Latest / The Mobilization Mindset / Episode 169 | The Q4 Playbook: What Contractors Should Do Now to Win 2027

Transcript

Episode 169 | The Q4 Playbook: What Contractors Should Do Now to Win 2027 · The Mobilization Mindset

• 0:00
  SPEAKER_00: Don't think that like whether you're winning or not right now has anything to do with the bigger picture world, such that when it changes, you're gonna all of a sudden start to win.
• 0:10
  SPEAKER_00: Like if you're finding ways to win, you're gonna win in every single year.
• 0:22
  SPEAKER_00: Welcome everybody to the next episode of Mobilization Mindset.
• 0:26
  SPEAKER_00: My name is Scott Pieper, CEO and founder of Mobilization Funding, and today we're gonna be talking about what you can do as a construction contractor in 2026 with three months left to go in the year to best prepare yourself for 2027.
• 0:40
  SPEAKER_00: Newsflash, it's not gonna be anything different than we said last year.
• 0:44
  SPEAKER_00: It might have a little tweak to it, and there certainly are some things going on in the economy, in the macroeconomic world that can impact you, your customers, the development of different projects, and where things are moving.
• 0:54
  SPEAKER_00: But at the end of the day, it all starts with you and what you can do inside your business.
• 0:59
  SPEAKER_00: If you like these topics, don't forget you can find all of our episodes at mobilizationfunding.com as well as our YouTube channel at mobilization funding.
• 1:08
  SPEAKER_00: But right now, Drew and I are gonna kick this off with what you can do in now to the end of the year to make you best prepared for January 1st, 2027.
• 1:18
  SPEAKER_00: And we are not gonna talk about health and fitness goals.
• 1:20
  SPEAKER_00: We're talking about business goals.
• 1:22
  SPEAKER_01: Yeah, I mean, uh I think the first thing is, I mean, effectively what you're asking, Scott, is like, how am I gonna win next year?
• 1:28
  SPEAKER_01: Yeah.
• 1:29
  SPEAKER_01: I think the first question you ask yourself is, are you winning right now?
• 1:33
  SPEAKER_01: If you're not winning right now, I think you lock yourself in a room with either yourself, depending on how large your company is or your few executives, and figure out why aren't we winning and what does winning really look like to us?
• 1:46
  SPEAKER_01: Do we want to work with different customers?
• 1:48
  SPEAKER_01: Do we want to work on different projects?
• 1:50
  SPEAKER_01: Who do you want to be?
• 1:52
  SPEAKER_01: I think a lot of business owners out there, in particular, honestly, just shooting you straight, in the construction industry, operate every single day and just like I've said on many other podcasts, gripping it and ripping it without intentionally thinking to yourself, how do we want to compete?
• 2:09
  SPEAKER_01: Who do we want to be, and what value do we bring to the market?
• 2:11
  SPEAKER_00: Yeah.
• 2:12
  SPEAKER_00: Don't think that like whether you're winning or not right now has anything to do with the bigger picture world, such that when it changes, you're gonna all of a sudden start to win.
• 2:23
  SPEAKER_00: Like if you're finding ways to win, you're gonna win in every single year.
• 2:28
  SPEAKER_00: There'll be years you have down years, there'll be projects you don't win at, but overall you could be making progress.
• 2:33
  SPEAKER_00: But I do agree with you, Drew, that it absolutely starts with who do you want to be?
• 2:40
  SPEAKER_00: What are you really good at?
• 2:42
  SPEAKER_00: What are you not really good at?
• 2:45
  SPEAKER_00: And ripping that band-aid off honestly, internally, without judgment, allow your entire team, especially your leadership team and yourself, just write it all down on a board.
• 2:57
  SPEAKER_00: Here's what we're really good at.
• 2:58
  SPEAKER_00: And then ask everyone do you guys agree?
• 3:00
  SPEAKER_00: Here's what I think we're really bad at and causes us issues and pain.
• 3:03
  SPEAKER_00: And do you guys all agree?
• 3:05
  SPEAKER_00: And peel that onion back so you can really live in a reality of what we're producing, what the numbers say, do you even have access to those numbers and data?
