Latest / Contractor Business Builder Podcast / Every Type Of Construction Business Systems Explained in 15 Minutes

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Every Type Of Construction Business Systems Explained in 15 Minutes · Contractor Business Builder Podcast

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  There are six types of construction business systems,
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  and if you want to grow, you need to know the mall.
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  But first you need to understand that building systems is not
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  complicated. You not need a massive budget or
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  amazing technical skills. If you think you don't need to
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  build systems right now, you are wrong because you don't grow and
• 0:17
  then build systems. You build systems and that's how
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  you grow. Hi, I'm Derek.
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  I've helped construction companies generate over $30
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  million in total revenue and doubled the profits of eight
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  contractors. And in this video, I'll be
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  breaking down all the different types of construction business
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  systems, which types you need and how you can implement them.
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  Now, as far as marketing systems go, there are three main ones
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  that I'm going to touch on. So the first one is e-mail
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  marketing. e-mail marketing, just sending out a monthly
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  newsletter and having a few nurture emails after, you know,
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  new lead comes in super powerful, helps make sure those
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  referrals are nurtured and also new people that maybe weren't
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  referred, you're building trust with them.
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  Next one is physical marketing. There's other calls like real
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  world marketing. So this is having a rap or logo
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  on your vehicle. This is having signage at your
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  properties to make sure that everybody knows exactly who it
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  is and you're getting that free marketing when people are
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  driving by. The last one I'm going to
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  mention as far as the type of systems for marketing is content
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  marketing. And this is a very broad field,
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  but essentially you should be producing content as a company
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  weekly at the minimum. So posts, blogs, podcasts,
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  whatever it is some sort of content and then you can dissect
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  it. You can use, you know, a longer
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  video for short videos, but you need to be putting out content
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  that is relevant and insightful for your audience of clients.
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  Get a components of it as far as software and operating
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  procedures is having a good solid website.
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  Your website should function as your storefront online.
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  And then you want a good CRM system.
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  We have the rapid lead CRM that provides e-mail marketing,
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  social media marketing, your pipelines, your automations.
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  It's got a lot in there QR codes, whatever you need.
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  Just make sure that you have a CRM that's not your project
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  management software that it's specifically for marketing and
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  lead generation so you can keep track of everything that's going
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  on. And then the last thing as far
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  as marketing is your online advertising.
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  So Google and Meta ads should have accounts with both and
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  ideally be doing both types of advertising.
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  Google is great for people that have high intent.
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  Meta ads are more about the people that are maybe thinking
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  about it. But if you got a good nurture
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  sequence and the e-mail things set up that I mentioned, you can
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  get very cost effective Meta ads.
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  But just getting more leads isn't enough to grow a company.
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  You also need to get your sales in place and have a good sales
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  process. And that leads us on to type #2
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  of systems is your sales systems.
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  Our sales systems are more about process and some mindset and
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  different things like that, training and handling objections
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  more so than the software or technical aspect of it.
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  But this is what kind of makes their business.
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  Because even if you have good marketing, if your sales process
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  is weak, you're going to be spending too much time and money
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  in marketing and you're not going to be getting projects
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  into production. Now, training for sales is
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  important, whether that's yourself or a salesperson.
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  And then objection handling. So you should have a document
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  with the typical objections you get during a sales process.
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  Normally there's like a top five.
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  And it's not that you should have some scripted response for
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  every, you know, question or objection that a client brings
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  up, but you should have at least rehearsed and understand like
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  this is how I handle that the price is too high or I want to
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  go another contractor. I'm just not sure or you know,
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  whatever, right? So it's top of mind.
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  Now as far as the operating procedures in the process, you
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  want to have a good preconstruction process.
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  This preconstruction process should feel like conveyor belt
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  that takes a lead and just slowly moves them into a
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  construction sale. The first sale is a
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  preconstruction agreement. That is their goal when you have
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  a new lead is just to get them into a preconstruction agreement
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  and you need to provide a quick solution to the facts that your
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  client doesn't know what they're doing.
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  There's a lot of unknowns that they need to solve and you can
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  solve that through your preconstruction agreement.
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  So that way you can get paid to provide services to them.
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  All that kind of stuff needs to be a dialed in process.
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  So for the client it just feels like the next logical step.
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  So that's how you really get paid and your process for your
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  sales. Now as far as the technical
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  aspect of it, you should have a pipeline.
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  I like to have the sales pipeline in the project
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  management software. Typically the CRM system I
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  mentioned earlier will handle the lead Gen.
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  And then when someone's kind of ready to make that next step,
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  then that's when they go into project management software and
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  you've got your pipeline. So you can see, OK, we've got 10
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  people in preconstruction. That means we are going to be
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  pretty busy in a couple of months.
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  You know this is going to create a low so you can start to know
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  what you need to do before it becomes a problem.
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  Then you're gonna wanna move on to type #3 of systems, which is
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  your project management system. Project management systems are
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  one of the areas where I find most contractors already are
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  really strong at project management, but they don't know
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  how to create the system or standardize it.
