EARLY TO BED, EARLY TO RISE · EARLY TO BED, EARLY TO RISE MAKES AMAN HEALTHY, WEALTHYAND WISE BENJAMIN FRANKLIN •Aim for everyone to work 44 hours a week;

EARLY TO BED, EARLY TO RISE MAKES AMAN

HEALTHY, WEALTHYAND WISE

BENJAMIN FRANKLIN

• Aim for everyone to work 44 hours a week;

• Minimum 7.30-5pm Monday - Thursday;

• Finish @4 on aFriday;

• 1hr extra Mon-Thur - 4hrs

4hrs x5 guys = 20hrs

20 hrs x50 weeks = 1,000 hrs

1,000 hrs @$50/hr = $50k

...Net result $45k

• If you pay your guys an extra$20/week incentive towork

the extra 4 hrs =$20 x 5guys x 50weeks = $5k/year

• Stick to set smoko times;

• E.g. ½ hour earlier, ½ hourlater;

• Request & ensure that everyone isready to start on

time (i.e. arrive at 7.15am for a 7.30am start)

• Let everyone on site know the labour allocation

for each task

E.g. FORECAST: - Framing 70hrs

- Int. 100hrs

- Ext. Clad. 80hr

• Align the labour allocation with individual ability

- Who does what? Skill level vs. charge-outrate;

• Keep daily site logs;

• Encourage efficiency by introducing incentives

to save labour time

E.g. $20 @Toolbox meeting for any great ideas

implemented

• Encourage punctuality

(don’t let the team down); and

• Check productivity by breaking the jobdown

by stage in real time/ backcosting in real time

• Get the right guy for the right job - the correct

task for pay rate

• Introduce incentives for apprentices to not

make mistakes e.g. tool purchases/allowance

• Hire/allocate labour to match the skill level

required e.g. apprentices/labourers/hammer

hands on demos and Jumbobins

• Make sure the onsite foreman isintimate

with the job and knows the scope (take him

through the plans and contract before starting);

• Daily task lists/plan everyone’s day

- based on experience

- Minimum 2 days in advance

• Timetable & GANTT chart visible to everyone

IF YOU THINK IT’S EXPENSIVE

TO HIRE APROFESSIONAL,WAIT UNTIL YOUHIRE

AN AMATEUR

• To be found through ‘work experience’

• E.g. university students (studying

construction/architecture/design)

• E.g. Through the ‘Gateway program’

(work placement through BCITO)

bcito.org.nz/schools-and-providers/gateway-programme

• Can help with easy tasks such as:

• Cleaning the site

• Setting up

• Purchasing materials

• Coffee run

Even if just in the office (marketing/admin.)

• Be aware of health & safety issues if on-site &

make sure the appropriate systems are in place.

• Define your KPI’s, know your numbers and

respond accordingly. E.g. if framing runs over

by 20+ hours, address this in a toolbox meeting -

ask your guys how to get the hoursback;

• Enable ALL staff and subbies (and even

clients) to have access to your PM

software so they can feel ‘in the know’ &

can see how everyone’s part is ‘part of the

whole’.This Createsmuch higher

motivation & buy-in during the build;and

• E.g. Buildertrend, Co-Construct, RaveBuild or

Microsoft Project.

• Order with profit in mind: accurately, detailed and

complete to save unnecessary trips tosuppliers;

• Track the materials going into the job;and

• Order in bulk to save ontransport;

• Check invoices for variances in materials - get the

Foreman to check the dockets to ensurethat

what was ordered is actually onsite;

•Price checking with merchants - every 90 days send

plans to PlaceMakers/ITM/Carters etc. to price check

a job e.g. for a 150sqm project;

• Check your ‘Terms of Credit’

• Use your credit card to get an extra 30-50 days credit;

• Negotiate free delivery for orders over $1,500; and

• Don’t order on the 31st of the month, order in the

begining of the month eg. 1st - 15th tomaximise.

• Use left-overs from the last job;and

• Use the remaining material on otherjobs;

• Encourage changing the ‘rubbish culture’ mentality

on site (incentives for saving materials e.g. the

money made from scrap metal goes towards the social

club/fishing trip);

• If you can’t reuse, return theunused

materials to get a refund (where possible

free return of excess product);and

• Be mindful in the first place to make sure your

orders are correct - spend time todouble check!

