McCain - Why trade contractors fail and how to prevent it: a handbook of financial, operational, and marketing procedures to help trade contractors succeed

Dr. James McCain, 2011

Dr. James McCain has asserted his right under the Copyright, Designs and Patents Act 1988 to be identified as the author of this work.

All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior written permission of the publishers or author, except by a reviewer who may quote brief passages in a review.

ISBN: 978-1-84961-111-4

Published by: TheEbookSale Publishing

Limerick, Ireland

On the following pages you are going to read many practical, hands-on methods and procedures for improving every aspect of the trade contractors business operations. In several instances you will see company names such as ABC, Inc. or ABC Contracting. These are fictional companies designed to show you how the procedures described in this book work in a trade contractors business. Please keep in mind that these are representative methods and procedures for the typical trade contractor. But since the size and scope of trade contractors operations vary immensely, you will need to tailor the solutions shown for your specific company. If you have any questions about applying these methods and procedures, please do not hesitate to contact me via my email address (mccain97@aol.com) or through my website (bizdrsolution.com).

Thanks and best of luck,
Jim McCain

A fair question that trade contractors need to ask themselves is Do I run this business or does it run me? Unfortunately, too many times the business runs them.

It runs them because, while most trade contractors understand the technical aspects of their crafts inside out, many know little about the business side of their companies: marketing, project scheduling, cost control, handling customer demands, cash flow, collections, banking relationships and the innumerable other business methods and techniques that spell the difference between success and failure of a trade contractors enterprise.

According to BizMiner, of the 823,830 building (non-single-family), heavy/highway, and specialty trade contractors in business in 2000, 28.4percenthad failed by 2002. Every year, thousands of trade contractors, whether in business for two years or 20 years, face bankruptcy and business failure, leaving behind unfinished private and public construction projects.i

With the economy stalled and prices for parts and materials increasing, the importance of handling the business side of trade contracting assumes even greater significance. Shrinking profit margins put a strain on small businesses struggling just to stay alive. Under these dire circumstances, understanding how to control costs and stay on schedule producing high quality products and services is paramount.

Thats where I come in. For the 30 years Ive spent helping small businesses regain or strengthen profitability, I have come to recognize one pervasive truth: trade contractors dont focus on business fundamentals because theyre too involved with the technical nuts and bolts of their professions. They are so busy working in their business that they have no time to work on their business.

Trade contractors recognize problems, but many dont understand how or why the problems happened or how to fix them. Some run out of cash, some fall behind project schedules, some dont realize they have too many or too few workers before they run out of money or miss scheduled completion dates, some dont know how to account for expenditures. I could go on and on; the list of business-related problems is virtually endless.

Not that trade contractors are unique when it comes to business problems; they certainly arent. Even the largest commercial companies exhibit the same problems mentioned here. The difference is that the larger companies have the luxury of hiring specialists to fix business problems. Smaller businesses, most of them operating on shoestring budgets such as trade contractors, cant afford to employ full-time specialists in finance, accounting, inventory control, scheduling, quality, productivity, cost control, and the many other specialties that often spell the difference between success and failure of a commercial enterprise.

And quite often, forces beyond their control compound their problems. For example, a faltering economy, union demands, inflation, and parts and material shortages. All of these play a role and tend to exasperate the trade contractors struggle to keep his head above water.

While the bookstores are crammed full of business advice for small businesses such as trade contractors, more often than not theoreticians write them; theyre the worst possible advisors because they have no direct experience in working as trade contractors or servicing them. Trade contractors get impatient with such books that teach theory and those that contain endless lists of so-called sophisticated business methods and techniques that take a Philadelphia lawyer to interpret. Learning from such books is not their bag (nor mine). But a book that shows trade contractors how to repair deficient parts of their business, spoken in the language they understand, gets their attention. And thats the secret of my method and the focus of this book. I show trade contractors how to address problems and strengthen their companies and never throw academic lessons at them or inundate them with business theory. Indeed, Part One of this book describes the most common business problems vexing trade contractors (See Warning Signs That Your Trade Contracting Business Is in Trouble). Then, Parts Two through Parts Six reveal workable solutions in plain-spoken language.

For a list of the types of trade contractors and subcontractors Im referring to see the appendix of this book.

The following ad from my website says it all:

Are your business problems more complex? Do they require a deep background in functional business problem-solving? BUSINESS WORKS CEO Dr. Jim McCain, a 30-year veteran with over 450 satisfied business clients, provides general business consulting. Contact the Business Doctor today for a free two-hour business physical.

I help companies solve business problems. I specialize in working with small businesses, especially trade contractors (building, electrical, HVAC, plumbing, among others). A few of my accomplishments include:

Saved a carpentry and cabinet contractor $146,000 in its first year operating costs by reducing waste in man hours, inventory, and vehicle maintenance.

Increased revenue for an electrical contractor $80,000 by implementing an employee incentive program.

Prevented corporate bankruptcy for a $1.5 million laser saw company by applying financial controls and accurate job costing procedures.

Assisted a $10 million per year emergency power service provider with the implementation of sales reporting, labor burden calculations, job descriptions, incentive plans, and human resource procedures. The company later grew to just over $100 million in sales volume.

My website Business Works (http://www.bizdrsolution.com/) has proven to be an invaluable aid to small business owners and managers. From there, clients such as trade contractors have downloaded literally thousands of business manuals, employee manuals, business plan templates, employee evaluation forms, and a host of other important business documents tailored to their individual businesses.