Posted by Mark Paskell on Mon, Aug 31, 2009 @ 11:54 AM
As the summer comes to a close the winds of change are taking the residential construction industry by storm. The law of evolution is culling the dead wood and contractors who are resistant to change are being replaced by the Next Level Contractor. Contractors who embrace and adapt to the changes will survive and those who do not will perish. These new contractors are investing in business coaching, education, sales training, marketing and best practices while things are slow. They know that when things rebound this will insure their prospects of success.
Reports from industry experts Shawn McCadden and Mike Anschel (a must read for all contractors)
In his recent article about the contacting industry, industry expert Shawn McCadden talks about Darwin's studies, The Caveman and how the weak are replaced by the strong. The survival of the fittest is quickly removing contractors who are holding on to old ineffective ways of doing business. This article is a must read for all contractors who are serious about succeeding.
Here's the URL for Shawn's article: http://www.remodeling.hw.net/company-culture/even-a-caveman.aspx
Another construction industry expert Mike Anschel, speaks about the reality of increased regulation and competition. This article clearly describes the widely accepted belief that the time is here to revolutionize the residential contracting industry. It is time to remove the contractors who have failed to set up and run their businesses like a real business. The track record of unprofessionalized contractors gives the industry a black eye. Consumers are tired of an industry that fails to deliver. The industry has allowed a hodge podge of different level contractors to stay in business. Increased regulation from the government is starting to force contractors to obtain certifications and licenses as well as adopt sound business practices. Competition from other industries is creating companies that are run by business trained owners from corporate America.
Here's Michael's blog and article: http://www.remodeling.hw.net/blogs/postdetails.aspx?BlogId=manschelblog&PostId=88660
Please read both articles and post your thoughts.
How do you plan to revamp your business to insure that you are the strongest and the fittest?
mark the coach
Posted by Mark Paskell on Wed, Aug 19, 2009 @ 05:30 PM
Now that the recession is a year old, most business owners realize that former methods of doing business are producing poor results in this economy. The old ways of marketing, selling and running a business are giving way to new processes that require learning new business concepts. The new business training for today's contractors can help bridge the gap from old to new provided it includes implementation of the training into the business. In Webster's the definition of implementation is: "provide the power and authority necessary to accomplish or put into effect". Education and training without implementation is a complete waste of time and money. Failure to implement will lead to the same poor results. We all remember the definition of insanity: doing the same thing over and over again and expecting a different result".
Implementation through coaching
Coaching for contractors, from a coach who is experienced in the industry, that is delivered with the "hands on approach" insures that the investment in education is not squandered. This type of coaching usually includes on site assessments of all personnel and existing systems. Then the new processes are strategically put in place by modifying old processes and replacing those that no longer work. The new concepts need to be installed gradually so that they take root and don't overwhelm the company personnel. The desired outcome should yield processes that are owned and accepted by the entire team. To insure success the owner should instill accountability measures for him or herself as well as all employees. Frequent reinforcement of the training needs to accompany the implementation.
In the contracting industry, this is presenting unique challenges for the residential contractor. Many residential contractors come from the school of hard knocks with minimal business education. The younger contractors age 30-45 have a unique advantage over the 46-60 crowd with more relevant education in business and technology. Where as the many older contractors have a unique advantage in craftsmanship and street smarts.
The challenge the industry is facing is providing education to two diverse groups. The older group tends to show more stubbornness and reluctance to trust new ideas where the younger contractor is more open to the change that new business concepts presents.
In either case, the need for implemented education and training for both groups of residential contractors is essential to operate a successful contracting business and earn business from today's Next Level Consumer.
Recently we have talked to contractors who invested in education and training and they have not implemented that training into their business. They swear that they thought the education was all that was needed and that the implementation would miraculously occur. Unfortunately, osmosis, baptism by fire or assuming your employees will do it doesn't work.
Before you invest in education and training make sure that you also account and plan for the implementation into your business. Will you, the owner do it, or should you plan to bring in a contractor coach to protect your investment and hold you accountable for the results you desire?
mark the coach
helping today's contractor excel in a new economy
Posted by Mark Paskell on Fri, Aug 14, 2009 @ 03:36 PM
The rush is on to provide lead paint training and coaching for remodelers, contractors and the trades! The list of EPA certified trainers continues to grow. Some providers will travel to your location.
NARI is talking with several providers who are about to come on line with their EPA approvals. The Contractor Coaching Partnership will continue to post updates. Stay tuned for more information on this important rule.
Check out the current list to find a trainer near you.
http://www.epa.gov/lead/pubs/trainingproviders.htm
Once you obtain your lead paint certification how will you implement it into your business, teach your employees and subs, and educate the homeowner why it is necessary?
