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Draft a Winning Playbook

05/15/24

Many of you may have played touch football when you were young, meeting at your neighborhood field and choosing teams. After a coin toss, one team would kick off to their opponent. The receiving team would have their fastest player catch the ball and run down the field as far as he could without being tackled. Then the offensive team huddled to decide their play for the next down. The quarterback usually called the plays, even though they weren’t always the smartest player on the team. They were usually the one who was the tallest, fastest, or had the best arm. Obviously, there wasn’t a playbook nor did the teams have time to practice their game plan. Before each down, the inexperienced quarterback gathered the team in a huddle and called plays based on what they thought would work to surprise the opponent. The players were loosely told what position to play, who would run which way, whose job it was to block, and where they were to go. Not a very good strategy for a winning outcome.

Are You Better than a Ten-Year Old?

Think about your company. Is your business strategy better than a neighborhood pickup football game? Do you huddle up before every decision? Do you tell your players what to do before every project? Do they know what to do based on written systems and strategies from your company playbook? A professional football team is a good model to copy for small business owners. Professional teams have written strategies and playbooks with detailed plays designed to work in every situation they encounter. Do you?

Draft Your Winning BIZ-Playbook

A professional team must have all their bases covered to put a winning team on the field plus make as much money as possible. Where should you start to draft a winning game plan?

1. Determine your overall company vision, purpose, mission, and core values

Sit down with your key managers and take time to discuss why you are in business and what is the purpose for running your company. This exercise will get you focused on the real reason you go to work every day. Ask yourself why you are in business. They answer should be to make money doing whatever you do, such as plumbing or construction. You are not in business to do plumbing or construction. Rather, you are in business to maximize your resources of time, energy, and money so you can get the biggest return possible.

A construction company can deliver whatever the owner wants. But, it can be limited in net profit margin potential due to the competitive and cyclical nature of the business and its narrow margins. Construction companies can also create excellent opportunities to build wealth for their owners versus building wealth for others. When you build for your own account, it allows for passive income and equity growth. What is your reason to be in business? To make some money or to build wealth?

2. Assign coaching management responsibilities

When a professional sports team is not winning many games, what happens? They fire the head coach. What else happens? Most of the coaching staff gets let go as well. In order to build a winning team, you must surround yourself with the best managers possible. Excellent managers require high pay to keep them. At a national association of material distributors, a successful business owner stated his goal was to double his company to $30 million in sales over the next five years. He loved selling and wanted to try to find someone who could run the operations side of his company. When asked how much he was willing to pay to give himself more free time, double his company, and make more profit, he replied that he was willing to pay $50,000 to $75,000 per year to find a Vice President of Operations. His listeners smiled and said “Good luck!” They knew that finding the right person would cost him more like $100,000 to $150,000 per year.

The problem with small thinkers is that they try to hire cheap because they think they can work harder themselves and hire a weak (cheap) manager. When you hire cheap and you fill the gaps, you are not selling or doing what your top priorities are. And guess what else? You don’t make any money and your business doesn’t grow. Make a list of the top five positions you need filled — sales, estimating, operations, field management, and finance —with the best possible people you can find at whatever the cost. Next, decide which position will benefit your company the most. Go out and hire at least one top professional to help your company grow. Then, look to the future and do it again and again until your company is growing and maximizing its bottom-line.

3. List your player accountabilities and responsibilities

Professional sports teams have many people assigned to scouting and managing their players. They realize that if they want to win games, it is all about the players they put on the field. Most smaller construction business owners don’t spend enough time managing or training employees, or working to help them become the best they can be.

To solve this problem, sit down and make a list of all the positions and functions you need to operate your company. Next to each position, list the results that each position is accountable for and what needs to be done to achieve those results. Then, look at who you have assigned to each position. You will find that several positions are filled with either yourself or the wrong people. On a professional sports team, this almost never happens. The manager of player personnel is always looking to fill each position with the best player possible, even if it means trading away a player for another. The bad players who don’t achieve the expected results are benched or cut from the team quickly. How are you doing as the manager of player personnel on your business team?

4. Design your offensive plays and strategy

To win more games is simple: score more points than your opponents. In business, what plays will guarantee you win, finish projects on-time and under budget, plus provide excellent service and superior quality? What kind of preparation and checklists do you use to ensure your offensive plays work?

