The successful contractor

An introduction to construction variation claims. Video 6 Reasons for extension of time claims

18/9/2018

An introduction to construction variation claims for construction project managers
Video 6 - Reasons for extension of time claims.

Information in this video is from the author's books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.

How To Avoid The 10 Biggest Risks Facing Contractors

16/9/2018

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

In a previous post, we considered the 10 biggest construction risks facing contractors. However many of these risks can be avoided. In this post, I suggest ways that contractors can mitigate and avoid these risks.

Non-payment can be avoided by:
1. Contractors doing research on their prospective clients before pricing the project. This research could inform the contractor if the client has a history of not paying their contractors, or of disputing invoices and variation claims.
2. During the execution of the project continually updating the client of the expected final project cost. This includes timeously notifying clients of variation claims.
3. Always being aware of rumours or stories that could indicate the client may be in financial trouble.
4. Submitting invoices in a timely manner, ensuring that they are in the correct format and have all the required supporting documentation. Don’t give clients any reason to avoid paying invoices.
5. Immediately following up late payment with the client. In fact, better still remind the client ahead of when the payment is due that you are expecting payment.
6. Working with the client to minimise variations to the project. Variations invariably add to the project costs and they could result in the client exceeding their project budget and running out of money.
Avoid losing money on projects by:
1. Accurately pricing the project.
2. Minimising waste.
3. Maximising productivity.
4. Ensuring that all work is invoiced and that items which are different to what is in the project document are claimed as variations.
5. Making sure the project is completed on time, or even ahead of time. Any delays not of your making may be claimable as a variation.
6. Ensuring that the quality of all work and materials is acceptable and meets the specifications.
Improve cash flow on your projects by:
1. Submitting invoices on time and following up with the client to make sure that the payment will be received on time.
2. Immediately submitting variation claims when changes are noticed. The variation claims must have all the supporting documentation and back-up. Make every effort to get the client to agree on the claim as soon as possible. Extended legal battles and disputes delays payment which will negatively impact cash flow.
3. When pricing the project understand the payment terms and conditions. If possible try and get some of these terms and conditions altered to make them less onerous.
4. Check the project cash flow before submitting your price. If the cash flow will be negative you could consider not pricing the project, or looking at alternatives to improve the cash flow.
Finishing projects on time. To ensure the project is finished on time:
1. Check that the construction schedule is achievable and is correct, taking into account all restrictions on the project as well as the expected weather conditions.
2. Don’t price projects where the construction schedule is impossible.
3. Ensure that the project has the required resources and skills.
4. The project team must understand the schedule and work to it.
5. Regularly update progress against the construction schedule. When slippage occurs understand the reasons and immediately implement steps to prevent further slippage and to catch up the lost time.
Steps can be taken to negate some of the impacts of adverse weather on construction. This includes:
1. Designing the construction schedule so that tasks most impacted by poor weather happen when the weather should be at its best. This includes trying to close up buildings ahead of the onset of poor weather and avoiding executing earthmoving tasks in the rainy season.
2. Constructing earth berms and drains to prevent the ingress of stormwater into the work areas.
3. Being storm ready so that incomplete work and material deliveries can be quickly protected and tied down.
4. Possibly designing and scheduling work so that sections can be built in modules in protected areas or off-site.
5. Avoid projects that have to be constructed at the worst time of the year.
Safety. It is important that all project employees are committed to working safely and eliminating safety risks. Safety can be improved by:
1. Ensuring all employees have the required skills.
2. Keeping the work areas neat and tidy.
3. All project workers undergoing a proper project induction before starting work on the project so that they understand the project rules and hazards.
Good quality is achieved by:
1. Having workers with the right skills and training.
2. Buying materials from reputable suppliers and not basing decisions on price alone.
3. Putting in place continuous checking to eliminate errors.
4. Using subcontractors and suppliers who have the resources and skills to deliver the required quality.
5. Providing the right equipment.
6. Instilling pride amongst the project team to deliver a quality job.
7. Never sacrificing quality for speed or price.
Having the right resources for a project includes:
1. Continuously training so your team has the right skills.
2. Planning projects so there are sufficient resources with the right skills.
3. Not pricing projects when you don’t have the right resources and experience and when you’ll have difficulty finding them.
Good project management. ...Continue Reading...

This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
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To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
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An introduction to construction variation claims for construction project managers Video 5 - Types of claims

13/9/2018

An introduction to construction variation claims for construction project managers
Video 5 - Types of claims

Information in this video is from the author's books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.

