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Business Modelling in the Construction Industry | Example Company Included

Business Modelling in the Construction Industry | Example Company Included

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🚧 The Construction Survival Guide

Our Ambassadors have had many requests regarding starting up different construction firms (You can view our latest articles regarding getting started in construction here) and also modelling a business so have asked us to publish The Construction Survival Guide again!

You can download that here.

This book has been a great help to all the start up’s that have recently come through. The Guide is just that, a short book to start a conversation on the running of a business, it's not overwhelming in-depth, we have kept it light and is a great read. We have also been asked to give a short cover of what modelling means in real terms, not just the boring financials account jargon talk. Accountanese we call it.

👋 A little bit on Modelling

Everyone knows that Saint always pushes and encourages our clients to have time for themselves or family.

Every business is different so the background modelling is always quite unique to that particular organisation. The idea of modelling or the reason we push the narrative of it is because it is the Gateway to you being the owner of a business and not a manager of a business, which in turn gives you more time that you keep searching for but will not come no matter how hard you work unless you reorganise.

If you cannot take a day off or if you went to sell the business and you are the business, then you have a job, not a business. If you stopped pedalling the imaginary bike for one day that powers the business, would the business stop, if yes, you have a job, you are not a business owner. We understand saying this causes a great disturbance, and when you first hear it, it’s painful or uncomfortable.

Some get the concept straight away, some do not. We do not push it but as time goes on we see the enquiries come in and it's always “ I read something a few months ago in one of the blogs and it sort of makes more sense now “ and so on.

If we have a 4 partner firm, there would always be one that gets it, he or she would usually be the office/ business end of things with 1 being in the middle ie office and site and the other 2 being very operational who sees business development as a waste of time and effort but see it better to spend in the operational side of the business asking have you seen the new STIHL or HiLTI kit or request more men, resources or merchant accounts. We aim to deliver to both sides, we know the industry.

If the above business was a business in trouble, we would know this is the rough playbook of the management going in. We work extra hard to show and get the operational side on board so they can see the benefits. We then have tactics as well as effort in the game. They are busy in their area of strength, so this concept looks like a poor time spend but once we discuss the value and they really get it, peace of mind, that they are making all the right moves next, time resting, more actual profit, better decision making processes, more visibility, then they start to come around, they themselves become really valuable as they actually see the real problems office people forget like how bloody heavy things really are or something just will not work on-site or has been missed in a quote and with their input, we can then accelerate towards meeting their goals.

We have found those who work in the construction industry appreciate formula, method and process to answer the Y’s to prove why are we doing this modelling. So when we explain things and this small shift in detail or approach when speaking to someone who is not so office based but very hands-on is a small but powerful way for us to communicate on the same level rather than data waffle, so we drop the other key indicators and focus on these as an information line which works. A clear and no-nonsense approach.

Another part of modelling is if you go to sell your business and you are the driving force, what does that do to the value of the business if you leave... If we are asked to value a business we ask for the financials, the software operating systems for the day to day (it's no good being in the directors head who is about to leave) and we ask for the job descriptions. — If this is not to hand then the real fun starts.

We have different stages of modelling, some companies who come on are very advanced and some are not as such. So we run different programs or operations as we call them. These might seem totally out of line with what you do, you're maybe a small company, even a one-man band but then sub a lot of work out and this list below does not fit, we understand that, but by checking you begin to learn or ask new operational questions not just back-office questions about your business in quick succession and these may/can set alarm bells of on the operational side.

👋 Operation Phoenix - Modelling Example

Benefits of an Operation Phoenix:

  1. Increase your ability to make effective strategic decisions.
  2. Understand the key functions within your business and who should be responsible for them.
  3. Clearly define the internal structure of your business.
  4. Determine ideal roles for the business as opposed to fitting roles to the people in your team.
  5. Saint will act as a sounding board for you to discuss your ideas.
  6. Gain access to our systems, products and services.
  7. Develop a business structure that you built and understand Increase efficiency and productivity in your business model.
  8. Develop a structure that will support the future plans for your business.
  9. Clarity for your team around their roles, responsibilities and career development opportunities.
  10. Increase team engagement and satisfaction by clarifying expectations.
  11. Gain clarity on what functions can be outsourced. Allow your business to be more sustainable, improve growth and ultimately, saleability, even if you do not want to sell, run it like you are, this gives you real achievement wins and banks are more open to dealing with a real operator.
  12. Free up time for you to concentrate on revenue-generating activities but now know you can split it so you can now take time off guilt-free.

Do not worry if you cannot answer them, that's not the exercise, it’s so we can start talking the same language over time and build things in, implement, test, approve and move on to the next small target, a constant move forward of improvement that when you review back on your business plan for the year, well, wow.

We also drive hard in all systems to show you where you should position yourself, maybe not right away but what seat to consider you will take in the short future. This stops for example, over trading, exhausting you and your men. If you carry on overreaching you become more and more disorganised and your staff starts having enough, they will stand for a job that has slipped but not constant chaos. They will leave and everything becomes even more stressed.

That's poor leadership or stressed rushed decision making and again these words can hurt but by starting the narrative, in time, we can talk openly and honestly and move past these points with speed as you have already considered the negatives of it.

We are interested in only the future and just becoming better consistently. If you improve 1% every week, we all know what that means and how quickly it builds up, and we are there to help with this transition away from the madness.

With the goal to being more open to moving seats to the new position comes new energy, better operations, more control.

The phrase “Just because you can do it does not mean you should be doing it” should be asked when thinking can you pass this task to someone else and how would that actually work, plan it, write it down, we are now asking better quality questions rather than brain fog or overwhelm and then a different thought process has begun or at least considered but if we make it a goal it can be a reality quickly.

We handle the financials for our most successful clients as this is the real window, the game-changer, for the owners and answers why some others around you seem to be doing so well and most importantly to us, with consistency year after year after year.

As said, there are many parts to the modelling, the financials alone are the foundations,  but that would be too much to go into today!

So please contact your Saint Ambassador or Business Manager! Maybe on some of the topics in the Construction Survival Guide, if it's your first time reading it and remember, we are here to help. 💙

There is not much we have not seen, so do not be shy about contacting us. We are there for you, from giving you the best Tax Protection when you are doing well to protecting you from insolvency and procedures and then standing with you during this time to give you the confidence and drive to turn your company around giving you, the owners back the power.

This article was written for Saint Financial Group, a multidisciplinary group based in the UK that helps construction businesses develop and grow. SaintFG offers a range of quality solutions in supporting businesses.

Saint provides the luxury of free business consultancy for of our clients, call now for your free consultation with a friendly business advisor to discuss your burning questions and put that energy back into your business!

SaintFG

Written by:

Stephen O'Rourke

Got a question? Ask me here 😉

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