This month, the DBIA Book Club brings you Managing a Construction Firm on Just 24 Hours a Day, by author Matt Stevens. Mr. Stevens is the owner of a construction consulting firm, Stevens Construction Institute Inc. He has been working with contractors as a management consultant since 1994. He has more than 30 years of experience overall as both a specialty contractor and general contractor.
In Managing a Construction Firm on Just 24 Hours a Day, industry expert Matt Stevens reveals dozens of behind-the-scenes secrets to managing your firm better than your competitors, explaining everything you need to know about the make-or-break areas of estimating, pricing, bidding and project management.
This in-depth hands-on guide to the day-to-day business of contracting delivers an invaluable collection of best practices, time-saving business tactics, and forms to help you stay organized and real-world examples of effective reports and other vital management information. From acquiring work and keeping projects on track to managing your people and dealing with common problems, Stevens shows you the smarter way to run your construction business in today’s competitive world.
DBIA: What led you to write this book?
Stevens: “I enjoy our industry and like to write. The book is a natural outgrowth of that. I know many construction contractors and their staffs have great technical skills and are honorable people. The one consistent opportunity for them to be more profitable is a better understanding of the business of construction. Our business is unique.”
DBIA: In your book Managing a Construction Company on Just 24 Hours a Day, you state that the construction industry is the best in the United States, what made you draw that conclusion?
Stevens: “My daughter’s career search a few years ago. It made me think thoroughly about the construction industry in an objective way. On a further note, she will probably become a remodeling contractor. She apparently agrees with me.”
DBIA: What is a contractor’s business?
Stevens: “Basically, acquiring work then doing work while keeping track if all of it. In the simplest terms, this cycle is repeated year in and year out. The faster you can turn the cycle while keep accuracy high the bigger the competitive edge is for you. In a more realistic sense, we have a highly technical business that is relatively low margins (versus other industries such as technology or manufacturing). Don’t forget, we are the second riskiest industry in terms of business failures.”
DBIA: In Chapter 2, you cover the Acquire Work Process, what do you mean by this?
Stevens: “Arriving at an understanding (contract) with a client that is an agreeable to both parties. To receive profitable work, it is a long and complicated process. It involves a largely scientific approach. I explain that in the book. To receive just any work, cutting the price is not complicated. That is science also, but not the best science.”
DBIA: What is project management in construction?
Stevens: “Dozens of steps performed in the right sequence. The project manager must keep an eye out for variations of results. He and she must adjust constantly to take advantage of windfalls and shortfalls in the process. One way to state Project Management in a sentence is ‘It is the management of Schedule and financial performance of a project where Quality and Safety must be kept excellent at all times.’”
DBIA: Which chapter would you consider a must-read and why?
Stevens: “The Business of Construction. We have been taught many concepts in our school and business life that don’t apply to construction. They need to be ‘unlearned.’ Out of a hundred people in the construction business; this is the area where the most have the weakest knowledge.”
DBIA: In Chapter 5, you state “Finding and keeping good people can make the business of contracting more efficient and more profitable.” What are the attributes of a good person in context of your book and how this correlates to an efficient and profitable organization?
Stevens: “The best people are hard working and decent. They have a detail orientation and do pay attention to their jobs and to the boss. They complete against themselves and don’t worry about the ‘Joneses.’ If they have construction skills, that is a bonus. The industry is scarce of these great, industry-ready employees. They are being kept very happy by their current employer because they are so rare. One practical option is to grow our own great employees. At a minimum, you should know many things about any potential hire. Using several techniques and tools in the hiring process allows for greater understanding of who a potential employee really is and what he or she knows.”
DBIA: How did you accumulate your best practices?
Stevens: “We created a basic list of best practices from our consulting and construction experience. We added to it by querying construction contactors and their staffs. Some were clients of ours.”
DBIA: How did you determine their values?
Stevens: “We then had them rank them on ‘importance to making a consistent profit.’ Each best practice we determined was ranked on a scale of 1 to 6. The highest ranked (only 170 qualified) were deemed best practices.”
DBIA: What would you like the reader to take away from reading Managing a Construction Company on Just 24 hours a Day?
Stevens: “We are in a unique industry. We must be careful of how we approach it from a technical and business standpoint. The business is changing and we need to be sensitive to those changes to stay profitable. Outsiders to our business sometimes feel that that our business is simple. It is not. Also, they may believe their business approach will work in our industry. A majority of the time it will not. As a friend of mine once said construction ‘looks simple, works hard.’ There are better ways that others do things in construction. We share many of them. There is no silver bullet, but the adoption of many better ways will add up to a large profit at the end of each year. These best practices will produce a more sustainable business thus a more valuable business — one that can be sold for a premium at the end of a career.”
DBIA: Other than this book, which three books would you recommend to DATELINE readers?
Stevens:
- Sid Levy’s Project Management in Construction (McGraw Hill)
- Hank Harris’ Strategic Planning for Contractors (FMI)
- Jerry Jackson’s Financial Management for Contractors (FMI)
WHERE TO BUY: DBIA Bookstore (202-454-7501 or wwww.DBIA.org)