Last week we spoke about a range of different topics. This week I did a few Instagram posts on a few different topics and had some interesting phone calls with new builders coming to me for advice around projects, etc.
- Tips to Motivate Your Team / Retaining Staff
- Concept Plans to Detailed Plans
- Knowledgeable Builder – Charge up to Fix Price
Motivating Your Team / Keeping Staff
This has to be a big one in the industry at the moment and has been for the last five years. The industry has been under so much pressure to complete so much work that a real labor shortage is here; every man and his dog can be booked out for years as a 1-2 man subcontractor team.
Here are a few small tips you could use to incentivize staff to stay with your current company:
- Incentivize Bonuses on Jobs: Offer bonuses for meeting or exceeding performance targets or for taking on additional responsibilities. For example, give them 50 hours to finish a job, and if they hit it inside those 50 hours, you will pay them for 60 hours. If you’ve priced the job at a higher amount of hours, say 70-80, then you don’t run the risk of going over, and the business still turns a profit.
- Company Culture: Create a positive and inclusive company culture that values employee contributions and makes them feel valued. Find out what each of your employees values and their hobbies are. It doesn’t have to be beers and a BBQ. What if one of your staff values fitness and healthy eating? Offer…
- Long-term Commitment: Let your staff know that your company is committed to their growth and development. Find out what they are passionate about and find a way to show your appreciation to support that. If you know they really want a shot at managing some subtrades or doing a job on their own, let them know hey, if you finish this job well with Gary by Friday, then you can run the next one on your own. Keep them motivated and looking forward to a challenge.
- Show Them Appreciation: Show your staff that you appreciate their hard work and contributions. Give them a random Friday off to go and enjoy their hobbies, a gift card, or a voucher to do something they enjoy during their time off. Try to offer as much flexibility in their life as possible, if they have kids, if they enjoy a sport. Let them finish at 3 pm on every second Wednesday to do their cultural activity, etc.
By implementing a few cultural changes, I think you will enjoy a lower turnover of staff, from a QS perspective [less money spent on advertising for jobs] and less time showing new employees the ropes.
Concept Plans to Detailed Breakdown
This week, I had a follow-up conversation with Mitchell McDonald who runs MJM Projects in Auckland regarding a project that we priced up last year at the concept design stage.
This is a massive step up in relation to the size of projects for his business, so having another set of eyes over the costings is helping him sleep a bit better at night!
The goal at that time was to provide an indication of costs to the client to help them plan for the project and gain bank funding. However, now that council plans are nearly due, we are updating the pricing for the project and have found that the cost is coming in $200k over budget with details being added and 6 months down the track also.
In light of this, we will be looking at ways to reduce costs, reduce scope, or make changes to the project to fit within the client’s budget. This may involve re-evaluating the materials and construction methods used or re-designing certain elements of the project to make them more cost-effective. We will have to reshuffle items around, look at changes, scope reducing, and do what we can to bring it on budget.
In Regards to Fees…
Additionally, we had charged an initial fee for the concept design phase of the project, but now we will be charging a Stage 2 of payments as we move on to the detailed breakdowns. Most projects get a price once they have just spent $30k on working drawings or $8k at the council and months and months of planning. They get the stamped plans 9 months later and find out they will be struggling for finance from the bank.
Spend a much smaller portion of the costs up front. Get your designer to do a concept set of plans [$3,000 – $5,000], send it for a QS report and get a %70 figure for the project costings. By breaking down the payments into stages, it also allows the client to budget more effectively and manage their finances throughout the project and help the builder move to a fix price contract with some insurance that it will run on budget.
If you are in ‘talks with a client’ about a project coming up and they are not signing up with you just yet, tell them hey we should get this project QS’d at the Concept stage so at least you have a %70 ballpark of what this project will cost.
Knowing Your Worth – As a Knowledgeable Builder
In a phone conversation with a potential new builder client, the topic of moving from a charge-up contract to a fixed-price contract was discussed.
The client well and truly knows they are saving a significant amount of money by having the builder work on a charge-up basis, as the contractor is incredibly fast and efficient.
However, the builder expressed a desire to move to a fixed-price contract to be rewarded more for their speed and knowledge.
Over the coming weeks, we will go through the plans and work towards presenting a labor-only contract for this job. FIXED PRICE. This contract would be presented to the client and would help the builder secure more funds for less work, which was seen as the ultimate goal for both parties.
Why work 60 hours to complete a task when you have the option to do it in 40 but still get paid for 60? No brainer. The client then, yes, is spending a bit more money but probably less stress on them, watching the builder’s hours, going over all their timesheets and invoices, trying to screw hours down.
We’ll look to a phone conversation to present this offer and outline the pros for both parties. The agreement will help the builder to be rewarded more for their hard work and knowledge while also helping the client to budget more accurately for the project. Everyone wins.
Call to Action – RECAP
I’m all about a referrals business, simply ask a friend to follow us on social media and send us a message saying they told you to follow. And we will offer a $250 kickback on your next RAPIDQS Price Estimation.
Myself and the 2 x QS’s here really appreciate feedback and we are always looking for ways to improve and or get better.
If the Newsletter is boring, exciting, and or informative, please let us know.