An introduction or reintroduction for FullValueBuild. Years ago, my family built an erection and form rental business. The erection business had a significant market share in its market. The form rental business was the largest in the country. Because both companies failed to honor their promises of succession to the next generation, the erection business was liquidated and the rental business was sold to a national firm. Watching a successful company lose millions in value when the founders retired was painful. Seeing 200 employees laid off because of bad planning was embarrassing. The pain and embarrassment experienced created a lifelong desire to help other contractors avoid a similar experience. FullValueBuild (FVB) is a short form platform to share lessons learned and thoughts along with proven data supported processes, and strategies. Craft of Execution (COE) is a long form platform to dive deeper into the craft of consistently executing a contracted scope of work. A link to sign up for the COE is in FullValueBuild's bio. It is hard for me to see FVB or COE ever being monetized. They are both designed for contractors that our training, consulting, and coaching arm cannot reach, or prefers a DIY approach. Over time all our processes and strategies will be shared via FVB or COE. Contractors wanting a DIY approach can extract the required knowledge from FVB and COE over time. Reading both FVB and COE will be required to extract all the processes and strategies. Contractors with a higher sense of urgency addressing a specific challenge or desiring a better leverage on their time should engage our consulting company. Before you say, “Our operations are tight.”, consider FMI Consulting’s project management survey found 90% of contractors reported having a “company way” of working but only 24% said it was consistently executed across the entire company and all projects. Having a “company way” that is not supported by clearly communicated data proven processes and strategies supported by continuous training is why only 24% said their company consistently executed the “company way” across the entire company and all projects. 24% means only 1 in 4 contractors consistently execute the “company way.” No wonder almost every contractor I know complains about job delays on a regular basis. The solution for increasing the consistent execution of the “company way” is the same process that was used to improve safety, a contractor clearly communicates the process of being safe and leadership reinforces the importance of safety on a daily basis. Why is consistently executing processes and strategies important? Simple, increased profits and increased enterprise value. Consider the following points. Consistently executing processes and strategies can increase net income by 1% year over year for 10, 20 or 30 year periods. That is a 10%, 20%, or 30% increase in profits over the noted time periods. Per FMI’s project management survey only 24% of the companies are in the position to achieve a 1% increase in net income year over year. Only 24 out of every 100 contractors!!! The other 76 out of a 100 contractors are experiencing leaks of 1% or more year after year because they do not have clear and shared data proven processes and strategies that can be consistently executed.

All trades are interesting to me. But nothing gets my attention and builds excitement like a tower crane hovering over concrete forms, concrete and rebar. The only thing missing is the smell of form oil and wet concrete.

Trade contractors financial consequences of bad project management by a GC. A trade contractor has two projects with a GC. The second project the margin was increased due to some payment challenges on the first project. It was not enough. The trade contractor has not received retainage on a project that they completed in January. The project is being held up a last minute City driveway requirement. The GC awarded a second contract to the trade contractor. The project was supposed to be finished in July, and payments were promised by the 15th of the month following submittal of payment. Only the first payment was received on the 15th. The current invoice of $67,000 is late and unpaid. Additionally, $22,000 in working capital is still tied up in retainage that should have been released this month. The working capital will be tied up for an extra 60 days. The project is being held up because the GC picked a flooring contractor that primarily does schools. The contractor does not have any crews available until schools start. Everyone's retainage is being held up due to the GC's poor choice of flooring subs. We will not be doing any more work with this GC. The increase in margins does not outweigh the disruption to labor and capital deployment. Trade contractors do not provide GCs that cannot manage their project the same price as GCs that manage projects well. Trade contractors need the good GCs to grow and the bad GCs to be removed from the market. The same applies to GCs that pay on a predictable payment cycle.

The number one weakness of almost every trade contractor is implementing and maintaining financial and accounting systems. The number one challenge to scaling trade contractors is establishing and maintaining a clear communication loop between the field and the back office.

Want to sell your business? Make your business saleable. Three things that make a business saleable. --- Can continue without the owner. --- Has a system that nurtures & sustains consistent execution. --- Has a set of books that documents the system works.

