Are you still on Track for 2012? 02/09/2012
Happy February... I know we are already into February but how are you doing with your New Year’s resolutions? Implementation on a consistent basis is the key. I know that you know that but that doesn’t mean you are doing it. Who’s holding you accountable? Type up the following statement in big print and stick it on a variety of surfaces. Your mirror, your monitor, your dashboard. Without Action there is No Change Make this the year you actually do make a difference by implementing some great ideas on a regular basis. If you are looking for additional ideas you can download my book “Building Your Legacy” by going to Amazon and typing in the name or by following this link. http://www.amazon.com/Building-Your-Legacy/dp/B005W2D0D0/ref=sr_1_4?ie=UTF8&qid=1328032058&sr=8-4 I know it says they are “songs” but they are not, they are straight audio for your MP3. You don’t really want to hear me singing. As I say “I don’t normally sing and when I do sing I don’t sing normally”. If you are looking for more ideas maybe I will be in an area near you this Spring. Here is my current schedule of speaking engagements. If you need more info on any of them please let me know by calling 604.241.0666 or email me directly at ron@ronaldcoleman.ca Remember... Without Action there is NO Change! Take control and make 2012 the best year it could possibly be. Regards, Ron Seminar Schedule Feb - May 2012 
Add Comment Season's Greetings.. Make 2012 a Winner! 12/21/2011
Here's wishing you and all your loved ones a very happy, peaceful and healthy Holiday Season and prosperous New Year! To kickoff the New Year I'm offering two "Winning In Tough Times" seminars on January 4 and 6 in Ontario. Winning in Tough Times is is about the fundamentals necessary to stay in control to ensure that you make the most of your resources. Some topics in this course include: getting a detailed understanding of what exactly profit is and how to manage it; understanding the various trade-offs between pricing, product mix and volume; knowing how to improve profits; learning how easy it is to actually double your profits; understanding why the laws of supply and demand do not apply to trade contracting; developing good strategies for managing your service work; understanding the principles behind under and over billing; understanding the difference between downsizing by choice and downsizing by competition; identifying the elements you can use to dramatically improve your cash flow. January 4th Seminar January 6th Seminar I look forward to seeing you there. Limited to 20 individuals per session– do not delay in registering (first come, first served). Winning in Tough Times is not about Optional Extras. It is about the fundamentals necessary to stay in control of your business by ensuring that you make the most of your resources. Discover how to take control of the following elements of your business: -Profit: Learn to manage and improve profit and understand trade-offs between pricing, product mix and volume. -Work-in-progress: Obtain a better understanding of the principles behind under and over billing. -Pricing sensitivity: Understand the principles, and learning how to develop strategies to double your profits. -Breakeven sales: If you knew how much sales you have to do each month to cover your costs you would have a lot more control over your business and you could increase the accountability of your key people. -Overhead: Learn the crucial difference between overhead and direct cost. Did you know that approximately 50% of your overhead is salaries? And much much more!! HRAI in co-operation with FortisBC will be hosting a half-day seminar led by myself, Ron Coleman! Date: Thursday, December 8th, 2011 Location: Comfort Inn, 8255 - 166 St. (just north of Fraser Hwy, Surrey) Session: 7:30 a.m. to 12:00 p.m. (including a light lunch and refreshments) Cost: $40.00 + HST per person REGISTER TODAY - LIMITED SEATING. Limited to 50 individuals – do not delay in registering (first come, first served). HRAI is proud to offer this highly acclaimed business development program, tailored specifically for Residential HVAC contractors. Do you want to...... Generate more customers, get them to buy more often, get them to come back more often, become more efficient? Then take part in this half day seminar during which each participant completes a workbook full of low cost ideas, ready to implement in their business and tailored specifically to them.