• 3:16
  SPEAKER_00: Because if you don't, that's the first place to start.
• 3:19
  SPEAKER_00: Get your numbers together, run your reports, get your KPIs, your key performance indicators, your project-level cash flows, your results of each project that bubble up to the results of your overall business and have them in real time.
• 3:34
  SPEAKER_00: If you're waiting to get quarterly financials and you don't know what happened yet through September, and the last thing you know is what happened through June, you're behind the best.
• 3:44
  SPEAKER_00: Yes.
• 3:45
  SPEAKER_01: Scott, I'm even gonna break it down, even simpler than you just broke it down.
• 3:49
  SPEAKER_01: Guys, whether you're winning or you're not winning, or however you define that in October, November, December of this year, business effectively is very simple.
• 4:01
  SPEAKER_01: It is a series of inputs that theoretically costs you less than what you receive for those, the output that you have, right?
• 4:11
  SPEAKER_01: It's like you're putting in less than you are receiving.
• 4:15
  SPEAKER_01: It is as simple as that.
• 4:16
  SPEAKER_01: So if you break it down like that and then go from that high-level basic comment and the most basic fundamental comments I see business owners break and forget about every single day.
• 4:30
  SPEAKER_00: Yeah.
• 4:30
  SPEAKER_00: No, you're right.
• 4:31
  SPEAKER_00: It's math.
• 4:32
  SPEAKER_00: It's very basic.
• 4:33
  SPEAKER_00: Your inputs are gonna equal your outputs.
• 4:36
  SPEAKER_00: To your point, if you're putting way more in and you're not getting enough out, then you're doing something wrong in your business sense.
• 4:43
  SPEAKER_00: And in this particular case, you got to find a way to put more into your customers, your employees, your team, your work systems and processes, all of that first so that it produces more for you.
• 5:00
  SPEAKER_00: And if it's not happening right now, the tactical way to go about doing this, and we do it here at mobilization funding, we call it shutdown, other people call it strategic planning, some people call it peeling back the onion, some people call it a meeting.
• 5:14
  SPEAKER_00: It doesn't really matter what you want to call it.
• 5:16
  SPEAKER_00: But at the end of the day, if you need to go person by person, department by department, and do a project level analysis as well as a company level analysis on where you want to be.
• 5:28
  SPEAKER_00: If you guys are all around chasing shiny new objects and that was a distraction from your bread and butter, and maybe your bread and butter work that you do made a lot of money, but your the two chine, the two shiny objects you chased that year in extra project or going out of town or doing something cost you all your profit.
• 5:47
  SPEAKER_00: Okay.
• 5:47
  SPEAKER_00: Ask yourself, do I want to do that again?
• 5:49
  SPEAKER_00: Will it produce fruit?
• 5:51
  SPEAKER_00: Should I have done that?
• 5:52
  SPEAKER_00: Would I be happier if I just did what I already did and made the money in that arena?
• 5:56
  SPEAKER_00: Can I replicate that?
• 5:57
  SPEAKER_00: How do I do more of that?
• 5:59
  SPEAKER_00: Analyze those things and go to all ask your customers.
• 6:03
  SPEAKER_00: Go to some of your customers and ask them, particularly ones that you might not work with before, and ask them to be honest with you.
• 6:10
  SPEAKER_00: Ask them two questions.
• 6:11
  SPEAKER_00: You know, one, would you ever work for me again?
• 6:16
  SPEAKER_00: And two, if you would or wouldn't, why not?
• 6:18
  SPEAKER_00: Yeah.
• 6:19
  SPEAKER_00: Yeah.
• 6:20
  SPEAKER_00: And and see what they say.
• 6:21
  SPEAKER_00: And then ask your employees the same thing.
• 6:23
  SPEAKER_01: I went out, I was with a customer, what, two or three weeks ago.
• 6:28
  SPEAKER_01: I spent a few hours with them.
• 6:29
  SPEAKER_01: We we talked business a little bit, but then I got into, I asked them, I said, like, how could we improve our service to you?
• 6:35
  SPEAKER_01: How could we improve our product for you?