Worth the read for trade contractors focused on consistently scaling a trade business to achieve Full Economic Value. This account exists to serve trade contractors. I am a third generation commercial trade contractor that has executed every position in several trade businesses from laborer to CEO. I estimated and contracted a significant commercial concrete form package for a hospital at 19. Significant is middle six figures. For years, I served on the board and executive committee of an ABC chapter, and on the board of an ASA Chapter. I served on an advisory board of an independent bank as well as trustee for ABC local, state, and national PACs. I met my wife in a ABC training facility. Training has been a constant theme throughout my career. Years ago, I was blessed to work closely with one of the best business valuators in the country. I learned the basic concepts of how businesses were valued, and what was necessary to maximize their value. I consistly saw trade contractors destroy more value than they create by not understanding and executing the business of their trade. This troubled me. Trade contractors work to damn hard not to maximize the value of their business when they are ready to sell and retire. Good news is that the steps necessary to maximize the sell price of a business at retirement are the same steps required to maximize the value while working. Receiving the maximum value when a business is sold is called a Full Value Exit. Supporting trade contractors to achieve Full Economic Value during working years to set up a Full Value Exit is the goal and inspiration behind Full Value Sub. Owners and managers of trade businesses have to be good at two skills sets to achieve Full Economic Value. --- They have to be good at a trade. --- They have to be good at the business of their trade. Note: Good, not great. A trade is primarily learned on a job site or a shop. Training in these areas are not lacking. The knowledge and tools for learning the business of a trade are insufficient as reflected in the poor execution seen daily in trade businesses of all sizes. Even $10M to $20M and larger trade businesses. The business of a trade businesses is very nuanced and challenging. Nuanced because field experience is almost required to be able to manage office positions such as estimating and accounting. Percentage of completion and accrual accounting are very challenging concepts to implement and manage. Accurate and timely job cost reports take daily focus to maintain quality data. Over and Under Billing, or WIP reports, and Committed Cost reports as well as financial statements take time to learn how to use, and to be able to articulate to your team members what information is required and how the information should be structured for your specific trade. Bookkeepers and CPAs cannot tell you how the information should be best structured. They should be able to get close, but value is maximized in being exact. Learning the business of your trade is time consuming and challenging that executives find keeps them from being close to the trade they love. Being an executive does and has to move the executive away from executing a trade if maximum value is to be created. We understand this comes to a huge surprise to many new owners of trade businesses. Full Value Sub's passion is to support and make the acquisition of the knowledge required to learn the business of a trade as efficient as possible. Full Value Sub's support system will be expanding in 2024 to include the following training and support tools. --- Craft of Execution | A weekly newsletter for more in depth unpacking of challenges faced by trade contractors. Generic documents will be attached for utilization by any trade contractor. --- Elements of Execution | A weekly Podcast discussing the elements of execution required to achieve and maximum economic value from a trade business. --- Value of Execution Courses | Visual and written training on every step necessary to consistently and efficiently scale a trade business in order to achieve Full Economic Value. --- Job Execution | Enterprise Resource Planning Software built specifically for trade contractors with built in written and video training focused on executing the business of a trade contractor. Job costing implementation and managing training will be built into the system. As well as other managerial accounting reports such as Over and Under Billing or WIP and committed Cost reports Full Value Sub believes that trade contractors have a singular purpose, the consistent execution of the trade contractor's contracted scope of work. Full Value Sub has a singular focus of providing training and support tools required to consistently execute a scope of work while achieving Full Economic Value. Execution is defined as planning to have the correct people, tools, and material in the correct place at the correct time working within plans, specification, and written procedures and processes to meet customer expectations. This definition of execution should be considered the Prime Directive of every trade business. As essentialists, we believe execution should be achieved with the minimum effort possible. Achieving an objective with minimum effort possible also maximizes profitability, a requirement for achieving Full Economic Value from a trade business.

Trade contractors embrace technology. Technology is a tool. Trade people understand tools. Trade people understand jobs require less labor with correct tools. Trade people understand learning a tool requires repetition. Trade people understand customers receive a better product on time when properly maintain tools are used correctly. A computer is a tool that reduces labor, requires repetition to learn, needs to be maintained, and reduces labor. Stop working harder. Embrace technology or risk become a living dinosaur.

Watching a plan being executed with the correct people and equipment is beautiful.