Think about where you can lose the most money the fastest. For example, a carpenter forgets to install blocking for future fixture installations. A slab is poured with the wrong concrete design mix, sub-base material, or expansion joint spacing. A foreman proceeds to install extra work without a signed change order. Or, a project manager runs a meeting without a standard agenda and forgets to review some urgent approvals in a timely manner. Where have you lost money? Make a list of the plays you need to write out and make them standards in your company.

5. Design your defensive plays and strategy

Without a good defense, you can’t win many games. Defensive business strategies are those that ensure you don’t always need to hire an attorney to earn your money. Use a checklist on your construction contracts to list the number of days’ notice required for things like approvals and changes.  Additionally, have a general contract checklist to make sure you don’t miss something you wouldn’t want to agree to. Institute a collection policy which includes how you invoice, what to do when not paid, and how to file a lien. What system do you follow when you want to protect your rights or things aren’t going your way?

6. Implement a training program

Professional sports teams spend a great amount of their time practicing and training. Football players attend a long spring training camp and then practice five or six days a week during the season. In construction, most companies don’t train or practice very often, if at all. They just hire people and throw them into the game and hope for great results. Proper training takes a concentrated effort.  Make it a priority at your company to implement a comprehensive training plan with exercises and drills to improve people’s skills.

To start a simple and effective company-wide training program, make a list of the top five things each position must do well to win your games. For example, a project manager must be able to organize, manage, and lead meetings. A concrete foreman must be able to ensure all the embedded steel is in the right place before each pour. A bookkeeper must be sure a subcontractor’s invoice is correct, and any change orders have been fully executed and funded by the customer prior to payment. Estimators must be sure they have read the project specifications and have included all requirements in their bids. While all of these seem simple, each of them will cost you a great deal of cash if they are not done properly.

Make training a priority by implementing a weekly 20-minute training session for each department or crew. Pick one or two areas to review with the teams. Then, have them practice doing the task on their own with input and coaching. Remember, no train, no gain!

7. Develop an equipment inventory management system

Imagine being an equipment manager for a professional football team and not keeping an up-to-date list of what you have, what needs to be fixed, and what equipment you will need in the future. Without a good equipment inventory management system, your team would eventually show up without enough helmets or uniforms for the next game. Equipment is a valuable part of your team’s success. In your business, employees rely on trucks, skill saws, backhoes, generators, extension cords, and screw guns to get their jobs done. With outdated, broken, or missing tools and equipment, it is impossible to get the job done efficiently.

Start by making a complete list of all your tools and equipment. Next to each piece, write out the condition, maintenance schedule, and rental value. Then, assign someone in your company to be in charge of managing the process for you. The ultimate goal is to keep your crews working efficiently so you can make as much money as possible.

8. Initiate business development plays

The key to success in any business is customers, and lots of them. Even in professional sports, an empty stadium won’t keep a team on the field very long. What is your sales system to sell the most tickets and fill all your seats to the top? Do you regularly contact your repeat and loyal customers and thank them for their business? Do you have an ongoing program to reach out to potential customers and lure them into buying from you? Professional sports teams have an entire department 100 percent focused on selling tickets and taking care of their fans. Without a fan appreciation and attraction program, your company will not reach its bottom-line potential.

9. Track your financial plays and strategy

The rubber meets the road on the scoreboard. Did your team win or lose? Without a prominent scoreboard, sports are irrelevant. In your business, the score is of the utmost importance. What numbers will you keep score of? You need to spend time every week reading your business sports page and getting to know your numbers: sales, gross profit, net profit, job costs, employee costs, equipment costs, receivables, payables, bid-hit ratio, and markup trends. Without a clear knowledge of your financial score, you can’t judge how well your team is playing the game.

Play Business Like a Sport

Business is more fun when you manage it like a professional sports team owner or head coach. Every day, ask yourself what decisions need to be made and how would a coach go about making the right decision. In order to win more games than you lose, you need to be working on all of the nine chapters in your playbook, as described above.

Business - Commercial Real Estate Industry

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This article contains general information only. Sunflower Bank is not, by means of this article, rendering accounting, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, before making any decisions related to these matters, you should consult a qualified professional advisor.