• Lock up on site; or

• Use site security; and

• Use a cover overmaterials;

• Check your insurance to ensure you are protected for:

- Theft from vehicles (and your team’s vehicles)

- Replacement value rather than ‘market value’; and

• Plan where to store your materials - minimize

re-handling because it cost you every time

you move it!

• Charge an administration fee for variations($200);

• Minimum flat fee for all variations e.g. $500;

• Include extra time for gear hire e.g.

scaffolding, Jumbo Bin etc.;

• Use a detailed checklist

• Invoice straight away to improve your cashflow as

opposed to the end of thejob

• ‘Tag out’ certain items in your initial quote

which can be identified in variations later e.g:

- Rock excavation

- Asbestos

Lack of detail on plans.

II T’S B ETTERTO HANG OUT WITH PEOPLE BETTER

THAN YOUPICK OUT ASSOCIATES WHOSE

BEHAVIOR IS BETTERTHAN YOURS AND YOUWILL

DRIFT IN THATDIRECTION

WARREN BUFFETT

• Make sure all your subbies take their

own rubbish off the site or they will be

charged;

• Encourage everyone including subbies

to fill bins with extra items that could

be recycled for free (e.g. Gib board);

• Often clients will use the skip bin for their own

rubbish (e.g. furniture/whiteware/fittings

boxes)...organise a way of charging them for

this e.g. split the costs 50/50

• Be clear on the scope of works they will do;

• Set an agreed number of trips per job;

• Use acontract;

• Shop around (minimum every 90 days);

• Negotiate a better rate; and

• Then add 15-20% markup.

IF YOU REALLY WANTTODO SOMETHING, YOUWILLFIND A WA Y. IF YOUDON’TYOU WILL FIND ANEXCUSE.

JIM ROHN

This could be...

• For a $200 - $250k job:

2.5 hours per day @$65

over 11 weeks (55 days) = $8,937.50

x 3 jobs = $26,812.50

Add expenses

• Your PM costs $80k + car, phoneetc.

+ margins on top...5% incl. admin, phoneetc.

SPEED OF IMPLEMENTATION ISTHE COMMONALITY BETWEEN THE

MOST SUCCESSFUL PEOPLE.

THEY TRANSFER THEIR IDEAS TOACTIONS AS QUICKLY AS POSSIBLE.

THE DIFFERENCE IN YOUR LIFEIS GOING TO BE MADE BY THE

ACTIONS THAT YOU TAKE...

EBEN PAGAN

• Work closely with your QS in the beginning;

• Double check all quantities;

• Keep reviewing the quoting process:

Every 4-5 jobs, check

- Subbies

- Site Entry/access set-up

- Health &Safety

- Forecast vs. actual labour times per stage

- Materials

- Your guys & their speed/expertise on eachstage

• Note hours on each stage; and

• Set a min. Gross Margin %per job

E.g. - min. 20% if converting < 50%

- min. 22% – 24% if converting > 50%

• Stop doing free quotes!

• Charge for your QS’s time - make him a valued team

member in your business ...do this especially if

YOU are theQS;

• This works well for insurance companies, especially if

doing earthquake repair work in Christchurch

• E.g. $1,200 - $2,000 per quote

• There is a process for being able to position yourself to

do this - starting with:

- improving your marketing

- Your website

- Your information pack

- Scripts

- Your paperwork

• In real time i.e. labour, materials, subbies...

• Have the guys & site foreman fill in your daily site logs

• Break it down by stage - Forecast vs.Actual

• Make changes accordingly

• E.g. 1. Guys are good mates & talk too much?

- Split them up

2. Grumpy foreman?

- More remedial work needed by

apprentices &hammer-hand

- Chat with him

- 360 deg. Peer review

1. Guys not skilled in certain areas?

- Train them in the areas they

are not good at

2. Difference in numbers was simply

underforecasted for that stage (e.g. Joists20hrs vs

35hrs)

- Allow for more hours nexttime

- Add Safety margin of 20%

• Hunt around to ensure the bestprice

e.g. price a 150sqm house, do this every 90 days;

• Buy in bulk e.g. nails, timber

• Negotiate free delivery to site over$1,500;

• Make use of all promotion specials

• Get suppliers to tender; or

• Show a supplier another supplier’s quote and

get them to compete on that price.

