Where's All The Money Gone!?, The Impact Of Inefficiency

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Have you ever made an omelette? And if so do you get all the ingredients out and start cooking? Or do you turn on the stove top, throw the pan down and go in search of the butter and eggs? When it comes to cooking up our masterpieces there are different ways of getting the job done. My wife pulls everything out and gets going. Once she’s done the food is awesome but it looks like a bomb went off in the kitchen! I, on the other hand, try to end up with everything being put away and even rinsed before I sit down to eat. I try to be efficient as I cook…

With our construction projects how we go about getting things done can make a big difference in how much money we end up with at the end of the day. If we’re organized, productive and efficient chances are we’ll have more money in the bank at the end of the day. If we’re not, then we won’t. Our margins will suffer. Like an omelette there are many parts to what we do. And many ways to do it. Doing things efficiently is a must. So let's break it down a bit…

The most efficient way to handle supplies and materials is to figure out what will be needed and then have it all delivered to the job site in one big batch. The opposite approach is to pick up just enough stuff to get you going and then make multiple trips to the supply house(s) as you go. I’ve done it both ways. With the first approach there is more time needed to plan out your material’s list. You then need to have the capital to fund the purchase. And after that you need to schedule delivery. All doable. For me I like to get a good sized batch of materials that I can carry in my van that will last multiple days as I begin a project. I do loose a little money in the additional time I need to spend making multiple deliveries but I don’t mind. I save time in not needing to figure up the full materials list and don’t need to provide the additional capital outlay. This issue really depends on the size and scope of your project. So you can calculate what approach works best for you.

How you handle or “stage” your supplies prior to and during project construction needs to be thought out. We need to get what we need when and where we need it. So thinking through the construction process to know when you will need the various parts of your project is a must. Heavy things especially can cause delays if their delivery and placement isn’t figured out. Other issues to consider are what can happen to your client’s hardscape, irrigation, or structures, as you bring in your supplies and equipment. We need to protect all surfaces and property of our clients. Having to repair or replace broken items can be very expensive and takes time. Not helping our efficiency.

This is a HUGE aspect of any business. Questions like how many people, how many hours, and how effective are our team members in their respective roles can and WILL massively affect our numbers. I’ve had as much as a dozen or more laborers on sand sculpture projects. I ordered them from a Manpower or Labor Finders type of adjacency. Those projects were for specific short time periods. A couple of days to a week or so. Trying to pick the best number of people was always a challenge. I even had 6 of my 12 man crew just bail out and leave when they discovered the work was going to be pretty hard or physical. But after many years I got a good idea of how many people to hire for my sand projects.

For rockwork, the most I ever had employed at once was 3. Work was good and I was trying to do as many jobs simultaneously as I could. The challenge is as you increase your workforce you obviously increase your payroll. This means you need to stay on top of receivables. At that point I was running 3 to 4 jobs at once. What I found was that unless I had good people, (folks who din’t need hand holding) having more people and more jobs going at once was very stressful. And even inefficient. I needed to fix or correct mistakes made by my guys. I also needed to spend more time directing job progress with clear outlines of tasks for each employee. That all took time. Then there’s the issue of training. Each new hire needs to learn what to do. How quick they learn depends on how effective you are as a teacher and how well they are at learning. I found some learned quickly and others not.

For staff they need to learn what to do and then once trained the hope is that they can work alone. This allows for duplication. They get set up on a job and are able to execute the project steps correctly and efficiently. This also assumes that they can be trusted to actually work in your absence. You also sometimes face the challenge of the ebb and flow of contract work. Trying to keep 3 jobs going long term isn’t always doable. At least that’s what i found. So when the work slowed I needed to let guys go. Which was never fun. This is all the normal process for all or most businesses and as a company grows it’s called “Scaling”.

At this point, I have chosen to have just 1 employee at a time with the occasional additional temp employees if work gets to crazy. I do try and provide 40 hours a week for my worker but this doesn’t always happen This is because I don’t try to work long hours like I did in the past. I enjoyed my work. But this began to fade when I spent too much time on the jobsites and trying to manage multiple projects at once. I eventually decided not to go beyond 1 job at a time. I could do more. I just found that I prefer simply focusing on one job at a time. Less push to need to take care of multiple employees and the associated costs. This also has to do with the nature of my business. Each job is one of a kind. And each job needs my creative direction. Trying to duplicate myself is somethings I’ve not been able to do very well. I also don’t want my projects to suffer because I need to hurry to get things done. I do, none the less, move the project along and try to be as productive as possible. The point with employees is if you can get a good balance of their output compared to their costs its all good. The trick is finding that balance which is the challenge whenever we are working with people.

This topic covers how you work to complete your finished project. And in this regard I think in terms of '“batches” and “multipliers”. Doing a particular project step in a batch or group saves time. For example, drilling out all of the epoxy holes for the rebar. Or cutting the rebar to a desired appropriate length for those same holes. In the creation of any item, building, or fake rock project there are steps. Breaking the steps down and then completing them in batches saves time. Sometimes it makes sense to build part of the items you will need prior to getting to the jobsite. This took the shape or multiple fake rock “bubbles” being fabricated in advance of a job starting. I even had a few guys building these bubbles in a production style which were then stockpiled and stored for future use. When a job got scheduled we would then load up my trailer with the prefabricated rock bubbles and simply lay them out once on site. Rebar was woven around and through them preparing the project for shotcrete day. This I call the “Multipliers” process.

The key is doing things in batches of effort. I always am asking myself is whatever step I’m on being done in the most efficient and smart way possible. Fortunately when working in construction the process often tells you when and where you can trim back time. Mixing a bigger batch of concrete as opposed to multiple smaller batches for example. Another example is a short order cook. If they’re good they can multitask with a vengeance. Keeping they’re job depends on them getting their job done in the fastest most efficient way. One last thought, if you are able to be efficient and effective in whatever job you do you will find that you will be rewarded with greater new job opportunities and/or promotions. Because people in positions of leadership generally recognize quality individuals when they see them…

So study your creative and constructive process. Look for unnecessary steps and inefficiencies. With a little common sense you will be able to save time and thus never end up asking yourself “where’s all the money going!?” You’ll know because it’ll be right in your pockets!

- Dave

Dave Henderson