Raising the Bottom Line

Panel Discussion About Overcoming Obstacles Wows Our Staff

Posted by Susan Gorham on Thu, Jun 14, 2018 @ 08:28 AM

Gross Mendelsohn Womens Initiative Panel

Members of our team listened with rapt attention as four of Maryland’s finest business leaders spoke about their paths to career success during a recent panel discussion on women’s leadership here at Gross Mendelsohn.

Panel members included:

The program was organized by Gross Mendelsohn’s Women’s Initiative.

The paths these remarkable women took weren’t without enormous personal and professional roadblocks, sacrifices and low points. While they overcame quite different obstacles, they have one thing in common: each woman poured a huge amount of grit and perseverance into achieving their goals.

female business leaders from Maryland

L-R: Jackie Browning, Brooke Iley, Natalia Luis and Lisa Renshaw

Speaking of grit, one of our panelists even slept in her parking garage during the winter to make her business work. When Lisa Renshaw took over a failing parking garage near Baltimore’s Penn Station at age 21, she was unable to afford employees yet needed an attendant around the clock. Lisa moved into a tiny room in the garage, using a carpet remnant for a bed and a kerosene heater for warmth. After three and a half years of determination, spirit and grit – and fending off rodents and shoveling snow at 4:30am so customers could enter the garage – Penn Parking opened a second location. The rest, as they say, is history. The company has been lauded for its creativity and innovative marketing strategies in an otherwise traditional industry.

Chris Haiss, CPA, a partner in the firm’s Technology Solutions Group, reflected on the common thread that wove its way through the stories of the panelists, including Jackie Browning, vice president of business development at American Cedar & Millwork. “As Jackie said, strive to be the best you can be in your chosen field and be persistent.” Chris went on to share her own observation: “Accomplishments require grit. It is HARD work!”

Jackie Browning

Standing: Jackie Browning

Linda Pietras, our director of human resources, walked away from the panel discussion with a key piece of advice: “Be the best in your craft and gender doesn’t matter.” Brooke Iley, a partner at law firm Blank Rome, described how this steely mentality helped her break through barriers early on in her legal career. Brooke is a labor and employment attorney.

Brooke Iley

Brooke Iley

Marie Calabrese, a CPA in the firm’s audit and accounting practice, said Brooke’s story resonated with her. “It was inspirational to hear how Brooke was promoted to partner while seven months pregnant. It’s great to see examples of women out there who are balancing having a family while achieving career success. Sometimes, it can feel like women have to choose one or the other.”

“Stay joyful” was a simple yet powerful message that resonated with Lisa Johnson, CPA, a principal in our audit and accounting practice. Natalia Luis, chief operations officer and co-owner of M. Luis Construction Co., stressed the importance of staying joyful and centered in all aspects of life, both personal and professional. Natalia shared unbelievable stories of setback after setback as she and her sister, with whom she owns the business, struggled to keep M. Luis afloat as so many others were shutting their doors when the economy sunk a decade ago. They came out on top after many would have given up.

Gross Mendelsohn team at womens initiative panel

Members of the Gross Mendelsohn team listen to the panelists

Lisa Johnson expressed the sentiment that everyone who attended the panel discussed echoed when she said, “I was impressed with the confidence of these women as they built their careers and faced so many challenges.”

Natalie Luis Jackie Browning Lisa Renshaw Brooke Iley

L-R: Natalia Luis, Jackie Browning, Lisa Renshaw and Brooke Iley

We owe a huge thank you and bravo to these inspirational women for sharing their memorable stories.

Women's Initiative Mission

Tags: business owners, leadership, women in business

Construction Industry Outlook Might Not Be As Rosy As Contractors Think

Posted by Jeff Johnson on Tue, Jun 12, 2018 @ 08:34 AM

construction industry market outlook

Every year Gross Mendelsohn takes the pulse of Maryland’s construction industry in the form of a survey. As this infographic shows, 70% of contractors reported being more optimistic about the construction industry in 2018 as compared to last year. While that upbeat feeling is reassuring for those working in and around the industry, the stock market may be foreshadowing something a little different about the outlook for the remainder of 2018.

When we dug further into the results of the 2018 Maryland Construction Industry Survey, we saw a big similarity between contractors’ perception of the industry today and what’s projected to happen in the overall economy: the rate of growth is slowing down.

construction industry optimism for 2018

In 2017, contractors reported being a whopping 78% more optimistic than they were in 2016. That’s a 28% increase over the prior year! This year, while the vast majority of contractors remain optimistic, that number dropped by nearly 10% in the last year.

Similarly, the U.S economy is projected to cool down in 2018. That’s not to say we see a weak or sluggish environment, but economic growth forecasts suggest GDP (Gross Domestic Product) will moderate from its current 2.9% annual pace to 2.4% by year end.

As our investment team recently reported in our blog post, Investment Outlook: Is the Stock Market Peaking?, the projected slowdown in the economy is already contributing to a bumpy ride for the stock market. While we don’t know exactly how rough the road will get in the short-term, our economic model does not see conditions that would indicate a recession is around the bend.