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  So there's two main components as far as the system goes is
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  your project management software.
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  This involves like having your schedules, communications with
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  your workers, with your Subs, with your clients, and then to
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  help really dial in your project management is checklist.
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  The two big types of checklists is a quality control checklist.
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  So you should have quality control checklists for all of
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  the stages of a project. And then you should have your
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  standard project start and project closeout process
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  checklist. So before project starts, all
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  the selections done, do we have everybody scheduled as material
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  scheduled? Have we completed the final
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  budget? Do we have final sign offs?
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  Whatever it may be, What is that checklist to make sure
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  everything is 100% ready to go day one, you hit the ground and
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  you just run with it and you move into a project with
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  momentum and then the closeout checklist.
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  So this is how do we ensure that the closeout process is smooth.
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  Everybody's communicated with for deficiencies, whatever it
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  may be, but all of that should be contained in a checklist.
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  If you can handle those two things, your project management
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  system is already running very well.
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  The softwares and operating procedures that I recommend for
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  these systems that we help implement with our clients is
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  job thread. So I like using Bob tread good
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  solid system as well as build exact.
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  Either one of those are great. So that's more for residential
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  as well as like commercial. If you are more of a heavy
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  commercial civil contractor, larger builder, then look at jet
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  build or procore are typically two other softwares that are
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  going to be better suited for larger builders or more
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  commercial geared, you know, GCS.
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  Now as far as implementing these systems, if you're thinking
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  like, wow, like I've got some of this, but everything's still
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  mess and it's not nearly dialed in.
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  You want to go and step by step sequence, start at the top, do
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  one section at a time. Don't try to do everything at
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  once. It's just going to become a mess
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  and your team is going to realize that and they're not
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  going to want to use it. Now before we move into Type 4,
• 6:48
  if you want to grow your construction business by
• 6:50
  implementing modern systems, then click the first link in the
• 6:54
  description below to apply for our coaching programs.
• 6:57
  Almost all the contractors who have joined our coaching have
• 6:59
  doubled their revenue and increased their profit margins.
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  OK, moving on to Type 4. These are time saving systems
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  with two big ones that I'm going to break down into is
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  organization systems and automations.
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  Organization comes down to your Google Drive folder setup, the
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  way that you structure your Sops.
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  So all of these different systems, the more organized you
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  can get, the more standardized that makes sense to your
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  business, the faster your team can get things done, and the
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  more time and efficiency you're going to save across your
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  company. The second one is automations.
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  There are so many good automations that can save just
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  small amounts of time, 5 seconds here, 30 seconds there.
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  When you add them up, you can get hours back in your day
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  through automations as well as your team, which makes them more
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  efficient. As far as the software and the
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  operating procedures that I like to use and implement with my
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  clients, is Google Drive having your folders and files
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  structured? I like to have your shared
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  folder, so Google Workspace and then you've got your shared
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  drive with shared folders, marketing, clients, projects,
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  financials. So you've got maybe 5 to 6 top
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  line folders and then with each one subfolders within that and
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  then number your folders for the top line ones.
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  And then as far as automations go, I like to use Zapier, which
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  is an automation software. Zapier helps your different
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  programs talk to each other. If something happens, like your
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  new project is created in your project management software.
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  Now you can create folders in Google Drive through Zapier.
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  So there's a lot of automations that you probably do in your
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  admin team is doing that can all be automated, at least 80 to 90%
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  of it. And then there's just that final
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  human person. They're kind of double check and
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  keep things on track. There's so much stuff that can
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  be done with automations. Once you start setting up
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  filters and automations and triggers, your business just
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  kind of runs on autopilot in the background.
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  For a lot of the admin type of work.
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  No contractor is strong without solid operations.
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  A lot of contractors staying stressed, still firefighting,
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  hardly getting any time to themselves because they lack
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  proper operations. And that is type #5 of systems
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  is your operating systems. Operations can get confused with
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  production. Production to me as the project
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  management operations is like your internal communications,
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  your administration, your human resources, all of these types of
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  systems. So hiring is super important,
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  training as well as communications.
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  And those are the kind of the big systems and operating
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  procedures that you need. So hiring super critical, the
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  people you have on your team can make a huge difference.
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  And having a good hiring system ensures you're getting good
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  people that are the right fit. Training materials are the next
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  one. Once you hire them, you need to
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  train them and you need to train them effectively so they could
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  run your systems, they could operate the systems, they know
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  what's going on. Finally, communication systems.
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  So they're plugged into your business, they're here.
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  How do we communicate between them?
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  The Subs, the project manager, the coordinator, the site guys,
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  your admin staff? How do people know what's going
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  on and keep those lines of communication open?
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  I'm going to do a quick walk through of how you actually
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  build these systems to implement them.
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  The first thing with human resources is having an ideal
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  ploy for hiring. If you just throw out a hiring
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  ad, I need a project manager, you're going to be an effective
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  if you don't know who that person is, is just go to a
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  document and write down who is the best project manager I ever
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  hired. Once you have that, now it's
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  very easy to write a job ad to attract that person.