• 6:37
  SPEAKER_01: How should we think be we be thinking about our business as it relates to growing, doing more business with businesses like yourself?
• 6:45
  SPEAKER_01: That conversation lasted an hour with one of our customers.
• 6:48
  SPEAKER_01: It was just data that I was receiving.
• 6:50
  SPEAKER_01: The amount of benefit that has yielded us over the last three weeks, I'm convinced that we've won new customers because he provided me a different perspective, which provided me a different mentality, which allowed me to talk to other types of prospects and customers a little bit differently than I was.
• 7:06
  SPEAKER_01: Yeah.
• 7:06
  SPEAKER_01: And that was our conversation.
• 7:09
  SPEAKER_00: Yeah.
• 7:09
  SPEAKER_00: And he gave you the confidence to lean into something that you knew was now validated.
• 7:14
  SPEAKER_00: It's validated from the most credible source possible.
• 7:16
  SPEAKER_00: Yeah.
• 7:17
  SPEAKER_00: And so, you know, look, if you're again, if you're thinking about 2027, there are things going on in the economy today.
• 7:25
  SPEAKER_00: Sure.
• 7:25
  SPEAKER_00: Um, one, we're we're gonna have an election here in November.
• 7:30
  SPEAKER_00: They have implications depending on what type of business you're in.
• 7:33
  SPEAKER_00: There's different regulations.
• 7:34
  SPEAKER_00: Look at your local, um, your local elections can impact your local business much more significantly than the national elections.
• 7:41
  SPEAKER_01: Nearly every single municipal election that's at least happening around here in Florida, and I'm sure this is transferable across the country, whether that be municipality, county, permitting is in some way, shape, or form involved in those discussions.
• 7:55
  SPEAKER_01: Absolutely.
• 7:56
  SPEAKER_01: Which has a profound impact on all of our viewers' businesses.
• 7:59
  SPEAKER_00: Yep.
• 7:59
  SPEAKER_00: And even if projects get off the ground but they take longer to do, do you have the backlog to fulfill that?
• 8:04
  SPEAKER_00: You know, what if your January 1st on your WIP report doesn't start till March 1st?
• 8:09
  SPEAKER_00: Do you have enough to make up for those two months?
• 8:11
  SPEAKER_00: Or are you just gonna have all of those costs in those first two months, but not enough of the actual profit?
• 8:17
  SPEAKER_01: If you're just getting smoked on your overhead because you don't have any revenue coming in till March, April, May due to your backlog being pushed out three months, how are you gonna plan for that when you start your projects?
• 8:28
  SPEAKER_00: Yeah.
• 8:28
  SPEAKER_00: And then on top of that, rates are increasing.
• 8:31
  SPEAKER_00: We've already had a rate increase.
• 8:33
  SPEAKER_00: We're gonna have another one.
• 8:34
  SPEAKER_00: Okay, maybe that doesn't impact you because maybe your line of credit goes up a half a point.
• 8:38
  SPEAKER_00: Okay, fine.
• 8:40
  SPEAKER_00: But half a point on the developer that you work for, he might not or she might not push out 10 projects next year that they might only push out five.
• 8:49
  SPEAKER_01: They might delay, they might have the capital to sit on the sidelines for another two to three months to see what the treasury does.
• 8:54
  SPEAKER_01: Yep.
• 8:55
  SPEAKER_01: Right?
• 8:55
  SPEAKER_01: Or I'm sorry, what the Fed does, right?
• 8:57
  SPEAKER_01: So, and I I can't, I can't reinforce the importance of also going back to the fundamentals, right?
• 9:04
  SPEAKER_01: So if you are doing, and it goes back to what you said, Scott, if you were doing something that works and you think to yourself, October 2026, I am winning, do that.
• 9:14
  SPEAKER_01: Do more of that.
• 9:15
  SPEAKER_01: Don't get cute with it.
• 9:16
  SPEAKER_01: Too many of these business owners get get cute and then and then also reinvest to their in their business above and beyond what their backlog requires.
• 9:24
  SPEAKER_01: That's right.
• 9:24
  SPEAKER_01: Right?
• 9:24
  SPEAKER_01: I mean, you've seen that a million times.