Additionally, an escalation in trade tariff rhetoric between the U.S. and China is concerning. Markets had cheered the passage of the Tax Cuts & Jobs Act and reduction in regulations, but a trade war between the world’s two largest economies would be a massive headwind (pothole?) for global growth.

What’s Ahead for the Construction Industry?

Although construction spending is expected to remain strong in 2018, the amount of growth is projected to be a bit more subdued. For instance, commercial spending should expect a 4% increase, which is less than half of last year’s forecast.

There are divergences within the industry as well. Commercial construction should see the biggest potential increase in starts while industrial could see the biggest decrease. As an example, recent announcements in Baltimore include a mixed-use development in Port Covington, as well as the expansion of the entertainment district with a new Topgolf facility and the soon-to-be-revived concert hall, Hammerjacks.      

Tax reform is expected to have a positive impact on the construction industry in 2018, as lower corporate tax rates would seek to encourage investments in construction and stimulate more manufacturing activity.

On the flip side, labor constraints combined with rising inflationary pressures on commodities and materials pricing will continue to impact profit margins. According to the Maryland Department of Labor, the construction industry workforce is projected to grow just 0.7% from 2017 to 2019. Growth varies by segment as illustrated in the table below.

Maryland Short Term Workforce Construction Industry Projections (2017-2019)

Does Your Construction Company Have a Financial Roadmap?

Regardless of current or future market conditions, your business should have a financial roadmap that positions you for success in the long term. Our team can work with you to develop that roadmap. Contact us online or call 800.899.4623 for help.

About Jeff Johnson

Jeff JohnsonJeff is the managing director and partner at GGM Wealth Advisors, an independent SEC Registered Investment Advisor and investment arm of Gross, Mendelsohn & Associates. He is a member of the firm’s investment committee and has over 18 years of financial industry experience. Learn more about Jeff.

 

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Tags: construction, investments, 2018 Maryland Construction Industry Survey, Jeff Johnson

Strategic Planning: 11 Steps to Developing a Strategic Plan

Posted by Richard Wolf on Thu, Jun 07, 2018 @ 07:38 AM

Strategic Planning Steps

When it comes to strategic planning, there are several key steps that organizations must prepare themselves for. Strategic planning is the formal process of determining an organization’s long term goals and identifying the best approach to take to achieve those goals. This usually involves key people in an organization, sometimes with the help of outside advisors, who analyze the organization’s strengths, weaknesses, opportunities and threats.

Here are 11 steps to developing your organization’s strongest strategic plan to date:

1. Decide who will be involved

Determine who will participate in the strategic planning process. You should consider including:

  • The management team
  • Board members
  • Key staff members
  • Other stakeholders (significant donors, customers, etc.)
  • Outside professionals (attorney, CPA, consultants, etc.)

You should also start to consider who will facilitate your organization’s strategic planning and form any relevant committees.

2. Determine the scope

Scope deals with the length of time that is covered by the strategic plan and how in-depth the plan will be. Some plans are scoped for one to two years, others five to ten years in the future. Some include only top-level initiatives while others include detailed action plans. Scope may be dependent on a variety of factors like:

  • Is the marketplace stable or highly-dynamic?
  • When was the last strategic plan completed?
  • What are the expected outcomes of the plan?

3. Determine a timeline

Part of keeping your organization accountable during the strategic planning process includes determining a timeline. You must identify any time commitments and deadlines for the strategic planning process at the beginning of the process.

Also, don’t try to tackle your strategic planning at a regular board meeting. Expect to allot at least eight hours for at least one strategic planning session. 

4. Choose a facilitator

While you might be tempted to handle your organization’s strategic planning process internally, hiring a strategic planning facilitator is essential to getting the most out of the process. You need someone who is unbiased and able to bring fresh insight and outside perspective to the development of the plan. Check out this blog post for six qualities to look for when hiring a strategic planning facilitator.

5. Plan ahead

To ensure your strategic planning will be thorough and comprehensive, you must be prepared to plan ahead. You should have an expected outcome for your strategic plan before you start the process.

6. Coordinate the logistics

As part of the preparation for your strategic planning session(s), you must be able to identify:

  • The time and location of the strategic planning session(s)
  • The participants who will be involved
  • Who will lead the facilitation
  • Your organization’s priorities given the time constraints

7. Conduct the strategic planning session(s)

The strategic planning sessions are the meat of your strategic planning process. During these session(s), you will discuss:

  • Organization history
  • SWOT analysis, including current challenges from an internal and external perspective
  • A collective organizational vision for the future
  • Developing action steps to meet that vision

 8. Develop a written planStart watching this on-demand strategic planning webinar for nonprofits

With the input gathered from your strategic planning session, your facilitator will prepare a draft of your strategic plan. This is one of the most vital steps of the strategic planning process because it will serve as the written document of what was discussed in the strategic planning session(s).

9. Seek approval by the board

To get buy-in on the strategic plan from your organization’s board of directors, you should present the written draft of your strategic plan at a board meeting. While the board shouldn’t reinvent the plan you’ve already developed, you want to solicit their comments and feedback before finalizing the plan.