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  And that way you can then move on to the next one, which is
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  having job descriptions, roles and accountability.
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  So every role in the business should have a description.
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  There should be a list of responsibilities, key
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  performance indicators. What criteria do they need to
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  meet every day, every week, every month?
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  And then having a scorecard is critical because we need to be
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  checking what are the metrics here?
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  How often do we have upset clients?
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  How often are we actually meeting schedule?
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  How often are we actually on budget for projects?
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  That kind of information needs to get known and needs to be in
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  some sort of scorecard so everybody can see objectively
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  are we being effective? And then onboarding is the last
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  thing I'm going to mention as far as how to implement these
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  like hour operation systems is when an employee starts, that is
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  the critical time where you can really set the stage to have
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  like an employee handbook. So everybody coming into the
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  business doing work for the business knows specifically
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  everything that they need to know.
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  What is professional, how do they get paid?
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  If they have a problem, who do they talk to?
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  And they should be able to get onboarded with handbook and a
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  training schedule. This is, you know, the next 90
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  days what you're going to be doing and where we want you as
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  far as competency. So I've doubled the profit
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  margins of eight different contracting companies.
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  And the way I did this was through great financial systems,
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  right? So type number six financial
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  systems, you must be doing regular bookkeeping and have
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  your accounts structured in a specific way.
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  I'd be having invoices go out, getting payments on time, cash
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  flow and reporting and financial management, job costing of
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  projects. As far as the software and
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  operating procedures, I like to use QuickBooks.
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  Most of my clients are in QuickBooks 0 also is good and
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  works. I like those too.
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  There are others out there but at the end of the day, having
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  some good counting software that integrates with your other
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  software. So integration is very key.
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  It should integrate with your project management software so
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  that you can do proper job costing and you have information
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  going back and forth between jobs and financial expenses,
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  invoicing, all of those types of things.
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  The financial SOP, just like the project management SOP, one SOP
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  for running the finances of your company, how to do invoicing,
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  accounts receivable, accounts payable, reporting of
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  financials, job costing 1 document, one SOP for the
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  financial management of your company.
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  And then for implementation, invoicing from an estimate is
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  very key. So you already did the estimate,
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  you've already got the scope of work.
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  Your client should be seeing the exact same thing on their
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  invoice. So if you finished up the
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  foundation, they should be seeing the same line items, the
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  same amounts of money, whatever shows on the estimate that
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  they've been provided with, it should be showing on the
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  invoice. So it's very clear to them and
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  we're always tracking what specifically on the project is
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  completed, what have we invoiced for, what have we collected
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  money for, and everything is working In Sync.
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  Also, invoicing specifically ahead of time.
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  So make sure you're setting your contracts up in a way that
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  you're always being paid up front before work gets done on a
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  project. The other two things to
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  implement when it comes to financial systems is your bank
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  account allocations. So I like to run an allocation
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  of money that comes into the business.
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  So you will have income account. Your income account is any money
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  that comes into the business goes into one bank account and
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  then from that bank account gets allocated to about four
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  different other bank accounts. So there should be a profit
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  account. Typically about 5% goes to
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  profit. Then you should have owners draw
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  account or directors account. So maybe 1020% whatever it may
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  be for your business goes into the owners account that gets
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  distributed to the directors or you as the owner.
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  Then you got your operating expenses. 60 to 75% of money
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  coming into your business is gonna go towards operations.
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  Any expenses the business get from there, payroll, materials,
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  Subs, whatever. And then the final bank account
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  is your taxes, bank account. Do yourself a favor, get a tax
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  bank account and of all the money that comes in, put about
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  whatever works for your business, you've got to figure
• 14:06
  out your own taxes. Like as far as an allocation of
• 14:08
  revenue, typically 5 to 10% somewhere in there will go to
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  your tax count, stress free financial management just by
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  allocating money properly and bank accounts.
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  And the final thing I'll touch on for the financial systems is
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  your accounts receivable process.
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  If you go to your accounting software and you look at all the
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  past due invoices, anything over 30 days needs to be high
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  priority. We need to get paid for that.
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  The longer you let something slide, the more people are just
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  not in a mood to pay it. And typically people's financial
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  situations don't get better after 30 days, they get worse.
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  So if they haven't paid you and it's already quite far past the
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  due date, make sure you're calling them, following up with
• 14:44
  them, telling them, hey, if you can't pay everything now, let's
• 14:47
  make it up payment plan. You know, X whatever, 5010
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  thousand per week or 50,000 per week, whatever.
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  And you should be there to work with them to help them get
• 14:56
  caught up, But don't let their problems become your problem.
• 14:59
  If you want to grow your business by building systems and
• 15:02
  click the link in the description to apply to work
• 15:04
  with us, where we will build out all the systems in your business
• 15:07
  done for you. And if you want to learn how
• 15:09
  skilled a construction company beyond 5 million, then watch
• 15:12
  this next video.