is that many businesses are busier and more profitable than ever. What’s Up With That?? The answers might be simpler than you think.

While consulting with numerous small and mid-size companies in the construction industry, I find a few facts that are consistent. Success is directly proportional to the owner’s or manager’s ability to understand what activities and business procedures are relevant to success. They ask the hard questions and deal with the answers – no matter how painful.

However, the majority of struggling or failing companies that come to us for help are typically so bogged down in the fight for survival that they don’t know the correct questions to ask to find a solution, or they know they need help but feel that revealing their problems might be seen as a weakness or failure on their part as owners or managers. It’s so disheartening that one’s pride can stand between success and failure.

I love construction because of the people. We work hard, we love our families and recognize that sometimes the long hours and travel limit our time at home; we play hard, we sometimes argue and act like tough guys but, at the end of the day, we truly care about each other. Our success on a project is a collective effort of the entire team, and when we complete a project, we each are proud of the final product– that new bridge or roadway, building, tenant space or custom home. We made that happen with our own hands, sacrifices and efforts.

These qualities that make us great also can be our worst enemies. We tend to think of ourselves and our businesses as indestructible and bulletproof. We find it hard to recognize that we might fail, and in doing so, avoid the pain of asking for help. Being human, we are all programmed to move away from anything that might cause us pain. Asking hard questions about ourselves and our businesses can be very painful, but absolutely necessary, for survival and success.

If your business is thriving or struggling, I challenge you to continually examine your actions and question everything you and your employees do and every activity you and the business are engaged in. To help get you started, here is a list, in no particular order, of the top issues I encounter daily as I work with companies to make them successful and profitable.

  • Who are your most profitable clients and how do you market to them? What are your most profitable project types?
  • How do you estimate projects and what procedures do you have in place to evaluate estimates vs. budgets vs. actual completed cost to verify your actual labor and material costs?
  • Do you know your true Labor Burden cost, are all the cost relevant and included and when was the last time you calculated it?
  • Do you have a solid job cost accounting system that can generate accurate and timely reporting? Do your cost codes correctly reflect your project types and provide you with the granular cost data to accurately analyze your financial performance?
  • Do you review G&A costs on a regular basis to look for waste? (Like mobile and office phone services and providers, gas or auto reimbursements, tools and materials purchased at such places as Home Depot, etc., office supplies and similar expenses that directly affect job profitability.)
  • Have you reviewed your corporate structure and organizational chart to accurately depict how you are staffed and how you lead? Do you have the right people doing the right activities in your company? Does it support your current business model and project types?
  • Do you have competitive benefit and compensation programs in place to recruit and retain top talent?
  • Do you have a Policy and Procedure manual and does every employee have a copy? Is it up to date?
  • Do you have a Safety Program in place that meets the minimum OSHA requirements? Does every employee have Safety manual? Is it up to date? Do you hold regular safety meetings and training as described in your manual and required by OSHA?
  • If you perform work that falls under the Davis Bacon or Service Contract Acts, do you consult with a bona fide benefit provider on how to increase your profits under these contracts?
  • Do your banking, legal, insurance and surety programs support and protect you and the company for your current work program and work environment?
  • Have you thought about or addressed succession planning and asset protection for your business?

We’re here to help you and your company to succeed. Contact us anytime we can be of assistance or if you just want to talk. Life is short. Make the most of it by addressing and managing issues, not hoping they will go away.

What will you choose?  Survival or Success?


Survival or Success in The Construction Industry – The Choice is Yours

At The FlatRock Group we help companies succeed by helping them understand why many contractors fail.  Call us today and let’s discuss area in your company that you would like to improve for growth and success.


Kent Leighton       830-201-0678


© 2015 The FlatRock Group All Rights Reserved


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About the author

Kent Leighton, Founder of The Flat Rock Group, has more than 40 years of experience in the Construction and Development Industry. Having owned a successful midsize General Contracting firm he understands the opportunities and trials of running a successful business enterprise. His passion is sharing his victories and his scars with leaders and managers to help them grow and prosper.