10. Implement and monitor the plan

After all your hard work, it’s time to implement your strategic plan. At this phase, your board and committees should be using the plan as a guide for their day-to-day activities and short- and long-term goals. The plan should be referenced and reviewed at meetings. You can also review the plan during your employee onboarding process in order to communicate organizational goals to your new staff.  

11. Update the plan

Strategic planning isn’t a one-time thing. The general rule of thumb is that a strategic plan should be renewed every five years, but certain organizational changes may signify a need for a new plan sooner than that. Check out this blog post for seven signs it may be time for a new strategic plan.

Where do I start?

When undertaking the strategic planning process – whether it’s your first or fifteenth – you may want to catch up on some strategic planning need to knows by reading some blog postswatching a webinar, or better yet, sitting down with an expert who can help you figure out how and why a strategic plan will benefit your organization.

Tags: nonprofit, strategic planning, Richard Wolf

5-Point Checklist for Responding to a Bad Review About Your Construction Company

Posted by Steve Ball on Fri, Jun 01, 2018 @ 01:57 PM

Checklist for Responding to Bad Review About Construction Company

Responding to a bad review about your construction company can be difficult. It’s natural that criticism of you, your business and/or your employees can sting. However, bad reviews aren’t always bad for your business. There is value in the candid feedback of customers, and even though it may bruise an ego or two, business owners who take and learn from the feedback in reviews can better their business overall.

First and foremost, you must publicly respond to bad reviews. Silence is not golden when it comes to negative feedback, and you must respond to the review to either:

  1. Remedy the situation – in the case that the reviewer’s comments are true
  2. Explain the situation to other reviewers – in the case that the reviewer’s comments are false

Here’s a checklist to help you respond to your company’s next bad review:

1. Take a day or two to cool off and figure out how true the reviewer’s story actually is. During this time you should:

  • Ask any involved employees their side of the story
  • Evaluate whether your company has heard similar complaints in the past
  • Consider asking someone more impartial to respond to the review (pick someone who is strong in written communication)
  • Familiarize yourself with the reviewer’s relationship with your company, the cost of the affected job, etc.
2. After you’ve cooled off, it’s time to draft your review response. Your response should include:
  • An acknowledgment of the reviewer’s issue/comments
  • If applicable, a quick recap of the research you’ve already done (though keep any personal details like job costs confidential given the public forum), to show you’ve taken the complaint seriously
  • An explanation of what happened from your company’s perspective
  • An apology, if necessary, and your plan to rectify the situation
  • Your contact information so the reviewer can reach out to you personally
3. Get at least one other person to look at your draft before you post the response.

4. Check back in a few days to see if the reviewer responded to your comments and answer any follow-up questions and/or comments.

5. If the issues raised in the review were legitimate, consider sharing the review with your company’s employees so the same issue can be prevented in the future.

To see the whole thing in action, check out this example review and response:

 



Janice

Janice (reviewer):
★★

We recently received some pretty disappointing service from A&B Remodeling. The foreman guaranteed us that our bathroom remodel would be done by June 5, but the project was delayed twice, and the whole thing wasn’t even wrapped up until June 18. There was very little communication about these delays along the way, and we ended up having to share our master bath with some out of town guests in mid-June because of the hold-up. Not cool!


Construction Avatar

Billy (company owner):

Thank you for your comments, Janice. First and foremost, let me apologize for the poor communication on our behalf over the course of your bathroom remodel. I spoke with the foreman assigned to your account, and he explained the delays were due to an unexpected shortage of the tile you requested. Regardless, all issues should have been more adequately communicated to you along the way.

As a result of yours and other’s comments, we have decided as a management team that we will be pulling in all of our employees in the next month for training on client communication, and you can be sure we will use your story as an example of where we need to do better.

I know it won’t change the inconvenience you experienced, but I’ve asked our accounts receivable department to discount your final invoice by 10% in the hopes you do business with us again. Please contact me at 555.555.5555 with any questions.

 


 

Other marketing and business development tactics

To learn what other Maryland construction contractors are saying about their company’s marketing and business development tactics, download a free copy of the executive summary of the results of the 2018 Maryland Construction Industry Report.

Need more help managing online reviews?

Check out this blog post on smart strategies for managing your construction company’s online reviews.

2018 Executive Summary

Tags: Steve Ball, construction, 2018 Maryland Construction Industry Survey

Nonprofit Board Management: Tips from Board Veterans [Video]

Posted by Ernie Paszkiewicz on Tue, May 22, 2018 @ 07:43 AM

Managing the board or serving on the board of a nonprofit can be tough. To help, we asked three members of our nonprofit group — Ernie Paszkiewicz, CPA; Lisa Johnson, CPA; and Richard Wolf, CPA — about their experience working on various nonprofit boards.






Meet the panel

EJP.jpg

Ernie Paszkiewicz, CPA is an audit partner at Gross Mendelsohn. He has over 38 years of experience working with nonprofit organizations throughout the Mid-Atlantic region. Ernie currently serves on Towson University’s accounting advisory board as well as the board of his alma mater, Archbishop Curley High School.

LBJ.jpg

Lisa Johnson, CPA is an audit principal at Gross Mendelsohn. She has 16 years of experience in nonprofit audit and accounting. She currently serves on the board of Community Law in Action (CLIA).

