Builders, are you the victim or the victor?
In tough times, it’s easy for builders to feel helpless with no control over their future. See how attitude has helped builders not just survive but flourish in tough conditions.
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Recently, the financial press ran a story of a builder who’d gone into administration, no longer able to pay their bills.
According to the director of the company interviewed, they’d fallen victim to rising prices, poor contractor availability, rising interest rates and the government’s COVID response. They called it an “economic tidal wave” that doomed their business.
But the article then provided the administrators reasoning for the business’ failure.
Remember, administrators have seen hundreds of company failures and have a duty to determine the cause and then achieve the best outcome.
In contrast to the Director’s comments, the administrator said the main causes for the companies failure were 1. under-pricing contracts, 2. disproportionality high company overheads and 3. poor tender outcomes (where the company didn’t sufficiently differentiate themselves from competitors)
That is, according to this battle-hardened Administrator, the cause of the company’s failure were all issues within the company’s control.
The administrator didn’t blame the economy, labour shortages, costs, or any other macro-economic external factor.
In truth, the company screwed it up and was trying to blame anyone or anything that avoided responsibility for themselves.
Never mind the luxury company cars in the office car park, the bloated salaries, their inefficiencies or their head-in-the-sand management.
The Director was being the victim, not the victor.
He wasn’t taking responsibility for his business, his choices, or his reality.
So, after hundreds of interviews with real builders – who generously shared their successes and failures – here are 4 questions you can ask yourself to test whether you’re in danger of being the victim, rather than the victor.
And…what to do.
Ask yourself:
Check 1: Does The Economy Suck and The Government Blow?
Interest rates, lack of labour, government regulation plus dozens of other factors dramatically effect builders’ business every day – in every era.
Some good, some bad.
The only thing a builder can do is play the hand their dealt.
While it might be easier to bitch and moan about things beyond your control, it won’t help anyone – especially your own state of mind.
And, while it’s completely human to be disappointed with bad situations, the builders we interviewed who flourished in tough times acknowledged their situation – then rolled up their sleeves to deal with it.
They focussed on the things they could fix – their sales pipeline, the people they employ, their marketing, eliminating unnecessary costs – whatever it took to make lemonade from lemons.
That’s the tenacity, resourcefulness and resilience builders show every day.
If someone sooks up on you about problems beyond their control, put on your hearing protection.
Focus on the issues you can control for success (and your own mental health).
Check 2: When Your Guys Mess Up on Site, Do They Blame Others?
If the guys onsite point to others when they screw up, the problem might be closer to home than you realise.
Typically, their actions are driven by a fear of your response to dramas.
That is, they try to shift blame because they expect you’ll toast them.
What if, instead, you coached them? Or asked them to come up with a system to fix an ongoing problem they claim is someone else’s fault?
You can set the tone. Always focus on the solution rather than getting stuck on the cause.
Put systems and agreements in place so that when there’s an issue onsite that the guys identify a couple of solutions and then recommend their preferred fix to you.
That means they stop bringing problems for you to fix. Instead, the bring the problem and a couple of solutions for you to choose from.
Check 3: Are Your Customers Clueless and Just Don’t Get It?
You’re right. Most clients are totally clueless at the beginning of the process.
There’s a massive asymmetry between what you know about building and a prospect’s understanding.
Handled the wrong way, it can feel like the client has a never-ending list of newbie questions that just waste your time – very frustrating.
But what if you could respond in a way that teaches the client and positions you as a trusted expert? (With minimal effort from you)
Think about the hundreds of questions clients have asked you over the years.
What if you distilled them into an FAQ document or infographic (use this free template).
That would allow you to pre-emptively answer the hundreds of questions clients have in minutes, rather than hours (or even weeks).
Best of all, it positions you as the trusted expert because you have all the answers.
Check 4: Are Competitors are Killing You by Undercutting Your Prices?
If you’re in a price-cutting market, ask yourself if you really should be there.
Competing as a generalist can be hard so why not focus on a specialisation you can make your own?
If you find a specific niche, you can become the best at it in your area. Checkout 6 Steps to Turbo-Charge Your Profits
If you do want to stay in the cut price market, the first thing you need to do is ensure you have the lowest cost for EVERYTHING. If you can’t do this, leave that market.
It’s true that many influences effecting builders are beyond their control.
Builders are a resilient and resourceful bunch.
What matters most is that you focus on the things you CAN control so you can still meet your goals and even grow your business in tough times.
You Might Also Like:
- Builders, Get Your Pricing Right Every-time – No More Under-Quoting
- Transform Your Building Business in 43 Mins (webinar)
- How (& Why) to Charge for First Client Meetings
- Take a Free Trial of ProCalc
- Stop All Free Client Meetings – Charge Upfront
- Want more tips like these? Attend the Webinar: Work Smarter, Not Harder
Richard Armstrong is a former registered builder who recently interviewed hundreds of experienced Australian builders to identify how they best manage clients, budgets and profitability.
