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Columns

Distress Calls For Help

By Paul Ridilla
May 1, 2009
Do you have everything you need to ensure your company’s survival?



Miracles do happen. On Jan. 9, an airplane that encountered a flock of birds landed in the Hudson River. All 155 passengers and crew were saved before the plane sank, thanks to Captain Sullenberger and his crew. In his humble address to the nation, Sullenberger simply stated, “We did the job we were trained to do.” Is your entire crew trained to do the job for the company’s survival and future success?

The passengers and crew also owe their amazing survival to the rescue ships’ rapid response. You should look carefully at all of the people around you with the resources, ability and willingness to assure the company’s survival.

But you cannot just sit and wait for their responses, nor do you need a mayday, SOS or 9-1-1 call. As you analyze your predicament and their individual potential to help, you need to meet and discuss mutual benefits.

Ask Your Peers: A good start would be getting involved in your local PHCC chapter or other contractor association available in your area. We always call this rubbing elbows with your peers.
    1. This provides many different aspects of pending problems as well as potential solutions.

    2. You can offer to assist with other contractors’ efforts by subbing items of work to them or from them. You can also share manpower and equipment. Most outsiders think contractors who bid against each other are enemies, since they have never attended an industry chapter meeting or convention.

    3. Your involvement with the association gives it a stronger voice and more power to represent you and your needs to government authorities.


Ask Your Financial Partners

Your next distress call would involve all those who could help assure your financial stability. Here again, you want to meet and discuss mutual benefits. But keep in mind that they need you as badly you need them.

  • At the top of this list is your general contractor or construction manager on major projects. He or she will greatly appreciate your efforts to help collect their monies as fast as possible. This especially involves value-engineering, beating job schedules, proper documentation with change orders, maintaining job logs, and completing punch lists and warranty work rapidly. The GC cannot pay you until he receives his money on that project.

    You should also discuss - even negotiate - late payment penalties, processing change orders as that work occurs, payment for stored items and retention.

  • You should always negotiate and maintain a positive credit rating with more than one bank or lending institution. Keep in mind that they are competitors and need your business.

  • Likewise with all of your suppliers. You should agree on credit time extensions and always meet your commitments. Their credit terms will enhance your bidding power.

    You should always ask for value-engineering and cost-saving substitutions for each bid. You also need to establish a fair and equitable policy for returns of unused equipment and materials.

  • Monitor your premiums for all surety and other insurance you provide your employees. You can meet with several agencies to discuss your exposure and possibilities for better rates.

    Naturally you need to promote and enforce OSHA’s safety standards to prevent costly accidents and lower your experience rate modifier.

  • All of this effort should be shared with your bonding agent to maintain the highest possible bid capacity.

    Unfortunately, many contractors feel embarrassed to approach any of those potential benefactors, when they are actually flattering that individual. Asking for their opinion and assistance shows them how much you respect their position and power. This is most effective when communicating with your own family, friends and employees.


  • Ask Your Employees, Friends & Family

    Your employees are definitely in the best position to insure your survival and continued success. They know about, or at least suspect, what you might need. You should meet one-on-one with each employee to discuss what you feel they could contribute and ask for their opinions and suggestions.

  • Your service manager should review old customer invoices to refresh his or her memory of what type of maintenance or upgrading those customers might need. Your phone call to that customer would be appreciated and, ideally, create a service call and a maintenance contract. This “We are worried about you” strategy also works very well with previous projects that your company installed.

    Your service techs should use a simple checklist on every customer’s system to survey possible needs for upgrading, maintenance, repairs or replacement. The checklist used by auto repair shops will give you a good idea of what works for them.

  • Your jobsite supervisors need to value-engineer every task and control wasted time and materials. Discuss flex-time opportunities, piecework, 6-8-10 daily ratings and database skill inventory for training certified craftsmen.

  • Your office and management team need to monitor your written and posted chain of command, update “scope of work” job descriptions, and consider the benefits of work-at-home, virtual office concepts.

  • Discuss any problems or potential delays with monthly billings or collections on change orders and retention.

    Do not avoid talking business at home with your family. Here again, they know about or at least suspect what you need and would proudly offer opinions and valuable assistance.

    Likewise with your close friends. Remember that old saying: “A friend in need is a friend indeed.” Any one of your friends might know of a potential customer, supplier or agency that could help strengthen your position.


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    Ridilla

    Questions? Need help? Call Paul at 407/699-8515, on his cell at 407/467-4916 or e-mail him (reference Plumbing & Mechanical magazine).

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