10 Free Construction Company Marketing Ideas To Try

10/9/2018

When you’re on a tight budget, it’s hard to invest in marketing. That’s exactly why you want ways to get the word out about your construction business that don’t cost a ton. Can you effectively market your construction company without spending a bundle? Are there free strategies that truly work?
The good news is yes. So, wherever your construction business is financially, here are 10 no-cost ideas to help you promote your services to new clients!

Create a plan. Good marketing is all about strategy. And what’s great about strategizing is that it doesn’t cost a dime. So, start with your goal. Do you want to generate new leads? Get more requests for quotes? Book more business for the quarter? Whatever it is, identify a specific, tangible goal, and then brainstorm. Where does your target audience hang out? How do they make decisions? Where can you reach them? The more time you invest in researching this information, the better prepared you’ll be to make your (free) marketing effective. Construction companies have different clients, so what works for one company may not work for your clients. Understand your clients and market place.
Blog regularly. If you’re like most construction businesses, your prospects are online. As such, your website is a major marketing tool. How can you get more people to see it? One great, free way is blogging. You’ll have to invest time to churn out quality content on a regular basis for a blog, but if you do the writing, you won’t have to invest any cash. In exchange for your efforts, blogging can help you improve search engine rankings, traffic, online authority and more. Blogs can be construction tips, or they could be short updates of your projects and important milestones reached. Include photos - but do check to ensure that the photos don't show unsafe acts, an untidy site or poor quality work.
Do something newsworthy. Think about ways you can generate free publicity for your business without a financial investment. Can you provide free construction help to a local event in exchange for promotion? Would it be doable to host a workshop or seminar at your facility on an area of your expertise? Try to make a splash, then reach out to local journalists and media professionals about it. The key to getting coverage is being legitimately newsworthy. Consider when projects reach a special milestone or safety achievement. Of course you shouldn't have them too frequently because this will take away the impact.
Join a local professional organization. Do a little research into business organizations in your area that allow free membership. Join and get networking. Whether it’s the chamber of commerce or a new alliance, you can gain new visibility by participating.
Team with other businesses. Any time you can find other local businesses to partner with, it can be a powerful, effective marketing strategy. Perhaps you specialize in small-scale handyman jobs, but there’s another business that does roofing. By referring your customers to each other, you cross-promote and both reap the benefits — and it doesn’t cost anything.
Get active on social media. Invest the time to be active on social media and it can pay dividends over the long haul. The keys are being consistent, offering real value and finding a way to stand out. What kind of information and resources does your target audience want? What will help them or answer their questions? Make your content less about you and why you’re awesome, and more about your prospects and how you want to help them. Keep providing real value day after day, and people will notice.
Use a referral program. Current customers can be one of your most powerful marketing tools when they tell their friends about your work. Incentivize referrals by offering a reward for bringing in new business. Maybe you provide a free sample product or a bonus service. Perhaps you give the referred customer a discount, as well as a discount to the one who referred him or her. Find a way to make it worth people’s time to promote you, and you get free promotion.
Build an email list. If you aren’t already building an email list, you’re missing a golden opportunity for future marketing. Add an opt-in form on your site that tells prospects why they should sign up. Stay in touch with past clients. No matter how good your relationship was and the last project you executed for them there's no guarantee that they're going to remember your company in a year's time for their next project. So send out a short email, holiday greeting, or company update once a year.
Send a survey. Email your list of past/current customers and prospects a survey, asking for feedback. Doing so not only gives you free market research, but it also reminds your audience of your services.
Hold a contest. Prizes for a contest don’t have to be expensive. You could give away a couple free products or some complimentary services, for example. So, run a contest online that asks people to sign up for your newsletter, visit your site or complete another action that aligns with your goals.

While marketing your construction company with no money is a challenge, there’s actually more potential than you may realize. Try the ideas above to start spreading the word about your business! If you stay faithful to the process, you should start reaping results in no time.

Author bio: Shanna Mallon is a senior copywriter for Straight North, a top HVAC SEO firm in Chicago that also specializes in web development and other online marketing services. Shanna has been writing professionally online since 2007.

Title image courtesy of Shutterstock.

An introduction to construction variation claims for construction project managers Video 4 - Reasons claims are rejected

9/9/2018

An introduction to construction variation claims for construction project managers
Video 4 - Reasons variation claims are rejected.
Ensure your variation claims aren't rejected.

Information in this video is from the author's books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.

An introduction to construction variation claims for project managers - Video 3 – why construction project managers should be involved with variation claims

4/9/2018

An introduction to construction variation claims for project managers
Video 3 – why it’s important for construction project managers to be involved with formulating variation claims

Information in this video is from the author's books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.