• Keep an accurate cutting list on-site;

• Quality control: measure x2, cut x1; and

• Order properly!

• Get the right guys for the job (ensures the

specialists are there when needed);

•Be crystal clear on trade times on site

(Project Management Software provides a great

visual of this);

• Get subbies involved in your project

management software;

• Scheduling to minimimse downtime;

• Incentives for reaching time targets

e.g. Friday lunch shout;

• Set a targets/time-frames for each task; and

• Use handover checklists for your subbies.

WHAT YOU LACK IN TALENT CAN BE MADE UP WITH

DESIRE, HUSTLEAND

GIVING 100% ALL THE TIME

GEORGE ZALUCKI

• In-house purchase order systems;

• Foreman to always check the delivery docket with

exactly what was delivered to site;

• Make sure to get faulty products credited;

• Check prices: charged vs. what was quoted;and

• Be careful when the client supplies items... - what

is the true cost of that to you? Who loads and

unloads? Who does quality control? Who measures?

Make sure a client supply arrangement is not

costing you money.

• In your ‘WOW information book’

(Lofroth Builders charged 5 advertisers

$500 each to advertise in their information

book)

• On your website

• On site (containers, fences)

• On uniforms

• Site signage

• Have a systemised process for capturing

variations;

• Maintain a checklist on each job with

everything e.g: - insurance

- materials

- labour

- scaffolding

- jumbo bins

• Consider who presents the variation - it is a sales process

• Double check the variation with the QS/management

• Maximise staff per vehicle to reduce running costs;

• Encourage guys to pick up from home/

carpool;

• Choose to work closer to your base, market locally

(this saves fuel and time); and

• Charge your clients for travel costs e.g. perkm.

COMMITMENT IS DOING THE THING

YOU SAID YOU WOULD DO,LONG AFTER THE MOOD YOU

SAID IT IN HAS LEFT YOU

GEORGE ZALUCKI

• This works when you:

• Keep culture aimed to high-end

jobs (and clients);

• Dress your guys all in a professional

uniform including your apprentices;

• Encourage a professional manner at all

times (use TPB’s ‘Rules of the Game’ document)

• See the below examples for a gain of up to $80k to your

bottom line

HE WHO IS NOT COURAGEOUSENOUGH TO TAKE RISKS WILL

ACCOMPLISH NOTHING IN LIFE

MUHAMMAD ALI

• Foreman to let your guys know what they are doing

at least 2 days in advance so they can prepare

to have the right tools for the job;

• Make sure that each staff has a ‘minimum’ tool kit

on site at all times:

- toolbelt

- handsaw

- hammer

- ruler

- nail pullers

- ear muffs

- set square

• No smoking during workingtime;

• No cellphones during work hours; and

• Tool allowance for apprentices or you can help to

fund their tools.

- pencils

- tape measure

- nips/pullers

- nail punch

- craft knife & blades

- steel capboots

- safety glasses

• AN EXAMPLE: (Fixed price contract)

- 3 Guys charged out at $6K per week

($50/hr x40hrs)

- Foreman + you forecast the job @12 weeks, BUT the

team does the job in 11 weeks...

- 1 week saved = $6K

- Foreman gets 20% =$1,200

- You get an extra $4,800

- Plus the team now has an extra week’s capacity,

They can slot in another week’s job.

-With a 50% GP Margin for a new job

($6k - $3k =$3k GP)

...$3,000 + $4,800 (1 week saved) = $7,800

Original job $4,800+ $3,000 = $7,800...From that we

project a happy foreman & a productive team!