 

RLW.jpg

Richard Wolf, CPA, CGMA, CFE, CVA is an audit principal at Gross Mendelsohn. He has worked with nonprofit organizations for over 20 years. Richard currently serves on the University of Baltimore Accounting Advisory Board, Loyola University Maryland’s Accounting Advisory Board and Beth Tfiloh Dahan Community School’s Board of Trustees.



Panel Q&A

What do you wish you’d known earlier as a board member?

Lisa: Fundraising is so important. The board has to be highly involved in fundraising and committed to it, and board members really help the nonprofit through their fundraising efforts.

Ernie: Make sure that the organization you're working with is one that you can make the time commitment to. There may be a substantial time commitment with being on the board, with meetings and being on various committees, and it’s really important that once you make the commitment to be on a board that you fulfill the time commitments.

Richard: Ask questions. It’s really important to ask questions, especially if you are new to a board. You might come into a situation where you don’t have all the history and background, and it’s important if you don’t understand something to ask those questions.

How can a board chair help an unengaged board member?

Ernie: I’ve seen situations where board members maybe aren’t fulfilling their responsibilities. One of the things I always tell the board chair in those situations is really to make sure that you sit down with the person, make sure they really are going to make the commitment, and if they can’t, just explain to them that it’s okay for them to remove themselves from the board so you can get someone in a position that can help the organization.

Richard: Communicating and being up front is extremely important. Why is that person not pulling their weight? Do they feel disengaged? Do they feel not part of the process? Are they not excited about the role they’re in? Do they feel that their skill sets aren’t being used properly? These are all things that really need to come out to understand why an individual is not engaged.

How can board members work better with management?

Lisa: The board needs to govern, and they need to be able to do their job. So they need the information that’s required. They need to be able to ask questions, and the executive director needs to be able to handle the day to day operations and feel like the board is confident in that person’s abilities.

Ernie: There might be things from an operational standpoint that you may not like or agree with how management is doing it, but it’s up to management to fulfill the actual implementation, and it’s up to you as a board member to set the direction of the organization.

Richard: A lot of times you’ll sit on the board and the answer to a question will be, “Well that’s the way it’s always been done." As a board member you need to push back on that because sometimes the way that it’s always been done isn’t the right way or isn’t the way it should be done going forward.

 



Build a better board

Board engagement and recruitment is an ongoing and major challenge for many nonprofits. For do's and don'ts on board engagement, check out our free on-demand webinar on building a better board. This webinar covers: how identify the right (and wrong) board members for your organization, ways to improve board accountability, simple strategies to boost board engagement and more! Start watching the webinar now or contact our Nonprofit Group at 800.899.4623 with any questions.              

webinar-board-management-nonprofits-watch 

Tags: Ernie Paszkiewicz, Lisa Johnson, nonprofit, Richard Wolf

Tax Credits & Incentives for Maryland Construction Contractors

Posted by Scott Handwerger on Thu, May 17, 2018 @ 09:35 AM

tax credits for Maryland construction contractors

If you’re a business owner or CFO, the idea of leaving money on the table is cringe-worthy. Tax credits and incentives offer the opportunity to lower your construction company’s tax burden, dropping more money to your bottom line.

If your construction business isn’t taking advantage of every available tax savings opportunity, you’re missing out. Many construction contractors, however, aren’t aware of some Maryland and federal credits that could generate substantial tax savings for them.

Credits vs. Deductions

Let’s make one distinction before looking at some of the most attractive tax credits.

Tax credits are not deductions. They’re dollar-for-dollar reductions on taxes owed.

1. Research & Development (R&D) Tax Credit

One federal tax credit that is commonly missed by contractors is the IRC Section 41 Research and Experimentation Tax Credit, better known as the R&D Tax Credit.

Most contractors miss the R&D Tax Credit either because they don’t know about it, or because they believe it doesn’t apply to them.

The R&D Tax Credit encompasses more than just research. It also includes the development of new processes, techniques, formulas and design of new projects. A contractor who begins to use a new process to improve the way they do things may qualify for the tax credit. The R&D Tax Credit is a dollar-for-dollar reduction in tax liability that can be carried forward up to 20 years.

For contractors qualifying for the R&D Tax Credit, there is also a credit against regular Maryland tax for businesses that incur qualified research expenses within the state.

The total amount of credits depends on the amount of eligible expenses incurred, with a limit of $12 million for all Maryland businesses that apply. To claim the credit, a contractor must submit an application to the Department of Business and Economic Development by September 15 of the year following the taxable year in which the expenses were incurred. If the Maryland R&D Tax Credit exceeds the tax imposed for that year, the credit may be carried forward up to seven years.

2. Enterprise Zone Tax Credits

Maryland contractors located in economically distressed communities throughout the state are eligible for local property tax credits and state income tax credits under the Maryland Enterprise Zone Program.

To qualify, contractors need to determine if they are located in one of the 36 eligible enterprise zones or two focus areas. Contractors located in enterprise zones can claim a 10-year credit against local real property taxes on a portion of real property improvements. The credit is 80 percent of the assessment increase during the first five years. The credit decreases 10 percent annually thereafter to 30 percent in the tenth year.

