Big business starts as small business especially in the construction industry, which is primarily made up of tens of thousands of small and medium sized privately owned companies. Today I am addressing the contractors who are still of a size to be building their organizations for maximum profitability. Contractors who have grown over years tend to become resistant to change. But companies that are coming into their own can consciously strive to create organizations of experts who market their services based on their reputation. Vision is the key to success in this modern marketplace. Experts make money.

The Way It Was  

I began my career in construction partnering with my brother in a startup family-owned contracting firm. In the beginning we scrambled for business, taking any job we could get in our local market. We didn't particularly care what kind of project it was. We just wanted to get the work, so we bid on anything and everything. If we got a job, we would rush around hiring enough workers to get the project completed, utilizing on the job training to learn how to build any project that was new to us. We kept the home office staff to a minimum since we often didn't know where our next job was coming from. You might say we were in survival mode from the very beginning.

I am sure many of you find yourselves in survival mode, particularly if you have recently started in business. Getting out of "survival mode" and into "growth mode" and eventually "thrive mode" is your objective. The question is how do you do that?  Somehow, my brother and I survived and the contracting firm we started lasted sixty years. Years later, after I became a construction academic and consultant, I looked back and asked the question, "How did we do that? Why did we survive when so many other start-up contractors failed?  What were the determining factors?”

Luck Helps

Thank God my brother was a stickler for doing things right. If the work wasn't near perfect by his standards, we would tear it out and do it again. Not a good way to make money. He ran the office, and neither of us were experts at management or finance, so we spent time running from pillar to post finding work wherever we could. Without either of us realizing it we were gaining a reputation for quality work one project at a time. We didn’t necessarily have a plan. We were just doing what came naturally.

When the job of rehabbing the rectory in our church parish came around, we had an inside track to get the work. In our usual manner we did a great job on the rectory and were soon hired to build an elementary school nearby. 

Persistence

Clients continued to hire our growing company to build or renovate commercial projects, churches, and schools. The quality standards my brother insisted on cemented our reputation as one of the best builders in the area. Often on private work we were asked to submit a budget and usually got the job. We learned that without having to cut corners we could price our work fairly with ample profit built in.

Common Sense

Because of my brother’s quality standards, we would only hire subs based on their reputation for excellence and key operations personnel who were recognized experts. To him it just made sense. I, on the other hand, constantly complained that we were paying too much for everything because it was my job to build the work for a profit. It took me quite some time to realize that it was our reputation for quality that enabled us to charge an ample price and be sure we made a fair profit. It was the cost of high quality that kept us solvent all those years. Ironic.

Attention to Detail 

After a few years of "pillar to post" and last minute financing we began to insist that we get paid within the number of days called for in our contracts. No excuses. No slippage. No contention. In other words, we began to insist on the same quality of work from our accounting department "experts" as we demanded from subs and our expert craftsmen. 

Without realizing it, we were following the strategy outlined above. Based on our reputation for excellence, we were selling expert construction services that only our team of carefully chosen experts could produce.

Reputation for Excellence

Our reputation for excellence kept the cash flowing into our company. We continued to work for quality clients and based on our reputation we were sought after by architects and repeat clients. We rarely had to submit the lowest bid to eventually acquire the job.

• The more experts we hired, the more expertise we developed.
• The more expertise we developed the more efficient (more profitable) we became.
• The more efficient we became through experience (sticking to one kind of job), the more we tended to build only what we already knew how to build.
• We were beginning to realize that experts make money.