Piecing It All Together ! Fundamentals to Consistently Make
Money with Your Business Presented by: Tyler Construction
Engineers, P.C.
Slide 3
Tyler Construction Engineers, P.C. work exclusively within the
engineering construction industry to provide the most comprehensive
business resource for small business owners.
Slide 4
Marie Williams, MBA human resources specialist & leadership
development Sandra Webb accounting & payroll systems Jay B
Mercer accounting & small business tax strategies Curtis Webb -
strategic marketing & competitive advantage strategies Marshall
Tabb accounting, cash & debt management, leadership development
Ericka Hayes, CPA business planning & Information technology
strategies Teresa C Daniel, PHR - human resources specialist &
leadership development Victor Tyler, P.E. construction business
practices, bidding & pricing strategies Our Consultant
Team
Slide 5
Your Name Hometown School Your interests What do you see
yourself doing in the future? Introductions
Slide 6
Successful business owners/ managers share 3 Characteristics:
They Know What They Want. They have a Written Plan to Get What They
Want. They Always Make Progress Toward What They Want.
Slide 7
Measurable Predictable Repeatable Successful business owners
create processes that are
Slide 8
Business Fundamentals: Business Strategy Marketing Strategy
Financial Strength Human Capital Information Technology
Leadership
Slide 9
Fundamentals of Company Operations & Culture Panel
Presenters: Marshall Tabb & Ericka Hayes Fundamentals of
Marketing Panel Presenter: Curtis Webb Fundamentals of Making &
Maximizing Your Profit Panel Presenter: Victor C. Tyler, P.E
Fundamentals of Tracking & Measuring Your Performance Panel
Presenter: Jay B. Mercer Lets Talk
Slide 10
Whats wrong with this picture?
Slide 11
Presented By Marshall Tabb & Ericka Hayes, CPA Company
Operations & Culture
Slide 12
Fundamentals of Service Delivery Company Policies Procedures
Customer Service Work / Life Balance Discipline Attitudes Risk
Business Strategy Financial & Budget Business Processes
Information Technology Marketing Sales Training Your Company
Culture
Slide 13
THE LATE GREAT HENRY FORD SAID: COMING TOGETHER IS A BEGINNING
STAYING TOGETHER IS PROGRESS WORKING TOGETHER IS SUCCESS
Slide 14
SUCCESS? ACCORDING TO WEBSTERS: THE ACHEIVEMENT OF SOMETHING
DESIRED, PLANNED OR ATTEMPTED.
Slide 15
Policies & Procedures Begin with the End in Mind
Slide 16
THE POLICY MANUAL Direct employees to conform to overall
management philosophy. Highest authority for conduct in the
company. Takes precedence over all other publications. Should not
hold the company Hostage by being too restrictive.
Slide 17
Standard Operating Procedures Details the How To of a job or
task. Start with a Purpose, a General Narrative and show its
Applicability. Use position titles/functions vs. individual names.
Must be kept current.
Slide 18
COMMON POLICIES & PROCEDURES Accounting Operations
Personnel Marketing Bidding/Estimating Safety Record Retention Risk
Management
Slide 19
Lack of Policies & Procedures Cause: Inconsistency Poor
Internal Control Poor Communications Confusion Low Morale Employee
Turnover Anger / Frustration Lost Profit (Rework)
Slide 20
Policies & Procedures Create Processes That Are:
Predictable Measurable Repeatable
Slide 21
Lack of Policies & Procedures Cause: Inconsistency Poor
Internal Control Confusion
Slide 22
QUESTIONS?
Slide 23
Presented By Curtis Webb FUNDAMENTALS OF MARKETING
Slide 24
What Is Marketing? An activity or process that creates interest
The Goal is to Attract Attract Persuade Persuade Retain Retain The
Goal is to Attract Attract Persuade Persuade Retain Retain
Slide 25
Foundation Statement You cant give value to someone until they
understand or appreciate what you are doing, or what youve
done!
Slide 26
Where Do I Begin? Begin the marketing process by doing a
self-assessment There are three critical questions to ask
Slide 27
Self-Assessment What is it that Im trying to do? Know what
advantages you bringKnow what advantages you bring How am I trying
to do it? Define the objectiveDefine the objective Who am I trying
to do it with? Know who to targetKnow who to target
Slide 28
Its All About Benefits let your prospects know all the benefits
your solution gives!
Slide 29
Explain Your Solution Let your prospects know you have a better
solution to their problem!
Slide 30
Showcase Your Solution tell your prospects why your solution is
better!
Slide 31
Remember Say or do something that gets your prospects attention
Let the prospect know you have a better solution to their problem
Tell them why your solution is better Let the prospect know all the
benefits your solution brings Prove to your prospect that what you
say is true Get your prospect involved in asking questions Say or
do something that gets your prospects attention Let the prospect
know you have a better solution to their problem Tell them why your
solution is better Let the prospect know all the benefits your
solution brings Prove to your prospect that what you say is true
Get your prospect involved in asking questions
Slide 32
Presented By Victor Tyler, P.E. FUNDAMENTALS OF MAKING &
MAXIMIZING YOUR PROFIT
Slide 33
Spending Habits Source: PewResearch Center
Slide 34
Making & Maximizing Your Profit Know Your Costs. Understand
Your Costs. Cost first, then price. Make the estimate comparable to
the P&L Statement Document data. Be detailed Be factual Base
the estimate on historical data Compare final actual with the
estimate. Synthesize all facts into the bidding plan. Be timely
& respectful of the estimating system.