Along with the real property tax credit, Maryland contractors located in an enterprise zone may claim a one-year or three-year credit for wages paid to new employees in new positions. The general income tax credit is a one-time $1,000 credit for each qualified new worker filling a position in an enterprise zone; the credit increases to $1,500 if your business is in an enterprise focus area. For economically disadvantaged employees, the credit increases to a total of $6,000 per worker over a period of three years, while the credit is $9,000 per worker over a three-year period in an enterprise zone focus area.

3. Energy and Environmental Tax Credits

There are four energy and environmental credits available in Maryland:

The Clean Energy Production Credit is equal to $0.85 for each kilowatt hour of electricity that your business produces from a qualified energy source. The credit may not exceed $500,000 annually or $2.5 million over a five-year period.

The Green Building Tax Credit is available for specified costs for construction or rehabilitation of green buildings and certain equipment that meets energy efficiency and environmental standards.

The Maryland Mined Coal Credit is $3 for each ton of Maryland mined coal that the co-generator purchases in the taxable year in excess of the number of tons of Maryland mined coal that the co-generator purchased in the calendar year 1986.

The Solar Energy Grant Program offers a credit to businesses for acquiring and installing photovoltaic property and solar water heating property.

4. Heritage Structure Rehabilitation Program

Formerly called the Competitive Commercial Tax Credit, the Heritage Structure Rehabilitation Program allows owners of income-producing properties in Maryland to earn a state income tax credit for renovating historic buildings. The program offers a tax credit up to 20 percent of eligible expenses, up to a total of $3 million.

Are You Taking Advantage of All Available Tax Credits and Incentives?

The number of federal and Maryland tax credits available to contractors is constantly expanding and changing. With increasing tax burdens on contractors, the time has never been better to take advantage of these tax credits.

Contact our tax department online or call 800.899.4623 to learn how these and other credits can help your construction business add more money to its bottom line.

2018 Executive Summary

Tags: R&D Tax Credit, tax, Scott Handwerger, construction, tax credits

Maryland Construction Contractors Remain Optimistic in 2018 [Infographic]

Posted by Steve Ball on Tue, May 15, 2018 @ 07:04 AM

Between the recent presidential election, a pickup in the economy and an abundance of new work, construction contractors remain hopeful for the future. This trend continues from 2017, when Maryland construction contractors reported record levels of optimism for the year ahead.

The following infographic highlights outlook and trend data from the 2018 Maryland Construction Industry Survey. If you'd like to view a larger copy of the infographic, click here. And hey, did you know you can get more data like this in a free 11-page result summary from the 2018 Maryland Construction Industry Survey?

2018 Construction Survey Outlook and Trends Infographic

Get more data

For more data and insights from the 2018 Maryland Construction Industry Survey, download a free 11-page summary of the survey results.

2018 Executive Summary

Tags: Steve Ball, construction, 2018 Maryland Construction Industry Survey

7 Common Sense Employee Retention Strategies for Construction Contractors

Posted by Steve Ball on Thu, May 10, 2018 @ 09:19 AM

construction company employee retention strategies

For three consecutive years, construction contractors in Maryland have reported that finding and retaining good employees is their #1 concern.

In fact, according to our 2018 Maryland Construction Industry Survey, the number of contractors who ranked employee recruiting and retention as their top concern jumped from 64% in 2016 to 75% in 2018. That’s quite an increase!

With many Maryland contractors reporting a large backlog of work in 2018, this jump is not surprising. As contractors battle to find, manage and complete new projects, a construction company’s ability to retain its best employees is paramount to success.

 employee retention is top concern for construction contractors

If you’ve ever been tasked with hiring new employees, you know what a time consuming process it can be to identify candidates, interview them, check references, complete the necessary paperwork, and train them. And if you’ve ever had to deal with an employee’s poor job performance – and maybe even terminate them – you might be ready to throw your hands up when it comes to managing personnel issues. HR is no walk in the park.

All of this points to employee retention playing a key role in your company’s stability and profitability.

Wouldn’t it be nice to worry less about, and spend less time on, finding and hiring new employees? When you can spend more time securing new projects, fine-tuning your bidding process, and giving your customers five-star treatment, you’re winning.

That’s why we put together a list of common sense employee retention tactics for construction contractors.

1. Give feedback to employees after every job.

More than a third of Maryland contractors indicated they don’t give feedback to employees after each completed job.

Say what?

construction employee feedbackA key attribute of high-performing employees is their desire to know how they are doing, and what they need to do to improve. Using a short, to-the-point construction job employee evaluation form can make it easy to quickly document job performance notes, review them with your employees, and give them advice on how to improve.

Get more data on the state of Maryland's construction industry.

In addition to giving your employees feedback on their job performance, we recommend that you also communicate expectations before each job starts.

2. Ask employees for feedback on YOU.

Just as it’s meaningful for your employees to get job performance feedback from you, it’s worthwhile to ask your employees how YOU are doing.