The 10 Biggest Risks Facing Construction Contractors

3/9/2018

Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net

Projects have many different types of risks. In fact, all projects have some risk for contractors. But, understanding the risks could help you avoid, or reduce the amount of risk. Clients may have different risks to the contractor, and each stakeholder in the project faces different risks. Sometimes these risks are the same for a number of stakeholders – so for instance, if the project is slipping against the construction schedule this could negatively impact both the client and the contractor.

Unfortunately, many contractors fail to understand the project risks, or they choose to leap into a project despite the risks. Who would want to start building a bridge across a flood-prone river at the start of the rainy season, or work for a client that’s known to fight lengthy legal battles with their contractors? Indeed, contractors are often a very optimistic lot, always expecting the project to turn out well, even when it’s fraught with risks and probably destined to failure from the start. Then when the proverbial hits the fan, they console themselves by blaming everyone except themselves.

In this article, we will look at the biggest risks that contractors face and how to minimise or avoid them.

The 10 risks contractors should avoid or minimise:

Clients that don’t pay. Frequently contractors aren’t paid for work that they’ve completed – who wants to work for free? This often causes contractors to become bankrupt. Unfortunately, this also usually leaves shareholders, employees, suppliers, and subcontractors out of pocket. Of course, if the contractor hasn’t finished the project then the client could have an incomplete project. Reasons for non-payment by clients could include:
- The client is dishonest and doesn’t pay for work.
- The client has run out of money or even become bankrupt, so can’t pay.
- The project value has exceeded the client’s budget.
- The client disputes the contractor’s invoices.
Projects that lose money. This could cause the contractor to become financially stressed, impacting cash flow and resulting in late payments to subcontractors and suppliers. This negatively impacts the project, and in the worst case results in the contractor becoming bankrupt. Projects lose money because:
1. They priced the project badly, there were errors and omissions in the contractor’s price, or they failed to understand the full project scope.
2. Poor project management which leads to projects wasting money.
3. Projects being completed late which results in additional costs.
4. The contractor failing to claim for work that they’ve done. This includes not submitting variation claims that they are entitled to.
5. Poor quality work which has to be redone at additional cost.
Negative cash flow. Negative cash flow is the leading cause of contractors becoming bankrupt. Essentially the contractor doesn’t have money to pay their bills. Even profitable projects can be cash negative for large parts of the project. Causes of negative cash flow include:
1. Clients paying the contractor late.
2. Contractors failing to invoice for completed work.
3. The contract payment terms being such that the contractor receives payment several months after they’ve incurred the costs.
4. The project is completed late resulting in delays in releasing retainage money.
5. Numerous variation claims which take time to settle and agree, or which face lengthy disputes with the client.
Finishing projects late. Projects that are finished late tie up the contractor’s resources, inevitably negatively impacting other tasks and projects. They cost more in management and supervision time as well as incurring additional costs for project insurance, project offices, security, equipment, etc. Finishing a project late is bad for reputation. It could even lead to the imposition of penalties by the client. Reasons that projects are finished late include:
1. The construction schedule was incorrect, or it was badly prepared.
2. The project team doesn’t understand or follow the construction schedule.
3. The project is under-resourced.
4. The client delays the project.
5. Adverse weather events.
6. Poor project management.
7. Poor quality work which has to be redone.
Adverse weather. Adverse weather can delay the project. Invariably when adverse weather strikes the contractor incurs additional costs which could include; people and equipment standing and they still have to be paid, pumping of flooded areas, etc. Adverse weather can also damage completed work which has to be redone at additional cost and time. Adverse weather could include:
1. Extreme heat or cold which slows productivity.
2. Strong winds which prevent some work, like lifting with cranes. Wind could also damage completed work.
3. The rain which stops work, floods work areas and damages partly completed work.
4. Adverse weather could also disrupt the supply of materials to the project site, or impact offsite manufacturing facilities.
Safety. Poor safety harms reputation, it could lead to the project being shut down by the authorities and even monetary fines. Poor safety can result in poor worker morale. Accidents take management time to sort out and investigate. Accidents could result in key workers being injured, impacting the project progress and productivity of the rest of the team. Accidents lead to increased insurance premiums. Some clients will avoid working with contractors that have a poor safety record.
Poor quality. Poor quality costs money and time to rectify. It harms reputation. It keeps people back to fix, thus preventing them from moving onto other tasks and projects.
....Continue Reading....

This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
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To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
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An introduction to construction variation claims for construction project managers - part 2 - Why contractors don’t always claim their additional costs

30/8/2018

An introduction to construction variation claims for construction project managers
Video 2 - Why contractors don’t always claim their additional costs or extension of time they're entitled to claim

Information in this video is from the author's books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.