Business Transitions - How are you managing? 08/05/2011
One of the areas I get involved in is helping business owners transition out of their businesses. This can involve selling the business, putting in new management or closing the business down. One major Burnaby mechanical contractor closed his doors in June. He decided there was no goodwill value in his business. Two owners of another mechanical business I worked with couldn’t come up with a solution that was acceptable to them so they have ignored the problem. Two owners of another mechanical business I am working with are putting additional management into place so that they can take more time off. One HVAC company with three owners has spun off the service company to one of the owners. I have seven companies, that’s right, seven companies for sale right now. The variations in them are quite something. Lower Mainland painting contractor: This owner is ready to retire. The company is extremely profitable averaging more than 14% pre-tax profit annually on sales of over $1.4 million. Despite the systems and client base and track record this company will see for between 2 to 3 times annual earnings. Prince George roofing company: Because of its membership in The Roofing Contractors Association we will likely get about $50,000 for goodwill and $30,000 for equipment. The company has been reasonably successful for many years, providing the owner with a good lifestyle. Fraser Valley roofing company: The owner makes in excess of $100,000 in salary and perks a year. This is an opportunity for someone to buy themselves a good job. It’s going very cheap. Lower Mainland roofing company: This is one of the most successful roofing companies in BC (likely in Canada). It does great volume and excellent margins. It makes well over $1,000,000 profit a year. It will sell for 3 to 4 times earnings. Interior of BC roofing company: This is a fairly average company and will sell for about 2 times annual earnings. I also have one other roofing company and a sheet metal company for sale, both Lower Mainland. The reasons I am sharing these stories with you are several. 1. Are you interested in any of them? 2. What are you doing to sell your business? 3. Would you like to get into business? If so what are you doing about it. 4. Many businesses are going to be sold within the next five years. This is likely going to be the growth industry of this decade. How will it impact you? Successful contractors focus on the right activities, execute them flawlessly and generate the outcomes they want. Outcomes Vs. Activities We need to distinguish between outcomes and activities. You can shoot the puck at the net (activity) the outcome is a goal, a miss or a save. The goalie’s outcome is to save. Yours is to score. The more often you shoot and the greater the skill you use (these are your activities) the greater are your chances of scoring and scoring often (these are your preferred outcomes). But you have to remember that the goalie is there to thwart your preferred outcomes (his outcome is measured in salves). There will always be obstacles in your way. Some, like a goalie, are easy to see; some are camouflaged. There always seems to be someone out there who has desired outcomes that are the direct opposite to yours. A sort of ying and yang, I guess. In business profit is an outcome. You can’t control the outcome but you can control the activities that will generate the outcome. Again with the right activities, well executed, your chances of generating good profit become greater. The “goalie/obstacle” is often your competitors, your employees, even your clients and strangely enough even yourself. These elements can hinder you from achieving your outcomes. Harness them correctly and they will help you achieve your outcomes. Make sure that all the people on your team are really on your team and committed to the company’s success. You can’t afford to let them make stupid mistakes and spend time in the penalty box. Remember, it is your fault when things go wrong. Don’t blame anyone else. Take responsibility; take control. So, for successful contractors, what are the right activities and what does “well executed” mean? And what’s a good profit (the outcome)? Let me start with the outcomes. Over the past 27 years I have done some 34 benchmark programs for construction associations in both Canada and the US. The majority have been for mechanical trades (Plumbing, HVAC, refrigeration and sheet metal) while others have been for general contractors, roofers and fireplace contractors. This has exposed me to some 1,300 sets of financial statements for contractors and to the owners of those firms. In addition, through my accounting and consulting practices I have had access to about the same amount again. I get to have discussions and reviews with most of the owners. Through my speaking work I get access to many more contractors. The benchmark programs show that 25%of trade contractors make more than 10% pre-tax profit (after normal owner/manage salaries). The top 25% average around 14% pre-tax profit. This is the outcome that you should be aiming for. Are you better than average? If so, you should be consistently making more than 5% pre-tax. If you are in the top 25% then you should be averaging a minimum of 10% pre-tax. What’s stopping you? Most contractors work in a fairly isolated environment. They don’t really know what their competitors are doing that is making them successful. We see the nice trucks, the fancy websites, the nice car the boss drives etc. etc. However, those are not real indicators of success. It is very difficult for a contractor to really know what is going on in his industry. If you are a Canadian HVAC contractor you should participate in the HRAI benchmark program that I am doing right now. Our close off date is July 12th. Email me and I will send you the relevant details. Find out what outcomes you should be aiming for, identify what is realistic within your industry segment. Then you can implement well executed activities to reach your outcomes. Contractors and suppliers to contractors tell me they want 2 things from their businesses: Make more money and have more fun. Virtually every business person can do that. What is holding us back is a combination of a lack of control and a lack of knowledge. There are three key points I would like to share with you today that I hope will provide you with the knowledge and thus give you the control you need. #1: Money and profit – Am I making as much money as I could? Most people go to extraordinary lengths to build ordinary businesses
#2: The Business Model - what do successful contractors do? Have you bought yourself a job or do you own a business? The successful contracting business is focused It can clearly identify the type of work in which it makes good money – 60% from one type of work. This is more critical in the early years. Once a business has been established it may develop a broader base of work. A new CHBA member should focus on one key area. Renovations between $X and $Y Bathroom and Kitchen renovations Design build renovations
Here’s a potentially embarrassing question:
#3: The leadership structure – What should I be doing? Do you own your business or does your business own you?
