Qualified Remodeler Magazine

OCT 2014

Qualified Remodeler helps independent remodeling firms to survive, become more professional and more profitable by providing must-have business information, namely best business practices, new product information and timely design ideas.

Issue link: https://qualifiedremodeler.epubxp.com/i/397642

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Page 59 of 67

I n part two of this series in the June issue, p. 46, we discussed one of the three principals of PAT, which stands for Prevention, Avoidance and Transference of Risk. This segment will focus on Prevention. We discussed Avoidance first because that takes a certain amount of risk off the table. Now we need to reduce the risk we can't avoid by implementing philosophies of risk prevention. These ideas are not new; the challenge is always in the implementation: This is where we struggle! EXPLAIN THE RULES OF THE GAME Each of us as builders has our own rules we need to commu- nicate to our customers. We typically do this by means of a written agreement. Although agreements should include all that legal stuff, you cannot for- get, in the process, to explain how you play the game. Having a written contract is crucial to risk prevention, but having one that actually explains, in simple lan- guage, your rules, processes and policies is priceless. Take time to explain your contract, especially your rules. You would be sur- prised how many problems can be eliminated by mutual com- munication and understanding. GET IT IN WRITING Whether it is with your custom- er, trade contractor or supplier, take the time to get it in writ- ing. Signed contracts, change orders, work orders, scopes of work, bids, work authorizations and the like save mistakes and misunderstandings. They also hold us accountable. I don't like mistakes, but looking at a piece of paper that says we messed up is much better than having a customer tell me so. When it's in writing I can man up and say, "You're right; we'll fix it" without any argument or heated discus- sion. Likewise, most customers when reminded they signed and agreed to it will support the writ- ten evidence. KNOW AND BUILD YOUR STANDARDS There are many levels of qual- ity in the construction industry. Problems occur when you have not defined your quality stan- dards and expectations. Once you have defined those standards, you must constantly train those standards and not allow deviation. Make sure your people are properly moti- vated to hold to the standards. Ensure your customers know and understand your quality standards. If they have in their mind another quality standard — one slightly better than you provide — you can count on a conten- tious relationship during the building process. PROPERLY MOTIVATE YOUR TEAM I once made the mistake of com- pensating superintendents for a small walk-through list thinking they would work hard to have the house ready. Most did, but some just created the alternate list; the one not submitted to the office that contained the real items needing repair. This, of course, caused problems and placed our brand at risk. Proper team motivation to support pas- sion for your culture, mission and values is key to risk preven- tion. You can't be everywhere all the time. Your team must have your same commitment to everything you stand for and be motivated properly. TRAINING IS KEY There are so many things build- ers need to know. Whether it is building codes, safety or your SOP, training is critical for us as builders and our team mem- bers. A continual focus on train- ing will help prevent risk and provide consistency throughout your company. Too often we allow the business of the day to push blocking out time for train- ing to the bottom of the list. As we ignore or plan forward train- ing, our ability to prevent risk deteriorates. ENFORCE QUALITY AND SAFETY I recently moved into a new home and new community. It is the first home I've not built myself. As I watch the builders in the community, I'm amazed at the risk they assume by not enforcing the simplest of things. Most of these builders are friends. I know they want to build quality products, but I see installation from their trade contractors that are fast but not correct. I see safety issues that put their entire company at risk. Taking the time to teach through enforcement may be the best improvement we can make in preventing risk. These are but a few of the key elements of prevention. Take a minute and find one or two areas of prevention you can improve on in your company. QR Implement business philosophies for risk prevention 60 October 2014 QR ForResidentialPros.com PROFITS: On Your Business | By J. Bradley Simons Photo © iStockphoto/Thinkstock J. Bradley Simons has more than 30 years' experience in managing construction companies. Brad is past president of the Utah Valley HBA and a licensed real estate broker. Currently, Brad is CFO of Magleby Construction and vice president of the Utah Valley Habitat for Humanity. He has served more than 15 years on NAHB's Board of Directors. Part 3 of a 4-part series

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