Construction Equipment Owner

My last blog entry dealt with Timothy Ferriss’s book, The 4-hour Workweek, and this entry builds on that (and on a comment from Nick Howell, T&N Asphalt Services). Delegating responsibility can certainly free up some of your time, and related to that, I think, is the impact subcontracting (Ferriss refers to “outsourcing”) can have on your business. By tying your company to reputable contractors who perform work you don’t perform, you can become more important to your customers and can solve more of their problems. You can not only sealcoat but pave; not only pave but stripe – and you can do it without buying a piece of equipment, or hiring or training new people. If you select the right company to work with – a company that is reliable and that does good work – there’s almost no risk for you. That’s the typical approach to subcontracting.

But another approach, an approach contractors often don’t think about, is to subcontract out some of your business management services. You probably already “subcontract” some of them if you have an accountant or an attorney, but many contractors have had success working with employee leasing companies. These operations offer a variety of services, from simply handling your payroll to advertising, screening, and hiring employees – all skills that are essential but can take up a lot of your time.

While Ferriss’s book is a bit much to me, it did make me think. If there’s a business or management book that’s made an impact on your business I hope you’ll share it and your insights with the readers of my blog.

The second day of the 2007 Trimble Dimensions conference featured a well-attended session that featured a panel of five contractors who had recently implemented grade control technology or been running it for several years. The panel fielded questions from the audience as to their experiences and shared some insights they had learned along the away. Below are some of the general commments offered to the questions that were brought up.

How was employee retention affected with the implementation of grade control?
None of the panel members lost operators. One was actually able to give his operators raises because of the increase in productivity - and more money is always a help with keeping employees happy.

What type of training programs were set up for the operators?
The main type of training that was provided was  done on the field. Either a product representative/dealer came out to inform everyone on how the technology worked or the contractor conducted the field training. One panel member said that he thought the key was to progressively introduce new features. Teach the operator the basics and once he has had a chance to work with those, teach additional features.

What was the length of time it took to adjust to using the grade control technology?
All of the panelists agreed it took a couple of weeks for their operators to become comfortable with the new setup. One contractor noted that one of the biggest hurdles an operator had was becoming comfortable pushing the buttons. They felt like they would break something and had to learn they couldn’t do harm by engaging the in-cab monitors.

What was the productivity increase that was realized after adding the grade control technology?
All of the panelists said that they saw a 20%-30% increase after they added these systems.

The discussion was appropriately wrapped up with the sarcastic final thoughts of the panel saying that their advice to anyone that competes in their market was to not invest in this technology so they could keep their competitive advantage.

OK, who could pass up a book titled The 4-Hour Workweek? Well, if you’re one of the thousands who, like me, took a shot at it (putting it on the New York Times Best Seller List for several months), shame on us. We should know better, especially in an industry that demands long days and hard, physical labor over anywhere from six to 12 months depending on the region you work in.

Of course, the title does pull you in. Who wouldn’t want to work just 4 hours a week? Of course the real key to working four hours a week is to work 4 but still get paid for the other 36 or 40 or 50 (stop me when I get close) hours many contractors put in regularly. The 4-hours-a-week work plan might be plausible in some other industries (though I doubt it) but it certainly doesn’t apply to the paving and pavement maintenance industry, even at its higher management levels. This industry requires continual involvement, especially in the smaller companies where an owner wears many hats (and all you many-hat wearers tip your hats).

But while this book isn’t worth your time – author Timothy Ferriss spends a great many pages writing about all the things he’s done and the places he’s been because he was able to work only four hours a week – it does contain a nugget that is probably worth all the panning to find. And that nugget is this (I’ve saved you all the panning): delegate and consider subcontracting. No, he doesn’t put it in those terms, but he does suggest outsourcing just about any work you can to free up your time. Fair enough. Extend that a little bit and take some liberties with his narrative and you get delegate and subcontract.

Contractors, especially contractors who own their own smallish business, have a tendency to wrap their hands and arms around just about every job that needs to get done and it can take near disasters, perpetual prodding, Brad Humphrey seminars at National Pavement Expo, and more to get them to loosen their grip. But loosen they must, and then delegate they can, freeing themselves up to spend more time in blue sky mining or on other areas of the business that might need their attention.

In today’s competitive construction market, where customers are demanding high quality and contractors are struggling to balance tight profit margins and a lack of qualified labor, the magic equation for keeping a business successful is increased productivity with the same amount or less labor. When contractors can figure out how to do this, they’ll see their job costs decrease and their profits rise. This week I had an inside look at how many contractors across the construction industry are finding results in this equation when I attended the Trimble Dimensions conference in Las Vegas. I enjoyed several seminars explaining how technology can improve jobsite productivity, and I want to share some of the ideas I learned in a seminar presented by Tim Gordon and Tim Carr of Custom Concrete out of Indiana.