Here at our own firm, we conducted an upward feedback survey of our supervisors and upper level managers. Our staff was asked to evaluate the supervisors and managers with whom they work most often. Their written feedback, which was collected anonymously through an online survey tool called SurveyMonkey, was given to our supervisors and managers so they could better understand how they are performing in their leadership roles, and how their leadership style is perceived by staff members.

upward feedback survey

The survey asked employees to evaluate their managers on things like communication skills, training ability, and tendency to give (or not give) useful feedback. The survey also invited employees to share ideas for how a specific supervisor could improve.

While an upward feedback survey can make a company’s management team a little uncomfortable, the benefits of knowing how employees – especially the top performers you don’t want to lose – perceive you far outweigh the risk of a little short-term discomfort.

3. Reward your best employees with salary increases.

This sounds like a no brainer, but you might be surprised to hear that nearly 20% of Maryland construction businesses gave NO salary increases in the last 12 months.

Yet for the third consecutive year, Maryland contractors have said money is the #1 reason why employees leave their company.

salary is top reason construction employees leave

We’d be remiss if we didn’t advise you to keep salaries competitive. If time and time again, employees tell you they’re leaving because they found more money elsewhere, maybe it’s time to rethink your pay scale.

On a related note, continue to offer good medical, dental and profit sharing plans. Our 2018 Maryland Construction Industry Survey showed that contractors are largely offering stronger benefits packages than they did in 2016.

4. Have a succession plan and be (at least somewhat) transparent about it.

In the past, keeping a company’s future plans hush-hush behind closed doors was the norm. But today, employees – especially high achievers – want to know about their employer’s road map for the future, and their role in the company.

While it might not make sense to divulge every last detail about your company’s plan for the future, let your employees know that your company HAS a future. If you’re a 67-year-old sole owner of a home building company, your employees, particularly your more experienced employees, are most likely wondering what the future holds for them. If they assume you’re just going to sell the business and retire, they might jump ship to what they perceive to be a more secure position.

If, on the other hand, you tell that same employee that you’ve identified your lead project manager (a well-liked and long-time member of the company’s management team) as your successor, it’s more likely that the employee will stick around for the long haul. Even better, you’ll tell that employee about the time frame for the leadership transition, and explain how it will impact him or her.

Being open about your future plans can go a long way to keeping your best employees engaged and loyal to your company.

5. Give your employees a sense of purpose through community service.

Roughly 75% of employees say teamwork and collaboration are “very important” to them, according to a report by ClearCompany.

Company-sponsored community service projects offer a way to boost teamwork and collaboration outside of the normal day-to-day grind. Most importantly, community service projects give employees the opportunity to feel like they are part of something bigger than just an HVAC repair job, a road crew or a drywall project.

Community service is clearly an important pillar of this Maryland construction company’s corporate culture:

community service for construction companies

I can personally attest to the value of company-sponsored volunteer projects. For the last seven years our firm has offered structured community service opportunities to employees. The vast majority of our staff – from administrative personnel through partner level – participate in organized community service projects. Whether it’s sorting food donations at the Maryland Food Bank, cleaning kennels at the Maryland SPCA or serving hot meals at Paul’s Place, volunteering together builds camaraderie among our team members, who in turn, feel good that their firm is doing something good for the community.

Bonus! Participating in community service projects can also offer leadership development for your staff, not to mention the opportunity to create goodwill in your community.

6. Offer leadership training.

About a quarter of Maryland contractors said they were either “doing poorly” or “have no leadership development programs or initiative.” (2018 Maryland Construction Industry Survey)

If you’re among those construction companies that could be doing better when it comes to developing future leaders, there are a number of things you can do to improve:

  • Talk with your top performers about their career path. Ask where they want to go within the company, and help them carve a path to get there.
  • Send your top performing employees to leadership training outside of your company. The Maryland Center for Construction Education & Innovation and Maryland Construction Network are resources for various types of training.
  • Ask your best foremen and supervisors to mentor your most promising up-and-comers. There is often no better training than on-the-job training.
  • Offer training on soft skills, which often go overlooked when you also need to train your employees on technical skills. But it’s often the “soft” skills like communication, conflict resolution and teamwork, that build future leaders.

7. Share successes within your organization.

When is the last time you took a moment to celebrate your company’s success? More important, when is the last time you celebrated a success WITH your staff?

When you’re going from job to job, analyzing your company’s latest numbers or putting in a last-minute bid, it’s easy to forget about communicating your successes to your team.

Take a few minutes to let your employees know about your wins. Tell them about a new job you just won or a positive online review from a customer. It’ll help your staff understand where new business comes from (and perhaps feel more confident about generating new business on their own), boost morale and make them feel proud about their company.

Start Focusing on Employee Retention Today

Even if you implement one or two of the employee retention ideas above, you’ll be headed in the right direction. For advice about how to keep your best employees happy, contact us online or call 800.899.4623.

 2018 Executive Summary

Tags: Steve Ball, construction, employee retention, 2018 Maryland Construction Industry Survey

The One Word That Can Make Your Construction Business More Profitable

Posted by Steve Ball on Thu, May 03, 2018 @ 08:44 AM

one word that can make your construction business more profitable

Yesterday I presented the results of our 2018 Maryland Construction Industry Survey to members of the Maryland Construction Network.