• Charge a margin on Cost of Goods Sold

(COGS) - 15% minimum; or

• 20% Markup = 16.7% GPMargin

• 15% Markup = 13.0% GPMargin

• Ensure you know the difference between mark-up

and margin, and its impact on how much work you

have to do to hit your profit goals

• If you already charge a margin, increase

the percentage. - 10%is not enough

• Higher mark-up on materials

• Capture everything involved e.g:

- Heritage listing checking

- Admin

- Scaffolding

- Insurance

- Jumbo Bins

• Increased labour rate ($50/hr to $65/hr) - this

may involve more of your Foreman’s time

• Increased administration fee (specify the rate

in the contract)

Yes/No Items(Yes only to workif 100% on in theof the next90time) daysPlace a tick orcross

Labour1 Start earlier (30min)

2 Finish later(30min)

3Control onsite labour, let people know your labour allocation to provide a goal to aim for leading to

more efficiency

4 Keep daily site logs

5 Keep track of smokobreaks

6 Align the labour allocation with individual and team goals with incentives

7 Encourage efficiency by introducing incentives to save labour time

8 Check productivity against projected costs by breaking the job down by stage (in real time)

9 Work experience college kids for simple labour

10 Send the apprenticeout to do the coffee run & smoko

11 Target the market for the staff you have

12 Hire/allocate labour to match the skill level required

13 Make sure the onsite foreman is intimate with the job and knows the scope

14 Get everyone to check quality control on their own work via a checklist

15 Enable ALL staff and subbies to have access to your projectmanagement software

16 EffectiveToolboxmeetings ($50 for the top 3 ideas used by team members)

17 Maximise staff per vehicle to reduce running costs e.g. pick guys up from home/carpool

18 Keep professionalism at alltimes

19 Keep entire culture aimed to high-end jobs (and clients)

20 Maximise staff per vehicle to reduce running costs

21 Foreman: a) forecast hours b) 20% of labour saved

22 Finish @ 4pm on a Friday

23 Stick to breaktimes

24 Encourage punctuality (don’t let the team down)

25 Use salary earners for night shifts

26 Weekly prize forproductivity

27 Make sure the staff know what extras(variations) are so they can keep the labour component separate

28 Site van with the correct tools for the job that all builders can use. Saves down time looking for gear

29 Employ an extracarpenter

30 Introduce incentives for apprentices to not make mistakes

31 Define KPI’s, know your numbers and respond accordingly

32 Choose to work closer to your base (this saves fuel and time)

33 Make sure all your workers have the right tools for the job

34 Make sure that each staff has a ‘minimum’ tool kit on site at all times.

35 Nocellphones during work hours

36 Keep a fridge of Red Bull – Full

37 Cut loose the badapples

38 A clean site worksfaster

39 Send the young apprentice to pick up materials pay him petrol money each week when he does it

40 Check your employees productivity against projected cost

41 Clear precise instruction forteam

42 Goal setting for the week ahead

43 Set daily goals perworker

44 Use your time in traffic to answer messages ( hands free ) instead of being interrupted whilebuilding

45 Let everyone on site know the labour allocation for each task

46Make sure you bring your apprentice up to speed as quick as possible, don't leave them constantly on

menial work, especially in a small crew

47 Have the apprentices/labourer set up in the morning leaving builders to do their work

48 Keep pre site visits to a minimum


Pricing49 Charge a Project Management fee (eg.$200-250 per job, per day for foreman)

50 Charge forQuotes

51 Charge for QS’s time

52 Charge for travel

53 Charge a margin on materials - 15% minimum

54 Charge an Administrationfee

55 Charge Administration fee for variations not actually followed through on e.g. $200+gst

56 Charge foroverheads

57 Back-cost in real time - Make changesaccordingly

58 Add an overhead to all jobs - 8-10% minimum

59 Capture as much detailupfront

60 Work closely with the QS in the beginning

61 Double check allquantities

62 Keep reviewing the quotingprocess

63 Note hours on each stage (Forecast vs. Actual)

64 Overall Gross Profit Margin should be 20-25%

65 VALUE your time

66 Increase your % margin on COGS

67 Consider charging out all team members at the same rate.

68Stop doing free quotes - There is a process for being able to position yourself to do this - starting with

marketing , sales process andscripts

69 Increase charge out rate for apprentices

70 Outsource pricing

71 Implement automated pricing/invoicingsoftware

72 Use TPBtemplates for pricing

73 Price off consented plansonly

74 Use unit/metre rates for certain tasks instead of a dollar value for hourly rate and margin on materials

75 Use cheap office staff to chase subbies for quotes or chase payments

76 Schedule right - Use PM Software

77Double-check working drawings/details before submitting for building consent to eliminate rework and

holdups.

