#079: Ten Activities Worth $1K Per Hour or More

As a construction business owner or leader, you need to spend your time on “high value” activities

Here Are Ten Activities Worth $1K Per Hour or More:

#1.  Sell new projects or contracts

Sell new work: it’s the number one thing that you can do worth at least $1,000. For example, you could spend eight hours, estimating, selling and negotiating a project that has $8,000 of profit in it. That means your time spent selling and estimating is worth $1,000 an hour.

#2.  Upsell existing clients

This is very, very valuable. Upselling is offering a suggestion to a receptive buyer to enhance the value of their purchase.

The key to upselling is understanding the timing of making the upsell offer. The sweet spot is to offer the upsell after they’ve made the decision to do business with you and before there are ramifications for making this change. So the ideal time would be soon as they made the decision to do business with you, and before you’ve started the work, maybe even before you sign a contract, if that’s an opportunity. But if you already have signed a contract, it could be a good time to go offer an upsell to them. Again, an upsell is offering a suggestion to a receptive buyer to enhance the value of their purchase. I’m not talking about holding them hostage with change orders, but something more valuable.

Here are a couple of things you can do to upsell more work.

#1. The first step is to identify the types of customers you’re dealing with. You’re going to put together an upsell package, a menu of options that you’re going to upsell. So you want identify your customer types. Are they homeowners? Are they industrial facility managers? Are they general contractors? Are they schools? Are they hospitals? Are they an apartment property manager? What are your customer types?

#2. Select the list of upgrades you could offer that could be valuable to them, and then be able to point to why they might be valuable to them.

Here are a couple of examples.

If you’re a siding contractor, then you would offer potentially a new front door, new shutters, windows, gutters and downspouts, maybe a garage door, maybe there’s an exterior lighting package that you offer, maybe even some stone veneer as an accent. If you’re an electrician, you might want to offer some sexy exterior lighting on their deck or their patio, maybe check out their gnarly old electrical service and upgrade it to a new panel, maybe even install a whole house emergency generator so they can write out the next ice storm or the power outage. You get the idea.

The idea is to ask two questions.

“What else?”

What else can we do for you? What else can we offer to add value to the purchase you’ve already made? What else? What else can we do that would be valuable? And then the other question is, while we’re here, what else can you do? Ask the question to your client, while we’re here, what else can we take care of for you? Then also ask the question of yourself, so while we’re here in this neighborhood, what else can we do for the neighbors, for the folks up and down the street, the people across the street?

“While we’re here…”,

How can we maximize the revenue from this trip? So simply asking that two word question, what else, and then that three word question, while we’re here, you should expect to get a one to two percent bump on every project through an upsell. So by simply asking that question, you could increase your revenue one to two percent, easily worth $1,000 an hour.

#3. Build key relationships

Time spent building key relationships is worth easily $1,000 an hour. And when people ask me, how can I grow my business? How can I generate more leads? Should I do advertising? Should I be on Yelp? Or should I buy leads from these internet services? My advice to people is this. Step one, build a referral network.

Build a referral network.

And what that means is, first of all, find the type of people through whom most, if not all of your projects, come through. For example, if you do high end residential remodeling, chances are very high that they’re working with an architect. So instead of you trying to go find those homeowners who have projects, you should go find those architects who those homeowners are coming to, and build relationships with the architects.

If you do commercial tenant improvement work, you would want to develop relationships with property managers and real estate brokers.

So think about who do most of these customers go through, and then go build key relationships with them. You could spend, for example, you might spend a few days building your referral network, you may contact 50 people, get one key relationship out of that, that will generate a steady source of leads for you for the next several years.

If you want to hear how that works and get some more details, go check out episode 54 of the podcast, which was an interview with a guy named Jonah Canter who did this. His entire lead generation strategy when he started his business was to develop relationships with real estate brokers. And at least at the time that we did the interview when we talked, he was still getting work months, or maybe a year or two later from this referral network that he had set up. So building key relationships, easily worth $1,000 an hour.

#4. Plan your projects

I’ve been leading construction businesses and projects for over 20 years, and most of the problems I see on projects are foreseeable. When something pops up, the response is something like, “Well, we didn’t think about that. We didn’t consider that. We weren’t prepared for that. We thought this was taken care of.”

Most of the productivity problems are foreseeable. The issues that slow down productivity, that cause project overruns, and cost schedule issues are foreseeable. Whether it was on a small scale… tools that were forgotten, somebody didn’t load the material on to the truck, a piece of equipment was moved and nobody was told, all these issues that show up as productivity problems, in a lot of cases…

…the root cause is lack of planning.

So let’s talk about what planning is.

Here’s the deal, every decision that’s going to be made on your project, on your job site, on your crew will be made at some point, all right?