As I analyzed the results of our annual survey to prepare my presentation, one theme kept cropping up: construction contractors would benefit greatly by saying “no” more often. “No” to certain jobs, and “no” to certain customers.

It’s Hard to Turn Down Work

When a new project presents itself, it’s hard to turn it down. As business owners, we’re hardwired to go after new work and close every deal. While it’s good to be entrepreneurial and aggressive in growing your business, it’s not always smart to take on every new project that comes your way.
 
Why? Because some jobs just aren’t going to be profitable. And – I’m not going to win any popularity contests for saying this, but I’m being honest – some customers aren’t going to be good for your business. Let’s dig into those two items a bit.

When to Say “No” to New Work

Thankfully, the outlook for Maryland’s construction industry is looking bright. The data from our 2018 Maryland Construction Industry Survey reflects contractors’ optimism. In fact, 70% of contractors said they thought the construction industry’s outlook is better for 2018 compared to last year. That’s a 20% boost from just two years ago, when only 50% of contractors said they felt optimistic about the industry’s future.

construction industry optimism for 2018

With more projects available today than in the past ten or so years, it’s time for contractors to be more selective in the work they choose to take on.

Click here to download our burdened hourly rate calculator!

When evaluating whether to take on a job, ask yourself:

  • Do I have the staff, experience and time to meet the customer’s expectations?
  • Will I actually make money on this job? (Pro tip: you have to understand your fixed and variable costs before you submit an accurate bid. This burdened hourly rate calculator will help.)
  • Do I have the time to spend on upfront project planning before the job starts? (Pro tip: you make most of your money on upfront planning.)

The first step toward profitability is knowing when to walk away from a project before it even starts. While it’s tempting to cave to a customer’s request to lower your prices, know the value of your work and what it’s worth. It’s better to walk away from a job than to lose money on it.

When to Say “No” to Customers

Can we talk about the elephant in the room?

Anyone who has been in business for more than a few months knows what it’s like to deal with difficult customers. One thing I have learned in my 30+ years of working with clients is that it only takes one bad client to do a lot of damage to my most valuable asset: my team of talented employees.

One of the joys of being a business owner is developing lasting relationships, some that evolve into friendships, with clients from all walks of life. But every once in a while, a client can wreak havoc on morale.

Over the years I’ve severed ties with a few clients who have run my staff into the ground for various reasons, including using disrespectful language around my employees, being perpetually tardy for meetings, and employing nefarious business practices. While it goes against our nature to “fire” a customer, does it really make sense to continue a relationship that isn’t mutually rewarding, profitable and respectful?

When a client’s behavior repeatedly wears down my employees, it’s time to say “no” to the client. That’s not to say my employees aren’t expected to work hard and deal with difficult situations and people. But when the same customer never shows up for meetings or verbally abuses my employees, it’s time to say “enough” as a business owner.

Saying “No” Has to Be a Strategy

Knowing when to say “no” has to be a strategy for making your construction business more profitable. If you’d like help understanding your company’s profit margins, identifying fixed and variable costs, submitting accurate bids and evaluating jobs, contact us online or call 800.899.4623.

2018 Executive Summary

 

Tags: Steve Ball, construction, business owners, profitability, 2018 Maryland Construction Industry Survey

Why Every Construction Business Should Have a Facebook Page

Posted by Susan Gorham on Tue, Apr 10, 2018 @ 08:33 AM

Facebook for construction business.png

According to our 2018 Maryland Construction Industry Survey, less than half of Maryland contractors have a Facebook page. The more important statistic, though, is that a third of contractors don’t use social media at all to promote their business. And, the majority of those contractors say they have no plans to start.

So what's a contractor to do?

which social media platform should my construction company use.png

Among the top concerns of Maryland construction contractors are (1) finding and retaining good employees (75%) and (2) finding new business (36%). Building an online presence can help you combat both of these challenges. Social media is one online tool that help you attract new employees and new customers.

There are plenty of reasons why contractors might not want to use social media to promote their business. Here are some of the objections we’ve heard from contractors:

  • It takes too much time to manage a social media account.
  • It’s too risky to put myself out there publicly.
  • I worry about getting a bad review online.
  • Social media is a fad. Why waste time on it?

First, let’s just get this out of the way: social media isn’t a fad. It’s here to stay. If you are interested in getting found by customers and prospective employees, it’s worth your time to use social media for your business. And it’s worth the risk of getting a bad review.

We won’t argue that the idea of setting up and managing a social media account for your business can sound overwhelming. But it doesn’t have to be. There are so many social media platforms to choose from: Twitter, Instagram, Facebook, LinkedIn and many more.

We propose that you pick one social media platform for your construction business. The key is to manage that one social media page really well.

Our pick for construction contractors is Facebook.

Let’s take a look at how your construction business can benefit from having a Facebook page.

1. It’s easy to use, even if you’re not tech savvy

Facebook is pretty intuitive. If you don’t already use it for your business, you might be among the millions of Americans who use it personally, perhaps to share pictures of your children, pets or latest cooking creations. While a business page is a different format than your personal page, the principles of managing a business page are similar. If you know how to share your aunt’s recipe for peanut butter fudge, you can manage a Facebook page for your business.

