Words: Corey Adams
Times have changed for sure. Over my twenty-plus year career in the construction industry, this is one of the only times I can remember when contractors were universally overwhelmed with work. It has been like this for a few years and it feels like we are just scratching the surface of a gigantic movement in the industry. We could talk at length about the causes, the metrics, and the opportunities that await us in the foreseeable future, but that is another article.
I remember a time when we longed for specific jobs, a project that we felt was an absolute necessity to land. Projects like this did not come every day: close to home, large, exciting, and for a client we knew would pay. We need this one; or did we?
The last project I can remember having this conversation over was the poster child for these once-desirable projects. It was only about 20 minutes from our shop to a solid client and it was large enough that we could keep guys parked there for a few months without the need for mobilization. For our small business, it seemed to have it all. We lost it.
Long story short, we spent hours combing through the prints, asking questions, calling meetings, and running and re-running numbers until we had the estimate trimmed to the point of contention. Then the funniest thing happened – we stepped back and asked the real question: how much would we profit if we did not get the job? That is when the light bulb clicked on like a beacon of truth.
After some quick calculations based on our average ticket, we came up with the number to make about $100,000 in the 3-month window that this job would cover. The problem was the bid we were due to turn in the following morning only had about $50,000 in profit figured.
At the eleventh hour, we had realized this project that we had previously thought to be a necessity was actually about to cost us $50,000 in opportunity cost. We proceeded to add $50,000 to the final proposal and lost the project, and we were relieved.
This story’s moral, and the lesson we almost learned the hard way, is that not every project is worth getting. Sometimes it is ok to say NO. We are currently in a time when the customers need us as contractors infinitely more than we as contractors need them.
If you are like me, then your phone is ringing off the hook. We get more calls than a company twice our size can handle. Since I am happy with our size, profit margins, and the family business feel that we continue to strive for, we get to pick and choose which jobs we accept. I say no to more people more often than trying to sell a project.
Small businesses, especially those just starting, have a hard time telling people no. We scratch and claw for any project that puts food on the table, but is it the right decision? No.
Learning how to pass on projects is a skill in itself. Weeding through the tons of potential projects, trying to decide what fits your company best can be time-consuming but is worth it. Once you choose to go after a project, make sure to step back and re-evaluate before submitting the final numbers. You may find yourself cutting your own throat and losing by winning.
I was always taught and lived by the phrase, “Some of the best jobs ever are the ones you don’t get.”