John Doe has been working hard for “the man” for the last ten plus years and he realizes that he’s making a lot of money for someone but it sure isn’t him. Mr. Doe begins thinking about what it would look like if it was his name on his sweat soaked t-shirt. What if the customer were writing the checks to John Doe Construction? Even in a season of unrest, there are plenty of opportunities for growth minded professionals who are ready to take the leap into entrepreneurship. Reaching your dreams starts with developing the right mindset and habits to succeed.
The motivation to go out on your own
How does the blue collar nursery rhyme go, “Boss makes a dollar, I make a dime, that’s why I poop on company time.” The difference between the dream of owning your own business and making it a reality is putting action behind your thoughts. Some people do this the smart way and start to build a side hustle until they feel they have something strong enough to sustain them going out on their own. Others jump into the deep end with no safety net. The problem many new entrepreneurs face is that they don’t know what they don’t know about the business side of things. When you’re on your own, you have to provide your own toilet and buy your own toilet paper.
You bought a job not a business
At the startup stage, many contractors feel like “beggars can’t be choosers” and they take anything they can get even if they know the project is light on profitability. There is a process of moving from pennies to quarters as you scale up the quality of your clients. At the core of your business you must understand what Michael Gerber outlines in his popular book, The E-Myth, ““If your business depends on you, you don’t own a business—you have a job. And it’s the worst job in the world because you’re working for a lunatic!” You need to decide whether you are going to be a sole proprietor and charge a premium for your high quality work so that you can build a future for yourself. Or, you need to operate like a business and charge enough to build a team.
Build a foundation for your future
The skilled trades person who takes the gamble on themselves to start their own business often has to learn business by trial and error. Where many of these errors start in construction is not properly charging for your services. You have to learn how to price yourself right for your market, in relationship to your hard costs (overhead) and with your vision in view (profit) so that you can achieve your dream, not just own your nightmare. The right mindset and habits for estimating are critical to your success, which are topics that Jon Isaacson, The Intentional Restorer, takes head on in his latest book Be Intentional: Estimating.
Master the tools that make sense for you
As you build your business, it is helpful to have standardized systems that help with checks and balances so that you are not just going with your gut on every decision. In construction the standard has been resources such as RS Means, which provides pricing guidelines for trades, services and regions. Another option, which is common in insurance claims, Xactimate provides tools for contractors to enable them to write consistent estimates while also producing production plans, budgets for materials as well as targets for labor and duration.
The value of mindset and habits as an entrepreneur
Whether you are a startup or have been operating for some time, if your business is struggling to be profitable, you may need to look no further than your estimates to start fixing your business problems. You may think this is an oversimplification but think about all the stress that a bad estimate places on your process, your production and your profits. A poorly written estimate leads to poorly structured production plans which leads to poor execution, unhappy customers, frustrated teams and sinking profits.
To quote from Be Intentional: Estimating, “Strong estimating mindset and habits will help you to provide resources to invest in your process so that you can identify issues, resolve them, repeat and build upon your success.” Clear communication via developing strong internal processes for core aspects of your business such as estimating, will help business owners to be more efficient, reduce scope creep and produce quality revenue.
Start your process with the right mindset and habits as they will be hard to change down the road. Set yourself up for success by successfully setting yourself up to succeed. If the end product is causing dysfunction, track your way back to the start of the project and fix your structure by starting with your estimating process.