An introduction to construction variation claims for construction project managers - part 1 - why you should submit claims

28/8/2018

Video 1 - Why it's important that contractors lodge variation claims when they have incurred additional costs or been delayed for reasons beyond their control.

Information in this video is from the author's books: 'Construction Claims: A Short Guide for Contractors' and 'Successful Construction Project Management: The Practical Guide' and 'Building a Successful Construction Company: The Practical Guide'. All available from Amazon in paper or ebook.

Have You Ever Started A Construction Project That Looked So Good, Only To Find It Was A Rotten Project?

26/8/2018

Image courtesy of phasinphoto at FreeDigitalPhotos.net

I’m sure most of you at some stage have taken a bite from a nice big juicy apple or peach, only to find that the inside was rotten. Maybe it had a worm … or worse still, half a worm. You were taken in by the external appearance of the fruit and took a giant size bite in your eagerness to taste it. Maybe, sometimes you were just so hungry that you grabbed the fruit and bit into it without first checking the outside.

Of course, you are now left with a mouthful of rotten fruit and a half eaten piece of unpleasant fruit. What do you do with it? Where’s the nearest trash can? How can you get rid of that foul stuff in your mouth before you chuck it up, and where can you rinse your mouth to get rid of the bad taste? Sometimes it’s easy and you are in the kitchen, but often you are out with friends and it’s not so easy to deal with.

Unfortunately, the same happens with contractors and construction projects. Contractors are often beguiled by projects that seem so good, then they’re disappointed once they start the project to find that it’s not so great after all. Sometimes, contractors are just so desperate for the work that they grab the project without much thought, only to find that they’ve got a rotten project. They forget to first check the project, read the contract document, understand what’s required, and know the client. Frequently contractors are too busy to price projects properly, they assume things, guess prices and hope for the best.
Then, when things go wrong, the project turns rotten, contractors are left holding the rotten project with no easy way to get rid of it. Like the rotten fruit, a rotten project can leave an unpleasant taste lingering for a very long time.

How can we avoid rotten projects?
It’s important when pricing any project to understand:

The client. Does the client have money to pay for the project? Do they have a reputation for paying contractors on time and fairly, or do they pay late and hold money unfairly? Does the client have reasonable expectations that can be satisfied? (Some clients expect a luxury sedan with the budget for a small car.)
The client’s team. Does the client have a team that can deliver information on time? Can the team manage the project? Are they organized?
The contract documents. Some contract documents apportion risk unfairly, they are one-sided in the favor of the client. Are the documents clear and free of ambiguities? Are the terms and conditions of the contract reasonable?
The scope of the project. Sometimes contractors misunderstand the scope and don’t price all the work in the contract.
The project site conditions. What is the topography on the site (steeply sloping or flat), is the site accessible, what are the ground conditions like (rock or sandy), are there other contractors already on the project or going to be working there at the same time, how will the client’s activities and operations impact the construction works?
The project construction schedule. When will the client grant access and provide information? Is it possible to complete the work in the time allocated?
The weather conditions likely to be encountered during the project. How will the expected weather impact construction?
The available resources. Does your company have sufficient resources (people, financial and equipment) of the right quality to commit to the project? Will there be sufficient suitable resources such as materials and subcontractors available to complete the project?
The risks. Every construction project has some risk and contractors are expected to manage and control these risks. However, some projects have large risks which could be devastating for the project and the contractor should the risk eventuate. It is important to understand the type of risk, their quantum and the likelihood of them occurring. In some cases for particularly risky projects, it may be best to walk away from the project.
The project’s cash flow. How much you’ll be paid and when? Who has to be paid, how much and when? Poor cash flow has destroyed many contractors, even on profitable projects. If you don’t receive money on time to pay project debts the company could become bankrupt.
Your costs. Calculate the costs of managing the work, costs of all equipment materials and subcontractors and overheads. Don’t guess.
Other possible projects. Don’t just blindly pick the first project to price. Be selective and see which project best suits the company and which one you are most likely to win. When you are presented with a whole selection of fruit you are better able to be more selective, thus choosing one that’s the ripest, juiciest and least likely to be rotten.

Conclusion
….Continue Reading.....

This article was first published on the ClockShark website. To visit this website and continue reading the article click on the link above.
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To read more about the author’s books and find out where you can purchase them visit the pages on this website by clicking the links below:

'Construction Book reviews'
To read more about the author visit the page 'Paul Netscher'
Want to contact Paul Netscher please enter your details on 'Contacts'
Find out how Paul Netscher can help you

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The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.

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