The Role Of The Contracting Business Owner

By Jayme Broudy, Contractor’s Business School

Dear Jayme:
You say that I’m not supposed to handling day-to-day stuff around the office or on the jobsites, but if I didn’t do that, what would I do all day?
-Ray

Dear Ray:
Good question. If you’re letting Elmer run the backhoe, what’re you going to be doing?

Really managing a business means developing a set of skills that most contractors had no need to develop until they find themselves forced into a management position when the business hits a few hundred thousand or more - and no matter how outstanding your contracting skills are, they’re a world apart from the skills needed to run a company. It’s not a matter of intelligence or effort, the skills are just different. But they’re entirely learnable.

The stand-alone owner focuses on strategic things like revenue, overall operations, financial and manpower planning, performance tracking, productivity enhancement, and the marketing strategies that’ll keep you moving forward.

Your role shift will be like moving from the engine room of the ship to the bridge. Your job is to plot the course, steer the ship, and make sure the crew, systems, and equipment are ready to get you from point A to point B. You can always find a new crewman to handle the engine room properly, but the ship won’t get far without a captain. When you think of it that way, being the owner feels a lot more fun and a lot more important than answering a million small questions every day.

As the captain of your ship, your job is to define where you want your business to be in a year, or three, or ten. What’s the best way to get there? More residential work? Expand to commercial? Add locations? Acquire a competitor? Tonnage work or specialty stuff? Once you establish your targets, an owner decides what equipment, people, investments and systems will be needed to get there.

Another key role is watching to insure you’re making progress toward your destination. That means insuring that you have a complete understanding of how your business works (and many contractors fool themselves about this), making sure you have dead-accurate, up-to-the-minute data to compare to your targets, and a process for identifying deviations from target and taking corrective action. Think of this as your GPS system.

An owner is also constantly looking for new ways to improve productivity and profitability: new and better tools, smarter software, heavier training for employees, reducing turnover, understanding all the components of profit and expense. You can’t do any of these things seriously until you’ve off-loaded your day-to-day tasks, but you’ll no problem keeping busy.

As I said earlier, some of these tools aren’t in a contractor’s toolbox. So where do you get them?

Helping contractors build the standalone structure that lets them become real owner/managers, and teaching the skills that let them optimize their business’s results is, of course, what we do at CBS. But what’s important is that you start thinking like a captain instead of a crewman. Until you start looking at the horizon, knowing how to read a compass doesn’t matter.
Cheers!
Jayme

Jayme Broudy is the founder and principal of Contractor’s Business School® - a coaching, training and consulting firm specializing in helping contractors produce more profit in less time. Since 1993, Jayme has worked with hundreds of contractors in many specialty areas to build successful stand-alone businesses. Visit www.contractorsbusinessschool.com/assessment to complete a free Business Analysis, or call (800) 527-7545 to get the FREE CD "10 Key Strategies to Build a Business that Works."

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