Bigger Size Does Not Equal Bigger Profits

According to Nicholas Bloom’s Harvard Business Review article, “Corporations in the Age of Inequality,” a slim percentage of top-earning companies actually earn significantly more profit than their rivals in what’s been deemed the “winner-takes-most” economy. As leading companies earn more, there is less profit remaining for lagging companies, only widening the gap.

So, what does the construction industry in particular look like? In research between the Construction Financial Management Association (CFMA) and Coltivar Group, a representative sample of 363 industrial and nonresidential U.S. construction companies ranging from $1 million to over $1 billion in revenue were studied. Profitability and return on investment were used as an objective lens to compare the companies.

While 50% of companies had a competitive advantage, defined as the ability to earn above-industry-average economic profits, the calculation revealed that companies in the top 20% earn nearly 83% of all economic profit, fulfilling the Pareto principle, or the 80/20 rule. The remaining 80% of companies are confined to the dog-eat-dog environment of the lower deciles, where they contend for leftover scraps of industry profit.

How did these successful contractors achieve the initial success to advance up the curve?

Spotlight on Mental Health

A recent study conducted by BRANZ has shed light on mental health issues within the construction industry, offering some important insights to help tackle the issue 

At 6.9%, the proportion of suicides in the New Zealand construction industry stands as the highest across all other sector in the country.

Despite a mixed reaction from interviewees being surprised or not surprised at the rate of suicides, nearly all were unaware that the construction sector had the highest percentage of all industries.

What’s fuelling the numbers?

Secure What is Owed To You

Want to rank with the banks when standing in line to collect payment from a debtor who has gone into liquidation? The PPSR may help you.

The Personal Property Securities Register (PPSR) is the register where security interests over personal property may be registered and can be searched.

The PPSR was created as a result of the Personal Property Securities Act 1999 coming into force on 1 May 2002 and it replaced a number of existing registers including the Chattels Register, Motor Vehicle Securities Register, and the Register of Company Charges. 

Why use the PPSR?
Registering your security interest on the PPSR may give you a better chance of recovering a debt if your debtor defaults, at least in the commercial space.

Do You Know Your Numbers?

Imagine you are flying over the Pacific Ocean on an airliner and the captain comes on the PA system. “Ladies and gentlemen, I have some bad news and some good news. The bad news is that all our instruments are out. I have no idea where we are heading, how much fuel we have left or what height we are at. The good news is…we’re making great time!”

Scary? Hell yeah!

Trouble is many owners run their businesses like this. No real idea of where they are going, whether they are heading into danger, but never-the-less they remain eternally optimistic. As the business grows the almost casual attitude becomes more serious and you lie awake at night wondering how you are going to make payroll next week and whether clients are going to come through with those promised progress payments. You wouldn’t fly a plane like that, so why run your business like that?

Are You a Good Leader?

Are you a leader just because you run a business? Not automatically. But you need to be. Without leadership, the ship that is your business has no captain and no rudder and eventually will founder.

A leader is one who DOES THE RIGHT THINGS. This compares with a manager who DOES THINGS RIGHT. Both are important in a business, but a good leader will take a business and make it grow. Anyone can be a leader, even if the only person they’re leading is themselves.

But you can’t become a leader just by saying you are. Leadership needs to be worked at. There are many virtues to leadership that you can focus on and improve. Here is my top 5 and I invite you to challenge this list and suggest what you think are the most important qualities and skills of a great leader.

The Law of the Rubber Band

I have just started reading a book by John Maxwell called “The 15 Invaluable Laws of Growth”  One law jumped out at me and inspired this post. Maybe it was the catchy title, or maybe it was because it resonated with me personally. It was law #10 – The Law of the Rubber Band.  A rubber band is only useful when it is under tension. The same applies to your life, if you want to grow and improve. Simply put it is says that growth can only happen when there is tension between where you are now and where you could be.  

So ask yourself these questions:

Mental Health Challenges for Business Owners

If you take notice of the safety briefing at the start of every flight, the flight attendant tells you to fit your own oxygen mask first before helping anyone you are traveling with.  Seems a bit self centred, but you aren’t much good to those depending on you if you are not in the best position to help them. The same applies to mental health I believe, and as it’s mental health awareness week this week, maybe you should think about your own needs in this space for a change.

Get Some PPE for Your Business

You shouldn’t operate dangerous equipment without suitable PPE and likewise, you shouldn’t operate a business with out suitable risk protection as well.

Being in business brings with it a level of [business] risk, and the construction industry is about as risky as it gets. The failure rate for construction businesses is only exceeded by the hospitality industry, but this is one statistic where being near the top is not a good place to be. So what can you do to build a protective shield around yourself as a business owner against things going wrong. Here are 5 quick tips

Why a business coach has been essential to our growth

Like many other ambitious business owners in the trades, I was finding myself overwhelmed and consumed by the endless stream of details required to run a roofing company. Days often seemed like unending series of decisions and tasks that were mine alone. Now bear in mind that Kelly, my husband and business partner, also had his own set of daily decisions and tasks in which he found difficulty in delegating.

Overwhelmed by the day to day, together we were not effective managers. I was personally frustrated by the pace at which our business was growing.

I decided it was time for some outside help…..

Lessons from the gym

I was at the gym last night trying my best to maintain my pretty average fitness level.  They have done some redecorating recently and I noticed some motivational mantra added to one wall. One, about getting some coaching help, struck a chord with me as it is very relevant to what I do.