Discover other tactics Maryland contractors are using to promote their business.

Even if you’re not super savvy with technology, you can setup a business page in minutes and then build it over time. There are plenty of resources online that offer step-by-step instructions for setting up a Facebook page, like these:

How to Build a Facebook Page for Business: A Guide for Beginners (Social Media Examiner)

14 Essential Tips for an Engaging Facebook Page (Hubspot)

How to Create the Ultimate Facebook Business Page (WordStream)

Create a Page: A Step-by-Step Guide (Facebook)

2. It’s visual: you can showcase your projects

When a prospective customer is looking for a home remodeling contractor to build her dream kitchen, she most likely hops online to look at pictures – pictures of rich cabinetry, granite counter tops, big islands with seating for four, farmhouse sinks, pendant lights and well, you get the idea.

As the saying goes, a picture is worth a thousand words. Sharing pictures of your latest projects, like a recent kitchen remodel, garage door installation, landscaping project or freshly painted home, is easy.

This home remodeling contractor uses before and after photos to showcase their projects:

before and after

The same contractor gets bonus points for using video in addition to photos to give prospective customers a virtual tour of their projects:

video of construction project on Facebook

3. Your customers can write reviews (and you can respond to them)

Customer reviews are powerful, especially in the construction industry. Thanks to some unscrupulous contractors out there, more than a few consumers have been burned and are leery about hiring contractors.

While there is always a risk of getting a bad review, you should ask customers to review your work on websites like Angie’s List and Yelp. Facebook business pages allow customers to leave a review as well.

When a customer takes the time to review your work, be sure to thank them and acknowledge their review. A simple comment is all it takes:

example of good review on Facebook

And, in the event you get a less than favorable to review, it’s not the end of the world. Even though it’s tempting to ignore a bad review as if it never happened, that’s the worst thing you can do. There are ways to respond to a bad review about your construction company.

4. You can add a face and personality to your business

People do business with who they like and who they can relate to. What better way to attract customers and quality employees than to show your personality online?

Facebook, and other social media platforms for that matter, offers an easy way to put a face on your business and show what your business stands for.

This contractor shared some fun pictures from their holiday party and thanked their employees for a good year. This is the kind of thing that could make a potential employee say, “I’d like to work for a company like that.”

showcasing fun work culture at construction business

If you are struggling to find and keep good employees, as so many Maryland construction businesses are, this kind of post on Facebook can help make your business much more appealing than your competitor who doesn’t have any kind of online presence.

Some businesses share their community service projects on their Facebook pages. Seeing that 64% of millennials won’t take a job if a company does not have a strong sense of corporate social responsibility, business owners are wise to not only participate in community service projects, but feature them on their Facebook page (or website or other social media platform), as this contractor does:

community service project at construction company

5. The number of your customers and employees who are online is growing

When people need information, they go online. Sure, they talk to people they know. They might ask their neighbor for the name of the contractor who built their deck. But chances are, they’ll hop online to look for more information, like reviews from other customers, a Better Business Bureau rating and pictures of other decks.

If you are a business owner who didn’t grow up in the age of the internet, remember this: a growing number of your prospective customers and employees have grown up in the internet age. In fact, millennials – born between 1981 and 1996 – make up a quarter of the U.S. population and in 2018, according to an article by Forbes, millennials will have the greatest buying power out of any generation.

You want to be where your target audience is: online, and a Facebook page for your business can get you there.

6. You can manage it from any mobile device

 It’s easy to manage your company’s Facebook page with your mobile device, whether you are out in the field or waiting for your child’s baseball game to start. An app called Facebook Pages Manager, available for both Apple and Android devices, makes it incredibly easy to monitor your page, respond to reviews, share links and post pictures.

7. It’s free

Building a website usually costs some money. Most of us have to rely on a website developer to create an effective website. But that’s not the case with a Facebook page for your business. While it takes some time for you to create the page and manage it day to day, it’s completely free.

While Facebook does offer advertising for businesses, it is well within your reach to have success with Facebook without any paid advertising.

The Next Steps

Once you build a Facebook page for your construction business, the worst thing you can possibly do is nothing. Be active on your page. Post pictures, respond to reviews and comments left by customers, and share helpful tips. For example, if you are an HVAC contractor, share tips for homeowners about how frequently filters should be changed, how often an HVAC system should be serviced, and how to keep an outdoor compressor unit clean.

This concrete contractor, for example, tells its customers how they can qualify for LEED credits by having a concrete parking lot:

concrete leed credits

When you are busy serving customers, it’s easy to forget about your company’s Facebook page. We recommend assigning one person within your company to manage your Facebook page. That person should be a trusted employee who uses good judgement, knows your business fairly well, and uses good grammar and spelling. In addition to being responsible for posting content to your Facebook page, that person can get notifications from Facebook whenever someone leaves a comment or review, and respond quickly.

It’s time to get started! If you have questions about how to use Facebook for your construction business, contact us online or call 800.899.4623.

2018 Executive Summary

Tags: construction, 2018 Maryland Construction Industry Survey