Once contractors receive their lead training then it will be important to set up protocols within the business to insure that the rules are followed. The cost of letting procedures fall through the cracks are too great to risk. We will talk more on how to implement this in a future post.
mark the coach
coaching contractors to excel in a new economy
Posted by Mark Paskell on Mon, Aug 10, 2009 @ 10:41 PM
In this youtube video the consumer is calling the shots attempting to broker unreasonable demands on the service provider.
http://www.vendorclientvideo.com/
Do you find yourself experiencing some of the same treatment?
How would you deal with it?
Would you cave or would you stand your ground and sell value?
How can we turn the tables on this situation?
Posted by Mark Paskell on Mon, Aug 10, 2009 @ 09:06 PM
I recently learned about a contractor who lost a suit from a homeowner who decided to stop paying for a completed project. It turns out the contractor did not receive several payments totaling over $40,000. He finished the job believing that the owner would eventually pay up. The contractor had never been sued in 15 years of business and has a good following in his community.
As it turns out the homeowner, who said they were happy for most of the project, sued the contractor and claimed that the work was not what they expected. The contractor returned the favor and sued to collect his balance.
An attorney reviewed the situation and found the contractor was not in compliance with the Mass Home Improvement Laws. There were so many contract violations that the court found in favor of the consumer and awarded them a sum significantly more than the balance. The contractor was advised to accept the decision due to the numerous violations. Ouch!!!
Unfortunately contractors often end up with the short side of the stick in these situations. Consumers are usually portrayed as the victim. Not to say that some contractors don't deserve it, but what about those contractors like you who do a great job? Are you sure your contracts and practices are in line with the contractor laws in your state?
In order to protect company, familiarize yourself with the laws governing contractors in your state. Your practices, contracts licensing and insurance should all be in line with the rules and regulations governing your industry. If by some chance you run into a knowledgeable consumer who doesn't want to pay at least you will have a leg to stand on provided you do your job well.
Some items to think about in Massachusetts;
http://www.mass.gov/legis/laws/mgl/gl-142a-toc.htm
1. Review the sample state contract on line at http://www.mass.gov/Eoca/docs/sampcont.pdf
2. Make sure you are registered properly with the right name, address, and city or town. Notify the state promptly if anything changes.
3. Use your registration number in ALL advertisements.
4. Make sure you have the required language, in the right size font on your contract, in the right places.
5. Provide every homeowner with a three day right of rescission.
6. Make sure all your sub-contractors are also registered per the law.
7. Have an attorney review your documents for compliance.
8. Don't charge more than 1/3 down except for special orders.
9. Study the law and know your responsibilities and rights.
10. Use the arbitration clause.
11. Educate the homeowner.
On insurance, make sure you properly protect yourself, your employees, your customer and also make sure you obtain insurance certificates from your subs. No comp on subs and you pay their workmen's comp. Refrain from the temptation to forgo workmen's compensation or misclassifying your workers to save on comp. Many contractors are audited and caught misclassifying their employees. Then they are whacked with a huge comp bill! Can your business afford that?
The professional contractor who follows the rules and knows how to explain this to the consumer, will stand out from those who don't and win jobs. Today's consumer is smart and wants the right professional to work on their most valuable investment. All you have to do is prove it. The cheaters are dead wood being expunged by the economic downturn. When the consumer returns, it will be you, the transparent professional contractor who is there to serve their needs.
mark the coach
Posted by Mark Paskell on Sat, Aug 08, 2009 @ 08:26 AM
Before you know it April 22, 2010 will be here and any contracting company who works on homes built prior to 1978 will be required to be a certified renovator under the EPA Lead Rule. This rule effects remodelers, painters, plumbers, electricians and any trade that may disturb 6 square feet of areas covered with lead paint. Currently there are not enough trainers certified by the EPA. It is estimated that there are 236,000 contractors who need to be trained by April 2010! And currently there are only 4 certified providers in the entire USA! Do you think it is possible that everyone will be trained in time? Stay tuned for more information on available training providers. Hopefully contractors will be able to get training in there local market in time to avoid the stiff penalties that the EPA can impose. Penalties stated in their rule are up to $32,500 per violation, per day.
I am attaching a post from the professional remodelers organization site on this subject. (http://remodelerscouncil.wordpress.com/2009/07/21/epa-releases-initial-list-of-lead-paint-trainers/)
The U.S. Environmental Protection Agency recently released its initial list of four EPA-accredited training organizations that will provide required training for remodelers and renovators under the EPA's Lead: Renovation, Repair and Painting rule governing the work of professional remodelers in homes where there is lead-based paint. (One of which is in Seattle YEAH!!)
The EPA is also reviewing additional applications for training providers that prepare remodelers for implementation of the rule and certification.
To view the current list, visit www.epa.gov/lead/pubs/trainingproviders.htm.
The rule, which will take effect on April 22, 2010, addresses remodeling and renovation projects disturbing more than six square feet of potentially contaminated painted surfaces for all residential and multifamily structures built prior to 1978 that are inhabited or frequented by pregnant women and children under the age of six.
When the rule takes effect, firms working in pre-1978 homes will need to be certified by the EPA and must follow specific work practices to prevent lead contamination. The fee for a firm's certification is $300.
