We are lucky enough to work with some of the smartest people in the industry — and I love it because they, like everyone here, believes in sharing their expertise and knowledge to help everyone in the community succeed. One of my favorites is Tim Faller, president of Field Training Services. Tim is a master of production and the systems that make this department hum (as well as being a super nice guy!) As a consultant, Tim’s changed the profit picture for many remodelers by showing them how to shore up their internal processes and capture every bit of profit.
Tim’s allowed me to share the main article from his recent newsletter with you. It’s all about Job Cost Reports — one of the most important information sources you have. Too few remodelers use this tool effectively. Tim shows you how.
Everyone reading this understands how important it is to set and meet a budget for a job but many find it difficult to do. Half the battle is setting and selling an accurate budget for the job, the other half is getting everyone involved in meeting it. Here are some tips:
Use the estimate as the first Job Cost Report.
The estimate for the job should be evaluated as a job cost report looking for issues that may present themselves in the future. The person running the job should spend time before the job starts to evaluate and learn the estimate so that they can identify any potential errors or omissions. If any of these are found then they can be dealt with before the job starts. Most problem areas are either swept under the rug or not even found leading to ignorance during construction. But if a discussion of them is started early than a possible solution can be found. In other words, simply discussing them will lead to solutions whereas ignoring them will lead to financial loses.
Train non-managers to read the reports.
One very common mistake that business owners make is to ask a Lead Carpenter to use a job cost report but neglect to train them in how to use them. Every business owner has had a learning curve to learn the financial aspect of the business. This is true even though they have a heavy motivation to do so. It is unrealistic to expect someone that is in the business to work with their hands to pick up financial info without time, training, and patience.
The most important aspect of training is to get around the age old statement, “it is what it is.” This statement is usually uttered after an owner shows a Lead Carpenter a report stating that the job is over budget on framing! The meaning of the statement is “there is nothing we can do now”. By letting this stand an owner reinforces the belief that the reports are worthless and can be ignored. So what has to be done is for the Lead Carpenter and owner/manager to stop for a few minutes and identify the problem and find a solution. There is always a solution. It may be for a future job estimate or it may be recouping the money on another aspect of the job.
To learn more about Tim and how he helps his remodeling clients succeed, click here.
And if you’re getting ready to hire new employees as your workload increases, be sure to take the time to hire the best. Click here for to learn about our Candidate Matching Service.