Slide 35
Strategy Start
Slide 36
Strategy to winning more profitable work. Position (Market)
Project People Product / Service Price Production Profit
Slide 37
To achieve consistent profits you must: know your costs
understand your costs, and control your costs. You cannot begin to
accurately price your products or services without knowing your
cost.
Slide 38
Price Structure Contract Price Total Cost Direct Cost
LaborLabor Mat l. Jobsite OH Work Item Cost Gen & Admin.
ProfitProfit SubsSubs EquipEquip
Slide 39
Understanding Risk & Pricing Old Way Costing Labor$50,000
Material$70,000 Equipment$7,000 Subcontractor$76,000 Other$3,000
Total$206,000 Overhead & Profit 25% $51,500 Total Bid $257,500
New & Improved Costing Labor$50,000 Material$70,000
Equipment$7,000 Subcontractor$76,000 Other$3,000 Total$206,000
Multi-Overhead Allocation Labor Burden 21.0% $10,500 Project Site
Overhead 5.0% $10,825 Subtotal$227,325 Home Office Overhead 10.0%
$22,7336 Profit 5.0% $12,503 New Total Bid $262,560
Slide 40
How Time In Construction is Spent Opportunities for improvement
Planning makes actual installation more efficient Other activities
such as site movement, material logistics, general non- productive
time and rework is minimized 64%Installation 36% other
activities
Slide 41
The Average Construction Day DESCRIPTION %HOURS/DAY Study
Plans3%0.24 Material Procurement3%0.24 Receiving &
Storage3%0.24 Mobilization5%0.40 Site Movement5%0.40 Layout &
Marking8%0.64 Actual Installation64%5.12 Cleanup3%0.24 Breaks
Non-Productive6%0.48 TOTAL DAY 100%8.00
Slide 42
Look at 176 Man-hour Month Where can we improve? DESCRIPTION %
HOURS/ MONTH Study Plans3%5.28 Material Procurement3%5.28 Receiving
& Storage3%5.28 Mobilization5%8.80 Site Movement5%8.80 Layout
& Marking8%14.08 Actual Installation64%112.64 Cleanup3%5.28
Breaks Non- Productive 6%10.56 TOTAL MONTH 100%176.00 For one
employee approximately 63 hours per month is spent on activities
other than actual installation . approximately 760 hours per year
for that one employee.
Slide 43
$45,619 per year If you have 4 full-time field employees paid
at $15 per hour Thats why I talk about productivity in the
estimating processes for both field employees and equipment.
Seminar Tip Use accurate rates and reduce idle time.
Slide 44
Cost Summary The Estimators View Direct Costs Direct Labor
Equipment Materials Subcontractors Other Direct Costs Labor Burden
Rate (%) Indirect Expense Rate (%) Gross Profit $$$ General &
Administrative Rate (%) (Company Overhead) Profit Rate (%) Bond
Rate (%) Total Cost : $$$ Company Income Statement The Accountants
View Revenue $$$ Cost of Sales Direct Labor Equipment Materials
Subcontractors Other Direct Costs Indirect Costs Labor Burden Other
Indirect Gross Profit $$$ General & Administrative Expenses
Income Before Taxes $$$
Slide 45
Margin vs. Markup Job Profit and Loss Statement Sales . $
700,000 Less COGS ... 507,000 Gross Profit . 193,000 Less OH ..
175,000 Net Profit.... 18,000 As a % of Sales 100 % 72 % 28 % 25 %
2.6 % Markup As a % of Direct Cost 138 % 100 % 38 % 34.5 % 3.6
%
Slide 46
Basic Cost Summary % of Revenue Revenue $ 700,000 100.00 Labor
120,000 17.14 Material 300,000 42.86 Equipment 75,000 10.71 Subs
12,000 1.71 Overhead and Profit 193,000 27.58 Expanded Cost Summary
% of Direct Costs Revenue$ 700,000136.72 % Direct Costs Labor
120,00023.44 Material 300,00058.59 Equipment 75,00014.64 Subs
12,0002.34 Other Cost5,0000.98 Total Direct$ 512,000100.00 Job Site
OH Labor Burden$ 40,0007.81 Supervision 75,00014.65 Total Job Site$
115,00022.46 Total Cost Input$ 627,000122.46 Gross
Profit73,00014.26 Overhead55,00010.74 Profit $ 18,000 3.52
Slide 47
Why is it so important to know what costs belong to each job?
Accurately measure profitability To determine what amount to bill
To support change orders or claims Financial performance (banker,
surety, etc.)
Slide 48
1.Only bid what you do best - specialize and focus on certain
types of projects, in specific locations, for certain types of
customers 2.Define the ideal project size - increase your
effectiveness and become more competitive 3.Seek negotiated jobs -
and never bid or propose on projects against more than three
quality competitors. Do not become a "'too busy, low profit"
contractor 4.Develop accurate job costs - The only variables
between the bid and the completed project should be overhead and
profit markup. Bid Strategy
![Piecing it all together[1]](https://img.pdfslide.us/doc/110x75/5593f88d1a28aba1088b46d5/piecing-it-all-together1.jpg)