• 9:26
  SPEAKER_00: Yeah, and look, sales is gonna help you in so many ways.
• 9:32
  SPEAKER_00: You've got to sell your business and your product and who you are and your services.
• 9:37
  SPEAKER_00: You gotta generate more sales.
• 9:40
  SPEAKER_00: Absolutely.
• 9:41
  SPEAKER_00: And making sure that those sales align to what your goals are is exactly what we're talking about.
• 9:47
  SPEAKER_00: You don't want to go out there, sell more at a bigger discount just to get more sales, and next thing you know, you're just exacerbating a cost or a spend problem internally because you're selling these jobs at a margin that can't sustain your business.
• 10:01
  SPEAKER_00: That would be devastational.
• 10:02
  SPEAKER_01: I spoke to it, sorry, I'm in interrupt.
• 10:04
  SPEAKER_00: And then the last thing I was gonna say is you also need to look at are it are the sales you're generating by the people you're generating them with, i.e., one salesperson versus another, maybe one geographical location versus another, one customer set versus another, project type versus another.
• 10:23
  SPEAKER_00: Analyze those because not all sales are the same.
• 10:26
  SPEAKER_00: You've got to know where these sales are gonna come from and the projects they are and focus your attention and resources to those.
• 10:31
  SPEAKER_01: Yeah, and I'd even back up on the sales a little bit.
• 10:33
  SPEAKER_01: You know, you you have a lot of business development folks that work work in these sort of subs, even GCs, but subcontractor groups, right?
• 10:40
  SPEAKER_01: Well, a lot of folks, and I've seen this, we've talked to a company before recently, we were on a phone call with them and said, you know, how are you gonna get sales up?
• 10:47
  SPEAKER_01: Well, I'm hiring five BD guys.
• 10:49
  SPEAKER_01: I'm like, well, don't under don't underestimate two things.
• 10:52
  SPEAKER_01: Number one, how long the sales cycle is in your business.
• 10:57
  SPEAKER_01: If you have a number two, if you have a long sales cycle, don't under, don't overestimate the max capacity of one salesperson.
• 11:07
  SPEAKER_00: That's right.
• 11:08
  SPEAKER_01: Right.
• 11:08
  SPEAKER_01: So if you go out and hire four or five people, I can almost in the business development realm, I can almost guarantee you if you have a longer sales cycle, which is an assumption I'm making, longer sales cycle being two, three, four months, one or two people could probably do that.
• 11:23
  SPEAKER_00: Yeah.
• 11:23
  SPEAKER_01: Because you add those extra three, that's more overhead you have to you you have to take care of.
• 11:29
  SPEAKER_00: Yeah, and you might not be, maybe you need, maybe you need more salespeople, but you can't afford to hire them right now.
• 11:34
  SPEAKER_00: So what are you gonna do to make that happen?
• 11:37
  SPEAKER_00: Uh, or maybe you can only bring on one and bring it, come up with a plan.
• 11:42
  SPEAKER_00: I also think that how you go about executing your strategy is equally as important.
• 11:49
  SPEAKER_00: Meaning, what amount of time do you attach to that?
• 11:53
  SPEAKER_00: Yeah.
• 11:53
  SPEAKER_00: Is it it can't happen overnight?
• 11:55
  SPEAKER_00: Yes, it needs to happen faster.
• 11:57
  SPEAKER_00: Matter of fact, just today I said to everybody in a meeting, you guys aren't working fast enough.
• 12:01
  SPEAKER_00: You're not urgent enough, you take too long to do everything.
• 12:05
  SPEAKER_00: And and it's true, but it also doesn't mean you can go faster and miss and make mistakes.
• 12:11
  SPEAKER_00: So, what resources do you guys need to move faster but keep the same standard?
• 12:15
  SPEAKER_00: What technology do you need to make your to move faster but not lose the same standard?
• 12:22
  SPEAKER_00: And you gotta be honest with yourselves in the construction world, are you moving with the same quality and speed that you need to?
• 12:32
  SPEAKER_00: And do you have the right resources in place?
• 12:34
  SPEAKER_00: Or are you just dragging around resources that aren't producing results for you at all?