Along with the firm certification, the rule specifies that, for work done in pre-1978 homes, an employee will also need to be certified as a certified renovator and be responsible for training other employees and oversee work practices and cleaning on the job.
The training will be conducted during an eight-hour class and include two hours of hands-on training.
The certification of a firm and a certified renovator will be valid for five years. A certified renovator will be required to take a four-hour refresher course to be recertified under the rule.
mark the coach
Posted by Mark Paskell on Tue, Aug 04, 2009 @ 08:22 PM
Should a contractor or entrepreneur market more or less in a tight economy when there are fewer fish in the pond?
Should they invest in education training and coaching while things are slow to get ready for the inevitable return of the economy?
The common thought among many business owners is to cut back on marketing and education in tight times. We have heard many contractors say things like "we will spend more on marketing when the phone starts ringing and we sell some jobs." Also we hear "we will invest in education, training and coaching once the money starts rolling in". These decisions usually mean the beginning of the end.
If you haven't noticed, the things we did a couple of years ago to produce leads and and win projects from customers don't work very well in this new economy. The dynamics and buying habits of the new consumer have changed. You also probably have observed a higher level of consumer sophistication that renders old antiquated processes useless.
On marketing; if you don't market yourself the consumer will think you are out of business. When things come back you will not be in a position to earn business, because your competition who is marketing now, will take your market share and will clean your clock. Now is the time to increase your marketing. A well placed marketing campaign will take a few months. So what are you waiting for?
On education; it amazes us how contractors think training on how to build things is sufficent for education. Contractors are generally pretty good at building things (that's why they started a remodeling or trade business). What is needed now is education, training and coaching on how to run a tip top business using systems and best practices. The new consumer is looking for an expert who provides value and a high level of professionalism. The next level contractor is up to date on new trends and technologies and is coached on how to communicate them to the consumer. The contractor is professionally sales trained and uses a consultative solution based sales system to meet the needs and wants of today's consumer. This approach differentiates the professional contracting company from the untrained contractor.
I know I just used a challenging phrase (sales training) that scares the crap out of most contractors and entrepreneurs. However, whether we like it or not, no business can survive in today's economy unless you or someone else in your business is professionally sales trained and knows how to sell your solutions. The day of the order taker is gone forever.
Invest in you
A prominent speaker, Earl Nightingale, said in his landmark album "The World's Strangest Secret": A man stood in front of the stove expecting heat without putting the wood in.
Earl said "if you expect to get heat from the stove you first have to put the wood in". We must invest and sow the seeds, nurture them and be ready for the harvest a few months down the road. Doing nothing will produce nothing!
With that said, if you want to have leads to sell, jobs to produce and revenue to run your business you need to start by investing money to properly market your business.
Then if you market your business, produce the leads and want to sell to the next level consumer, you need to have the training, education and coaching to line up with the expectation of the consumer.
A recession has a way of cleansing the market and removing the deadwood. We see some companies marketing themselves more than ever and they have work. Those who are waiting for the phone to ring are running out of money and time. Winter will be here very soon.
Solve your marketing and education dilemma, invest in your business and yourself today! Aren't you worth it?
mark the coach
Posted by Mark Paskell on Mon, Aug 03, 2009 @ 08:19 PM
The societal demand for green products and services is opening the doors to many new opportunities for the residential construction industry. Consumers are educating themselves in record numbers and more often than not, will have as much and sometimes more, up to date knowledge than contractors. Consumers are keenly aware and interested in the ROI of any green energy improvements and remodeling investments they will make on their home. They are profit buyers, who are demanding to know that improvements have value and pay back.
With that said, how can a contractor show that they have the technical expertise and training to win the confidence and trust of the consumer?
One way is to practice Performance Based Contracting. For example on an exterior improvement project with insulation, windows and siding, during the design process or before a project is installed, perform a building envelope test to determine energy loss. Then after work has been completed perform a second test to prove to the homeowner that the work substantially improved the energy performance of the home. With the use of blower door technology, infrared and other acceptable methods the contractor who uses these methods will stand out from those who don't.
General Contractors and remodelers can also use these methods for residential additions and whole house remodels.
When replacing a Heating or HVAC system ask your sub to provide Performance Base Testing as part of the project.
In the near future we will see that the carbon footprint of a house will be a critical factor in determining the selling price of the home. Buyers will ask the real estate broker what is the HERS rating of the home as a standard qualification requirement. Banks will figure out how to properly appraise them. In short, a home with a favorable carbon footprint will be more valuable than those without.
A new standard for rating the energy greenness of a home is sweeping the industry. It is called HERS or Home Energy Rating System. Consumers are catching on to this standard and are starting to ask if residential contracting work will insure a favorable HERS rating.
What better way to win the trust and confidence of your customer than to submit to a performance test to prove that your service is worth every penny they invest?
For more information on how to work with a companies who perform audits and HERS feel free to write me a note.
mark the coach