78 Take all your business funds out of your account to offset your mortgage

Subbies79 Get the right guys for the job (ensures the specialists are there when needed);

80 Be clear on trade times on site

81 Scheduling to minimisedowntime

82 Fixed prices from forsubbies

83 Tender/shop around every 90days

84 Be clear on the the scope of works

85 Add 15-20% Markup

86 Contracts with allsubbies

87 Charge subbies for rubbish (take their own rubbish off the site or they will be charged)

88Encourage everyone including subbies to fill bins with extra items that could be recycled for free (e.g.

Gib board)

89Q-Code' barcodes - b. Codes can be created for emails etc, that anyone can scan and send without

having to have any further info.

90 Rebate fromsubbies

91 Handover checklists

92Set a time-frame for each task – this needs communication between the projectmanager and the

foreman

93It is often cheaper to get subbies to undertake the work rather than your carpenters or your tradies

doing it

94 Right person right job. $50 workers do $50 tasks etc.


Suppliers95 Negotiate prices

96 Hunt around to ensure the best price (every90 days)

97 House priced (E.g. 150sqmhouse)

98 Negotiate free delivery to site (ordersof $1,500)

99 Negotiate free hireage ofequipment

100 Pay with credit card to get air points/flybuys etc.

101 Charge for supplier advertising in information book/ on site

102 Always check the delivery docket against actual products delivered

103 Buy in bulk e.g. nails,timber

104 In-house purchase orders - control orders and costs

105 Be clear on costs to you if the client supplies items (i.e. charge them)

106 Return rentedequipment ina timely manner. Don’t just leave it lying around.

107 Negotiate financial help with your suppliers for uniforms, signage etc.

108 Use Purchase Order (PO)system

109 Supplier to do yoursite signage

110 Get suppliers to tender

111 Show a supplier another supplier’s quote, get them to compete on price.

112 If using regular suppliers, get clients to pay upfront for better discounts

113 Make sure to get faulty products credited

114 Order 2-3 days inadvance

115 Get subbies to use theirsuppliers

Variations116 Administration fee for variations of $200 which are not proceeded with

117 Minimum flat fee for variations (min.$500)

118 Includeextra time for gear hire e.g.scaffolding, Jumbo Bin etc.

119 ‘Tag out’ certain items in your initial quote which can be identified in variations later

120 Maintain a checklist on each job with everythinge.g.insurance, scaffolding, jumbo bins

121 Have a process for capturingall variations

122 Educate your guys what constitutes a variation

123 Lack of detail onplans constitutes a variation

124 Increase fees on variations - mark-up/labour rate/Admin fee

125 Higher markup onmaterials

LABOUR /48

PRICING /30

SUBBIES /16

SUPPLIERS /21

VARIATIONS /10

MATERIALS /26

GRAND TOTAL 151


Materials126 Track the materials going into thejob

127Order materials as early as possible to avoid delays (e.g.scaffold cost can blow out if windows, cladding,

roofing, etc.delayed)

128 Order accurately, detailed and complete to save unnecessary trips to suppliers

129 Order in bulk to save on transport e.g.orders over $1,500

130 Recycle/re-use excess materials

131 Encourage changing the ‘rubbish culture’ mentality on site;

132 Return unusedmaterials (to get a refund);

133 Check the Jumbo Bin each day for extra timber for nogs, any recyclable things, scrap metal.

134 Utilise equipment like gib lifters to reduce manpower needed

135 Check invoices for variances inmaterials

136 Check your ‘Termsof Credit’ – get smart on it

137 Makeuse of all promotion specials

138 Use left overs from thelast job

139 Always have a separate trailer for all recycled rubbish (e.g.Gib board recycle skips).

140 Use the remaining material on other jobs

141 Use where possible free returnof excess product

142 Charge the client to fill your bin with their own rubbish

143 Use a cover overmaterials

144 Protect your materials onsite:

145 Accurate cutting liston-site

146 Quality control cutting: measure x2, cutx1

147 Check brand substitutions

148 Rubbish bin near each builder to save on clean-up time

149 Margin onmaterials

150 Don't over buymaterials

151 keeping control ofexpenditure

Documents

EARLY TO BED, EARLY TO RISE · EARLY TO BED, EARLY TO RISE MAKES AMAN HEALTHY, WEALTHYAND WISE BENJAMIN FRANKLIN •Aim for everyone to work 44 hours a week;