Here you are 6 months into the year ...will your Construction Business reach the projections you predicted in December of 2014? If you are on track or above GREAT JOB!  If you are behind or not sure ask yourself WHY and then dig into the details and recommit to setting and reaching your goals in the next 6 months.

If you haven't noticed the remodeling market is heating up, especially in Massachusetts. Backlogs are strong with many contractors booking work for next spring. On the labor front I am getting peppered every week form clients to help them find Qualified Lead Carpenter candidates, Office Managers and Salespeople. (unfortunately the good ones seem to be busy working somewhere else!).

Is it time to raise your price and markup? (See blog post on markup)

The prevailing thought is when demand heats up we should raise our prices. The challenge we see with many Construction Business Owners is how much is fair and how much will the market bear? Another challenge; some CBO's are not sure of their numbers and have unreliable metrics in place so they do nothing and hope for the best.

Knowing your numbers increases your confidence when you deliver the fixed price.

I am always amazed at the confidence business owners produce when they know exactly where they need to be when giving a price. Knowledge applied is power. When  the consumer asks you to lower your price and you own your numbers because you figured them out you do not cave, you stay put and protect. It is well worth the effort to reach this level of confidence.

A current client told me he was willing to walk away on a kitchen/bath project last week when the homeowner told him to lower his price. He thanked them and said no. Then he started to pack up and walk away and they asked him "what is the next step". He told me now that he knows his true numbers he has confidence when he gives the fixed price. Before when not knowing, he often caved and worried did he just buy the job or did he leave money on the table.

If you are at or beyond capacity I am thinking now is the time to raise your price at least a few percentage points. Suppliers are increasing material prices, labor rates are going up and taxes are not going down! Start with 2 or 3 percent and if you keep getting work and you can get it done increase a few more percentage points. After all you are the one taking all the risk, dealing with demanding consumers so it is ok to earn a little more profit. 

In our upcoming Construction Business Owner Education Program in September we will go into these subjects and more to help and guide owners towards success.

For now at the 6 months mark of the year here are some business check up items to measure, assess and question.

• Run your profit and loss statement to date
• Assess when you will reach your break even point.
• How does your produced work stack up against your 2014 goal?
• How does your year to date sales match up with your 2014 prediction?
• How much work do you need to sell and produce to reach your yearly goal?
• How many leads have you created and are you closing at the budgeted closing percentage?
• Are you able to service your leads in a timely manner or are you losing out on great opportunity because you have too many other things to do?
• Are your overhead costs above or below your 2014 budget?
• Check your work backlog, are you producing fast enough to turn over the money to pay the bills in a timely manner?
• Are your projects coming in on budget? What is your slippage factor?
• Are you preparing for material price increases later in the year?
• Will you have enough money to cover your expenses, taxes and make your salary goal?
• Do you know exactly how much and when it is ok to pay yourself more?
• Have you assessed your operation and will you need to add personnel to handle the influx of more work?

Taking a day to check on your progress and current business situation can help you make adjustments that in the end may save you thousands of dollars and allow you to be ready for better opportunity as the year progresses. Many homeowners are itching to get projects underway now that summer is here, insurance claims are settling and kids are out of school. They are discovering that contractors are busy and many are not returning phone calls. These companies will lose out.

When consumers call you with your business in order you will take their call with confidence and be prepared to win their project.

PS; New Program for Construction Business Owners