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People Who Got You Where You Are Cannot Take You Where You Are Going!

Posted by Randal DeHart on Fri, Jun 22, 2012

Construction Businesses Growing Pains

When You Started- Your construction business it was you and maybe a partner or somebody who was helping with the office work like answering phones, bookkeeping and running a few errands.


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Your Construction Business Grew - And you found yourself with problem employees who little by little took over the back office operations and were preventing your business from growing.


Here You Realize - The people who got you where you are cannot take you where you are going! It is a harsh reality that has everything to do with change. The only people who embrace change are wet babies and everyone else hates it.

Passive Aggressive - Employees in positions of authority and especially Bad Bookkeepers become envious of your success and will destroy your business from the inside like a cancerous infection if you don't replace them. The most common reason is they believe you lied to them! Their paradigm is entrenched and not open to personal growth and change. When they joined your business it was small and fun and not a lot of rules just right and now it is become a profit and money tree just like every other business.

Expansion Isoquants - Are pretty pictures to demonstrate the process of how a construction business grows. 

When The Economy Is Expanding - Demand for construction rapidly and almost overnight outstrips supply because so many contractors gave up and left the industry.

Well Intentioned Yet Unseasoned Contractors - Seize the opportunity to grow their businesses rapidly by haphazardly bidding and winning projects without giving any thought to calculating their company Expansion Path Isoquants, infrastructure, logistical support, working capital requirements, Job Costs or Key Performance Indicators (KPI).


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The Inevitable Chaos - Caused by too much work and not enough labor, material, other costs and subcontractors (LMOS) leads to the contractor becoming a pipe through which money flows with increasing velocity and not in a fun way.

Construction Expansion Path

Level One - Dog and Pickup Truck with annual sales roughly $100,000 to $200,000 and a friend or relative doing the bookkeeping.

Level Two - Salt of The Earth with annual sales roughly $200,000 to $400,000 and the demands of the business have outgrown the skillsets of the friend or relative doing the bookkeeping. It is time to outsource to Strategic Bookkeeping Services and move the bookkeeper to executive assistant. This is where feelings get hurt and people feel unloved because they gave you the best years of their life (Actually you paid them in cash, perks and benefits) and now you are putting them elsewhere and taking away their power! This is where a lot of construction businesses get stuck because "Environment Trumps Will Power!"

Level Three - Professional Small Contractor with annual sales roughly $400,000 to $5 million. This is the "Sweet Spot" where we see a lot of our clients make a lot of money and begin to focus more on what Michael Gerber calls "Working On The Business; Not In The Business".

Level Four - Enterprise Contractor with annual sales exceeding $50 million are run by people with a lot of heartburn and stress because they are so heavily regulated and watched by everyone from the laborer in the trench to the board of directors and shareholders.

Employees At Each Level - Are not suited to work in the levels above or below. Entrepreneurs like you are the only ones who can transition because you learn to embrace changeand when you try to make your staff grow with you it rarely works because they normally will not change.


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About The Author:

Randal DeHart, PMP, QPA The Construction AccountantRandal DeHart, PMP, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. He is the leading expert in outsourced construction bookkeeping and accounting services for small construction companies across the USA. He is experienced as a Contractor, Project Management Professional, Construction Accountant, Intuit ProAdvisor and QuickBooks For Contractors Expert. This combination of experience and skillsets provides a unique perspective which allows him to see the world through the eyes of a contractor, Project Manager, Accountant and construction accountant. This quadruple understanding is what sets him apart from other Intuit ProAdvisors and accountants to the benefit of all of the construction contractors he serves across the USA. Visit to learn more.

Topics: Right People In The Right Places

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