You can only manage what you can measure And one more thing.................................. What’s the difference between clever and wise? Your mission should you decide to accept it is to Make 10% pre-tax profit and have more fun CANADIAN HOME BUILDERS’ ASSOCIATION OF THE FRASER VALLEY Print PDF Format: 
I recently completed 26 years running my own business and as I reflected over those years I asked myself the question “was I a poor business person, an average one, a clever one or a wise one”? I haven’t answered the question yet. Even though my specialty has been helping trade and specialty contractors move up the scale both in terms of money and lifestyle I always have difficulty giving myself advice or benchmarking my own results. As I often say it’s not just about the money. In order to get a clearer answer to the question I have to reflect back on the contractors whose lives touched mine and see what were the traits that put them into one of those four categories – poor, average, clever, wise. I’ve named them all Joe:
HIRING AND KEEPING THE BEST 12/01/2010
The typical contractor today started his own business. It is his skill in starting a venture and getting it going that has brought him to his success today. But, what about the future? It takes a different set of skills to keep the business going, and to develop it into an organization. Unless you build an organization, you will never be able to sell the company, or have the company survive without your everyday presence. To build your organization, you should be spending your time:
People have too many options; it is up to us to make their lives simple, yet challenging and not give them cause to shop around. Putting effort and strategy into place from day one will pay dividends. Some of the key mistakes that I see time and time again are Profile: You can’t hire someone unless you know exactly what they will be doing and what type of person would best fit in. I know this may sound obvious but ask yourself the following questions and ensure that you have written answers to each:
Unless you have given four unqualified “yes” answers you don’t deserve to hire the best and you won’t. A really critical part of the process is getting a realistic reference. My recommendation is to go and see the former employer (if possible) to get a really good sense of your preferred candidate. If the candidate has not been great in the past he won’t be in the future either. The final question to ask the former employer is “would you hire this candidate again?” When you have the person on board you need to keep them on track and focused. Have key performance indicators that you are both agreed on and review and mentor this person at least on a monthly basis to ensure that they are adding value to you and that you are providing them with the opportunities that they require. What can you do with the information that you gleam form these projections? If you are getting too much work you need to marshal more forces or subcontract out more or better still put your prices up and secure less work at higher margins (it’s all about profit; not volume). The real strength to this process is that you, as a manager and leader, become more proactive instead of reactive. You will be handling potential problems before they even rear their ugly heads. Your team will function with greater efficiency and you will make lots more money. Reacting to all the stressors and spending most of your time putting out fires is not productive. An effective manager diverts problems rather than solves them. If you are constantly putting out fires then you can’t take time off. What would happen if you were to take three weeks off? Who’s going to do the job as well as you? Sit back, have your favourite beverage and sketch out what life would be like if you were in control of your business. You have the magic touch, you tell your team what their needs are going to be in one, two, three, four, five and even six months in advance. Their confidence in your leadership will soar. The amazing thing is that you can monitor these Key Performance Indicators from any beachside café with your Blackberry in just a few minutes each day. The big danger is that you might work yourself out of a job and then what would you do with all that free time? If you had started this process six months ago you would now have that lifestyle. If you don’t start it now then in six months time you will be still micro-managing and spending your days putting out fires. This may give you a false sense of importance. The emphasis is on the word false! MANAGING AND MEASURING 11/01/2010
You can only manage what you measure. If you are doing an activity where the outcome can’t be measured ask yourself the question “why am I wasting my time doing this”. If you can’t measure the outcome there is no way you can tell whether you are getting better or poorer results. Ask a golfer about his game. He can (and will) tell you about every stroke on every hole. Which club he used, how far and how straight he drove the ball and how many strokes under/over par he was. He will then go on (and on) telling you why he didn’t play as well as he did the last time out and what he’s going to do differently next time out. Every golfer knows that you have to keep the statistics or you won’t be able to compare how you are doing compared to your history and to the standards set by the course. By doing this the golfer knows what part of his game to focus on or get lessons in. You see it’s all about measuring and managing. But when I ask a contractor for the same information on his business he becomes very silent; not because he doesn’t want to tell me but because he doesn’t know. He hasn’t identified the Critical Success Factors (CSF) for his business or his Key Performance Indicators (KPI). Therefore he can’t be proactive in running the business. What are the factors that need to be monitored to ensure the business is successful? Having analyzed this question with many contractors we have come up with seven. (Maybe there are fewer or more for you)
Each of these factors represents outcomes you need. Each factor has several indicators that will tell you if you are going to meet your factor. For example: Cash flow: The Critical Success Factor might be – do not exceed the $100,000 bank overdraft limit. Sales: Annual contract sales $2 million; annual service work $1 million. Let’s work on contract sales for this example: Critical Success Factor - $2 million for the year ($167,000 per month) What are the Key Performance Indicators that will tell you in advance if you are likely to meet your Factor? The elements that you need to provide indicators for are:
From your history you should be able to set up indicators for each of the elements. For example, if you are getting 20% of the work you bid and you have $4 million dollars of bids outstanding then you can expect to get $800,000 of this work. As you set this system up and fine tune it you will improve your accuracy. The accuracy level for the first three months of a forecast will be higher than the second three. But I do believe the accuracy will be sufficient to help you improve your business game (you already know how to improve your golf game). One of the most difficult parts of the forecast is the timing of the work. Schedules do change all the time. But again, from your history you have a good idea of how timelines change. What can you do with the information that you gleam form these projections? If you are getting too much work you need to marshal more forces or subcontract out more or better still put your prices up and secure less work at higher margins (it’s all about profit; not volume). The real strength to this process is that you, as a manager and leader, become more proactive instead of reactive. You will be handling potential problems before they even rear their ugly heads. Your team will function with greater efficiency and you will make lots more money. Reacting to all the stressors and spending most of your time putting out fires is not productive. An effective manager diverts problems rather than solves them. If you are constantly putting out fires then you can’t take time off. What would happen if you were to take three weeks off? Who’s going to do the job as well as you? Sit back, have your favourite beverage and sketch out what life would be like if you were in control of your business. You have the magic touch, you tell your team what their needs are going to be in one, two, three, four, five and even six months in advance. Their confidence in your leadership will soar. The amazing thing is that you can monitor these Key Performance Indicators from any beachside café with your Blackberry in just a few minutes each day. The big danger is that you might work yourself out of a job and then what would you do with all that free time? If you had started this process six months ago you would now have that lifestyle. If you don’t start it now then in six months time you will be still micro-managing and spending your days putting out fires. This may give you a false sense of importance. The emphasis is on the word false! BECOME YOUR OWN BOSS WITHOUT QUITTING 10/01/2010
Be your own boss without quitting your day job. Does this sound good to you? Many of us feel unappreciated at work, and that we’re not getting the recognition and remuneration we deserve. We rely on our bosses to tell us how wonderful we are (which they usually don’t) and what a wonderful job we are doing (which they usually don’t). This is understandable, because most bosses are ordinary people with little training in management or human relations. They’re just not good at that kind of stuff. They spend their days and nights just trying to stay on top of things, so the majority will never find the time to work on being good bosses. This is why you have to take a leadership role. Don’t turn your back on your boss for his shortcomings, but rather help him overcome them. Help him understand the value you bring to the company. Make it easy for him to evaluate what a great employee you are. When you follow the approach below, you won’t need a boss to tell you how well you’re performing: you’ll already know. Becoming your own boss I lecture a degree program in Construction Technology at the British Columbia Institute of Technology (BCIT). I ask my students to do this exercise: There is a job opening for a project manager. It’s a great job and pays very well. Now, list 10 reasons why you should be hired. My students—each one thinking he/she is more special than the next—invariably give me different versions of the same answer. They tell me they are reliable and knowledgeable, have great people skills, strive for success, etc. After discussing these answers with the class, the students soon realize that what they thought set them apart from everyone else was, in fact, showing prospective employers just how much they were like everyone else. We should instead look at this situation from the employer’s perspective. What matters to him? He wants you to tell him things like:
Now, you’re probably saying to yourself, “That’s fine if I’m looking for another job, but it doesn’t help me at all with my current employer.” And yet it does. Basically, you have to figure out your job description for your current job and identify measurable outcomes. Discuss it with your boss: let him/her know these are the key performance indicators you’re going to be working on and ensure they match up with whatever he has in mind for you. Anything that comes your way that doesn’t impact these criteria should be delegated as fast as possible. Then, on a regular basis and with the facts on your side, you can show your boss you are meeting and beating the set targets. You can qualify the great job you are doing. This puts you in control: if your boss still doesn’t appear to appreciate you, then you can bet other employers will. Let’s get back to the project manager example: What are the critical success factors for a project manager?
Finish under budget Monitor each line item and do comparisons of budget to actual as often as possible. Manage the variances quickly and efficiently and you’ll prove what a great job you are doing. Finish on time Keep a proper job schedule using software like MS Project. This way, you’ll quickly know when a job has gone off track and be able to take corrective action to put it back on track. Work to the specified quality Know the standards and pass the inspections, and don’t work beyond the standards you are being paid for. Retain the client’s good will Keep the lines of communications open so that the client is happy. Make sure you provide a good audit trail for everything, especially claims for extras; you will only get paid for what you have documented. Take responsibility for your job The biggest waste of time for most of us involves doing things that are not our responsibility and focusing too much on trivial matters. The beauty of key performance indicators—against which you are being measured—is they liberate you from the mundane and force you to focus on the important elements of your work. Your productivity will improve. The time you spend on pre-planning will increase. Trivia will be delegated to juniors. This is not just for the self-employed: everyone should keep on top of key performance indicators and take responsibility for them. Don’t let an employer or anyone else be your guardian. Take control and be your own boss! | RON'S BLOGGet the latest tips to keep you focussed on making more money & having more fun!     ArchivesFebruary 2012 CategoriesAll | ||
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