• 12:38
  SPEAKER_00: And do you need to retool?
• 12:40
  SPEAKER_00: And there's therefore maybe next year is a retooling year because you're thinking out to 28 and 29, and you have to rebuild or build a new foundation to get you where you want to be.
• 12:49
  SPEAKER_00: I mean, this goes back to 2027 planning, though.
• 12:52
  SPEAKER_01: You're talking about, and I 100% agree with you, but I'm gonna kind of play a little devil's advocate there.
• 12:56
  SPEAKER_01: You know, are we moving fast enough?
• 12:58
  SPEAKER_01: Are we moving effective enough?
• 12:59
  SPEAKER_01: Well, I know that there are business owners that are listening to us out there right now that have not defined a process.
• 13:06
  SPEAKER_01: Yeah.
• 13:06
  SPEAKER_01: They have not defined what success is, and every portion of a process needs to be measurable.
• 13:11
  SPEAKER_01: So if you haven't done that, you need to start and ask yourself, like we said in the very beginning of this podcast, is what does what does winning look like?
• 13:20
  SPEAKER_01: What is winning?
• 13:20
  SPEAKER_01: Define that and then outline the processes that need to be implemented that can be measurable in order to execute that because you hit the nail on the head earlier.
• 13:30
  SPEAKER_01: A perfect strategy on piece of paper is not even worth the paper it's written on.
• 13:33
  SPEAKER_01: Right.
• 13:34
  SPEAKER_01: I mean, that is a hundred percent the fact.
• 13:36
  SPEAKER_00: Yep.
• 13:36
  SPEAKER_00: Write it down.
• 13:37
  SPEAKER_00: Then can you execute that?
• 13:39
  SPEAKER_00: And where are the gaps?
• 13:40
  SPEAKER_01: Yeah.
• 13:40
  SPEAKER_00: And be honest with yourself.
• 13:42
  SPEAKER_01: Yeah.
• 13:43
  SPEAKER_01: Um, so I mean, in summary, guys, I think you you just you go with the fundamentals.
• 13:47
  SPEAKER_01: You define have have I been winning?
• 13:50
  SPEAKER_01: If not, that's okay.
• 13:52
  SPEAKER_01: A lot of businesses don't win 24-7, right?
• 13:55
  SPEAKER_01: But then outline those specific goals.
• 13:57
  SPEAKER_01: And it goes from like your revenue base.
• 13:59
  SPEAKER_01: Do I have the right customers?
• 14:01
  SPEAKER_01: What customers do I like?
• 14:02
  SPEAKER_01: What work do I like?
• 14:03
  SPEAKER_01: What are the risks associated with certain customers?
• 14:06
  SPEAKER_01: What customer bases do I want to get into?
• 14:07
  SPEAKER_01: Why do I want to get into those?
• 14:09
  SPEAKER_01: Can I effectively compete?
• 14:11
  SPEAKER_01: What are the barriers to entry into those customer bases, right?
• 14:14
  SPEAKER_01: And then move your way down sort of the ladder and like, do I have the suppliers to provide me that?
• 14:22
  SPEAKER_01: Do I have flexibility with my suppliers?
• 14:23
  SPEAKER_01: What are my payment terms?
• 14:25
  SPEAKER_01: All the way down to your SGNA.
• 14:27
  SPEAKER_01: I'm telling you, if your SGNA, and I see this a lot with the companies that we talk to, if your SGNA is equal to or more than your gross profit, this seems basic, but equal to or more than your gross profit as percentage of revenue, you will not be profitable.
• 14:45
  SPEAKER_01: Correct.
• 14:45
  SPEAKER_01: You've got to either do a lot more work with the same amount of overhead or cut your overhead to be much more appropriate.
• 14:54
  SPEAKER_00: Yep.
• 14:55
  SPEAKER_00: And the last thing I would leave everyone with is something I learned from a mentor of mine.
• 15:01
  SPEAKER_00: And it was it was one of the hardest things I ever had to hear, but it's true.
• 15:06
  SPEAKER_00: And here it is.
• 15:08
  SPEAKER_00: It's a hundred percent of your fault.