Custom Concrete uses a robotic total station and Trimble’s LM80 layout manager. Tim Carr says with this setup they can tackle the most intricate and complicated of projects. “If it can be drawn, we can lay it out,” he says. Other benefits Custom Concrete has seen with this system:

• Fewer people on the layout job, increasing competition and shrinking margins
• Minimize human error on transfer of data
• Allows them to check accuracy of plans provided by GC or surveyor
• Ability to take on complicated projects the competition doesn’t want to take on
• Allows them to work in conjunction with surveyors
• Allows them to place points they need that a surveyor might not generally supply

Tell me about your success stories in integrating technology into your company to increase productivity by commenting to this post.

I’ve spent the past two days attending the 2007 Trimble Dimensions conference. During the course of the eight classes I attended, and the conversations I had over drinks and meals I came away with a lot of good information and wanted to share some of those insights with you over the next few blog posts.

The first major impression that was made occurred during Monday’s Keynote Presentation. Daniel Burrus, author of “Technotrends” discussed insights into the present and future opportunities made possible by rapid advances in technology. A lot of what he had to say about future trends and emerging technology was interesting, but the one thing that stood out to me was a practice he - and now I - believe should be applied to your business. That is taking the time as an owner to plan for the future.

Burrus challenged the audience to take an hour each week to make a list of the certainties that will affect your business. The issues on the horizon that will become reality and not what may or might happen. This could be employee shortages, rising material prices or anything else you know your business must address. With this list you can begin to plan and prepare to meet and beat these hurdles before they become an immediate deterrence to the growth of your business.

An hour is a significant time to take away from your daily routine, but it is something that must be done. Burrus points out we’re all busy, but if you take a step back and look, many of the reasons we are busy and have our time filled with dealing with today’s problems is that there was a lack of anticipating and planning for the future. We are now treading  water instead of moving towards the goals of your business.

So in the words of Burrus “Take the time to plan. Sometimes you need to put down one dollar to pick up five.” If this situation seems to be describing your business, take the challenge of planning for your business’ future. By identifying the certainties that your business will need to address you will be able to greak free of today’s problems and start building for the future.

It must be autumn as we’ve started to get our annual run of phone calls from property managers and contractors who want to know if they can still sealcoat pavement. Property managers want to know if it can still be done in the fall; contractors want to know what the temperature specs are for sealing in cold weather.

Here’s what we tell them. First, the rule of thumb is that the temperature should be 50°F and rising…and rising is the key. If it’s 50°F and falling or if it peaks at 50°F and you apply sealer you are opening the door to a variety of problems that could affect the life or effectiveness of the sealcoat. The second thing we say (to property managers) is to rely on their contractor. The second thing we say to contractors is to rely on their sealer supplier. The supplier knows his material the best and can give the best guidance on what your concerns should be. The third thing we suggest, if there is concern about applying sealer, is to play it safe and try to schedule the work for spring. This isn’t always possible, but it can help avoid problems and should at least be considered as an option.

It’s always tempting, and sometimes it’s even necessary, to get those last few jobs done. By extending your season you’re obviously generating more income and driving more dollars to your bottom line. But if you add those profits at the expense of a customer, or if you push the envelope just a little too much and have to go back to redo the job next spring, what have you really accomplished? So property managers, rely on your contractors; contractors, rely on your suppliers. It’s in everyone’s best interest to make the right sealcoating decision.

The Associated General Contractors of America is holding what looks to be a great audio conference that contractors should seriously consider attending - “Know the State Laws that Impact Your Construction Contracts.”

It is hard keeping up with the laws in just one state and having to keep up with laws if your company crosses state lines can be a daunting task. As contractors continue to grow their businesses, expansion is taking them beyond their own state and by crossing those powerful state lines can have a significant impact on project to project.

Participants in this audio conference will gain

• insight into the topics to investigate when considering any new project,
• techniques to facilitate that process, and
• actual samples of some resources available to help, including
  • summaries on laws that relate to competitive bids, specific contract provisions, immigration, etc.
  • checklists, of topics and issues to address, that assist you in meeting local laws, and
  • a sample summary of current state laws from the AGC State Law Matrix

For more information on this conference visit www.agc.org/StateLaws. The conference is set to begin at 2 p.m. eastern (1 p.m. CST) on November 13.

The panel will consist of Thomas J. Kelleher, Jr. Attorney, Senior Partner Smith, Currie & Hancock LLP; Phil Beck, Attorney, Partner Smith, Currie & Hancock LLP; and Jim Bidgood, Attorney, Partner, Smith, Currie & Hancock LLP.