You get to decide, are you going to make the decision at the last possible minute when you have people standing around, and you have the meter running, you have equipment, and you should be making revenue? Or are you going to wait until the last minute to make the decision?

My advice is to push those decisions into the future and make the decisions the day, or the week, or the month before, when the cost of decision making is much lower, all right? It’s much more economical and productive to make decisions in advance.

When you’re planning, you’re simply making decisions in the future

So imagine this. Imagine if you could spend four hours a week planning your work for the coming week or the coming two weeks, if you do, say a two week look ahead schedule, and you spend four hours a week planning your work, you could avoid lost time, you could identify the materials that need to be ordered, having things staged and ready, and schedule deliveries. You could sequence the work better.

You could talk to your subcontractors that are going to be involved, put together a detailed schedule, stage workout well. You can identify any information that you need that you don’t have, approvals, color selections, approve shop drawings, change orders, et cetera. You can identify change order opportunities. You could identify upgrade opportunities while there’s still time to incorporate it.

Imagine if you could spend four hours a week doing that, would you expect that you could save some money? In my experience, whenever I could spend time like that, if I could spend four hours planning work, I could probably come up with $5,000 to $10,000 worth of improved productivity, avoided lost time, change order opportunities, and other solutions that would make me $5,000 to $10,000. So that means my time could be worth say $1300 an hour to $2500 an hour.

If I can spend four hours planning and come up with $10,000 of savings or additional profit, that means my time’s worth $2500 an hour. So planning your work is one of the absolute best ways you can use your time, much better than sending in emails, keying in invoices, driving forgotten pieces of equipments and tools to your crew. You need to be in a position where you have time to plan your work.

The root cause of a lot of cash flow problems is poor productivity.

The root cause of poor productivity in a lot of cases is poor planning. So if you have cash flow problems, if you have chaos in your business, you need to be planning your work better, planning in more detail further in advance. If you want a formula for planning your work, if you want a step by step formula so you don’t have to figure it all out on your own, I’ve put together what I call the Project Execution Formula. It’s one of the things you’re going to get free when you sign up for the Construction Business Accelerator at constructionbusinessaccelerator.com.

#5. Prepare and review contracts.

Don’t assume just because the contract is “boilerplate” or “standard” that it’s OK.  You should review every contract and look at:

– Payment terms

– Insurance requirements

– Dispute resolution terms

– Reporting requirements

– Scope of work

– Contract documents

– Owner obligations


#6. Build systems

Think of building systems as investing your time, and getting a return on time invested (ROTI).

For example: If you spend 10 hours creating a system or process that will save your company 100 hours per year, that is a good ROTI, which could make that time worth over $1,000 per hour.


#7. Hire and Train

You could spend 3 days recruiting, interviewing and hiring for a key role (PM, superintendent, etc.) who will generate $10,000 profit per month.

That means the time spent hiring is worth $5,000 per year.


#8. Strategic Sourcing / Vendor Negotiation

I spent a couple of hours negotiating a better deal with a crushed stone supplier a few years ago.  The result?

I saved $500 per day…every day.

When negotiating, I recommend giving the vendor a price target, instead of asking for their best price.  Start the conversation with, “Will you take….?”

Other ideas include:

– Negotiating for free delivery service.

– Contact your insurance agent and get better rates.

– Call your credit card company and negotiate a lower interest rate.

– Negotiate a lower lease rate with your landlord in return for renewing the lease.

– Set up a commercial account with your parts supplier and negotiate a discount off retail.

– Buy fuel in bulk.

– Start with the suppliers you buy the most from and work your way down the list.


#9. Quality control 

To prevent rework, punchlist issues, warranty problems, and long term risks that result in litigation, perform your own quality control inspections.

Identify key points in your projects when work gets concealed or covered up, and inspect the work to verify compliance with the contract documents.

For example:

– Inspect building subgrade before foundations are installed.

– Pre-pour inspections before concrete slabs are poured.

– Framing and rough-in inspections before insulation and drywall goes in.

– Above ceiling inspections before ceiling tile installation.

– Water testing of windows and building envelope materials.

– Roofing inspections.

I have identified mistakes and potential risks worth hundreds of thousands of dollars during quality control inspections.

What if you could spend one hour doing quality control and find an issue that would have cost $1,000?  Would that be time well spent?


#10. Strategic planning

As a business owner, it is IMPERATIVE that you have a vision and direction for your business.  Investing the time in your business to develop your vision, then turn that into a strategic action plan will accelerate the growth of your business.


Resources mentioned in this construction podcast:

The CONSTRUCTION BUSINESS ACCELERATOR – Maximize revenue, put financial stress and anxiety behind you and turn your business into a well-oiled machine.

Outsource your bookkeeping headaches:  Click here to learn more about the special package Apparatus Contractor Services put together for the CLE Nation.

Tsheets app for timesheets

Archisnapper app for jobsite inspections, checklists and reports