Aggravating but critical information to post. Contractors are the most targeted business as a group for phishing type attacks in the US. The main reason is contractors use weak passwords and avoid dual factor authentication protocols. Followed up with a GC yesterday regarding a couple of payments, his email was hacked and use to divert his August ACH payment from Coke to a different "new" checking account. His payment has been rescheduled to fund on November 2nd, but he lost about 8 to 10 hours trying to find the correct person within Coke to address the challenge, and then providing the required banking documentation. The correct person was located in Mexico for a US project. This event has also held up his September payment. Retainage has been held up on another job because a trade contractor would not sign a lien release because they have not received the payment. The GC thought the check was credited to the wrong job. Finally, the GC requested a copy of the check. The check had been cashed but not by the trade contractor. Retainage for all the trade contractors of the project were held up by about 45 days due to a stolen check of one contractor. Keep your guard up when anything changes in the payment process. Use strong passwords with dual factor authentication. Don't assume business as usual. Team members with poor computer skills are becoming a bigger and bigger liability. Make sure you are not one of them.

Rockefeller's Number 7 stood out to me. Too many trade businesses neglect and delegate to the wrong people the business of their trade. Specifically, they neglect to implement required managerial accounting systems supported by clear concise written SOPs. As a CEO of your trade business are you embracing learning the business of your trade? If not, #7 is applicable. 7. Look at those who fail and you will find that most people fail not because they make mistakes, but because they are not fully committed. The same goes for companies. Trade contractors CEOs points to ponder as you are travels from project to project this week.

Intrinsic to an execution centric culture that embraces mistakes is a culture that allows an owner-COO time to learn to become a CEO.

Why should you learn a trade? To build cool stuff that becomes your legacy. Building cool stuff creates a sense of pride & accomplishment. Follow @Build_Culture They are building cool stuff that will stand the test of time. 👏👏👏

Trade contractors need to be telling and promoting stories like the one below. At 20 years old, the young man has a high income trade job in a industry with a labor shortage without any college debt. At 20 years old, he is probably $250,000 or more of income ahead of college graduates. A number that will grow over the next several years. He has a clear path to owning his own business. He will have the opportunity to buy a business with a proven track record that he knows well, and who's customers know him. He gets to wear jeans and drive a truck daily. Can make extra money any weekend as a plumber doing odd jobs. Probably has to turn his phone off on the weekends because so many people want him to do jobs for them. How many career paths can beat his chosen path?

A painting trade contractor was having liquidity issues due to this issue. One of his largest GC clients, and "buddy", sent him to his banker. The banker was surprise the painter had not been paid. But would not work with him because he was not enforcing his lien rights. I was able to convince the painter to be more firm with in collecting and enforcing his lien rights. His "buddy" stopped taking his calls, and stopped allowing him to bid his work. His "buddy" was buying out a retiring partner. The painter and other trade contractors were financing the buy out. The painter later told me he found other contractors that are more profitable with better payment praticing. He said you were right. I thought he was my friend. Trade contractors are in limited supply. Stop being abused contractually and stop financing construction.

When onboarding a new GC, subs should not accept the contract is "take it or leave it". But must have an positive alternative. A GC sent sub a contract that was going to take two hours to mark up. I suggested they not waste the time. The sub politely told the GC that the contract's language does not meet the sub's guidelines. Then let suggested a "neurtral" AIA would be accepted. The GC said, "Other subs sign the contract". Then said he would get back with the sub. They both has agreed to sign an AIA contract. A contract that protect both parties equally.

A great example of a contractor planning to have the correct material in the correct place at the correct time. Execution is a planned activity.

Trade contractors don't get mentally lazy or comfortable with one GC. They may be the best thing since Post Toasties, but you increase your business risk by being a one trick pony. Trade contractors loose control of their business when they only have one client. The client can decide they no longer want to do business, or the client can hit a dry spell. Either way, your business will suffer. Goal should be to have 3 to 7 core GCs. With one being no more than 25% of your business. Ideally, no one GC should be more than 15% to 20% of your business. 15% seems to be a comfortable balance of being significant without undue concentration.

Trade contractors mantra the next decade. Make special note of the last line in bold. Recruit | Train | Recruit | Mentor | Recruit | Repeat" The construction industry will need to attract an estimated 501,000 additional workers on top of the normal pace of hiring in 2024 to meet the demand for labor, according to a proprietary model developed by Associated Builders and Contractors. In 2025, the industry will need to bring in nearly 454,000 new workers on top of normal hiring to meet industry demand, and that’s presuming that construction spending growth slows significantly next year."

Learning moments create value from mistakes. Learning moments are the only way to extract value from mistakes. Learning moments turn a loss into a win.

Managing a trade constractor requires focusing on consistent execution, teaching consistent execution and reinforcing consistent execution. Trade contractors are contracted for the consistent execution of their trade per plans and specs.

Contractors get to build cool stuff with cool equipment. Sometimes contractors get to do cool stuff. Not much cooler than this save.