• 15:11
  SPEAKER_00: Because you either hired the people, trained the people, went after the customer, brought the customer on, hired the person that brought the customer on, allowed them to go to the customer without the training that they went to, and any other problem you want, you got to remember at some point when you bubble it up, it was something you did or something you didn't do.
• 15:35
  SPEAKER_01: There it is.
• 15:36
  SPEAKER_01: Now that might be a part of 2027 planning is accepting that reality.
• 15:41
  SPEAKER_00: Accept that reality because here's the beauty of accepting that reality.
• 15:44
  SPEAKER_00: You have a lot of control, then a lot more control than you thought you did.
• 15:47
  SPEAKER_00: And what I'm saying to you is the same thing they said to me is go back and peel back the onion of what you either did or didn't do to produce that outcome and fix it.
• 15:59
  SPEAKER_00: And as soon as you do that, it's incredibly empowering to go about it.
• 16:03
  SPEAKER_00: And you may have a lot of things to fix, and that's okay.
• 16:05
  SPEAKER_00: It might just take more time than you want.
• 16:07
  SPEAKER_00: We all want it to happen tomorrow.
• 16:08
  SPEAKER_00: Maybe it's going to take a year, maybe it'll take two years, but it'll get better a lot faster once you accept that reality.
• 16:15
  SPEAKER_01: And the faster and the more uh, I guess, uh honest with yourself you are, you start to realize, oh my gosh, this is all my responsibility.
• 16:26
  SPEAKER_01: Every single result is a result of some sort of decision or direction that I've created.
• 16:32
  SPEAKER_01: I feel like that could then allow you to look at your company holistically and get rid of everything that doesn't matter.
• 16:39
  SPEAKER_00: Right.
• 16:39
  SPEAKER_00: Because you're gonna be accountable to it in a moment.
• 16:41
  SPEAKER_01: How freeing is that?
• 16:42
  SPEAKER_00: Right.
• 16:42
  SPEAKER_00: And whether you're a leader or the owner, it doesn't matter.
• 16:45
  SPEAKER_00: Just take it from your department on down.
• 16:48
  SPEAKER_00: And then your peer next to you, did you help them?
• 16:51
  SPEAKER_00: Did you not help them?
• 16:52
  SPEAKER_00: What did you see?
• 16:52
  SPEAKER_00: What did you not see?
• 16:53
  SPEAKER_00: Did you pour it?
• 16:54
  SPEAKER_00: It's all the same.
• 16:54
  SPEAKER_01: By the way, we're doing this same exercise here at virtualization planning.
• 16:58
  SPEAKER_01: I just, our director of marketing and I uh yesterday literally did this same 2027 exercise and we evaluated line by line everything.
• 17:08
  SPEAKER_01: Is that good for the business?
• 17:10
  SPEAKER_01: Is that the best thing for the business?
• 17:12
  SPEAKER_01: Right.
• 17:12
  SPEAKER_01: Right?
• 17:13
  SPEAKER_01: And we added things, we cut things, we got rid of things that don't matter, we optimized.
• 17:17
  SPEAKER_01: That's what it is.
• 17:18
  SPEAKER_01: That's what planning is.
• 17:19
  SPEAKER_01: Yep.
• 17:20
  SPEAKER_01: Well, I hope that helps you guys.
• 17:22
  SPEAKER_01: Drew, you have any last comments?
• 17:24
  SPEAKER_01: I have so much to say right now, but I'll leave it for future podcasts.
• 17:27
  SPEAKER_01: All right, good.
• 17:27
  SPEAKER_01: I'm excited.
• 17:28
  SPEAKER_00: All right.
• 17:29
  SPEAKER_00: Everyone, I hope you had a uh great week.
• 17:32
  SPEAKER_00: I hope you have it even better next week.
• 17:34
  SPEAKER_00: I hope you enjoyed this podcast, this message.
• 17:37
  SPEAKER_00: If it gives you even just one inkling to do something different, then I'm gonna consider this a success.
• 17:43
  SPEAKER_00: In the meantime, don't forget to share the show, pass on the message, and more importantly, do something different for yourself if you do nothing else.
• 17:52
  SPEAKER_00: God bless you and have a great week.