Aggressive Behavior - July 2009

Time marches on - the economy, some think is on the mend, others think it is still in a freefall. The important question is - what do you think? Is the economy turning in the right direction for you and your firm?

Since the inception of our firm, we have seen some remarkable moves by electrical contractors - some remarkable bright, while some left a lot of room for improvement! By tracking both the bright moves and the other kind we have seen where the firms with a tight grip of their costs, a plan to work towards and an established method of managing their work seem to have better luck overall, in good times and bad. Do you have these items in place?

In today's market we highly suggest that you work smarter not harder, certainly easier said than done. You might want to take a look at some of the previous monthly tips, ask yourself if applying these ideas might help your productivity and bottom line costs.

Several items that have always made sense to me, are to know your project and office costs. Know what your labor burden costs are, check regularly as to your current overhead costs, complete your estimate takeoffs early so that you have time to review them and know that the labor and material costs are as accurate as possible. Have you included all you non-productive labor items, have you included to much for these items? Are your quotes all included and complete? Do you have the accesories needed for all quotable items that you will need. How about spare parts? Have you had your field employees review this estimate to get their buy-in of the estimate and proposal? They may find areas that are better then yours. Having these items competed early will make your final decisions regarding you bid price on bid day less stressful and more accurate.

Recently I heard that Warren Buffett has a motto that is "When others are greedy be fearful and when others are fearful, be greedy" - in today’s economy lots of us are fearful, yet many contractors seem greedy - taking project below costs. This does not make sense to me. Why take a project below your true cost? Know what your ovearhead and labor burden costs are at, put an estimate together that is complete and accurate, and manage the work that you have to assure the best possible profit margins.

Any input to these ideas are more then welcome.

Thank you for reading mine.