Masonry Magazine June 2007 Page. 51
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Business is a Game of Calculated Risk
MASONRY NEWS CONTRACTOR TIP
To get to where you're going in business, you must have a high tolerance for taking chances and managing risk. Unfortunately, if you are not willing to take a risk, it isn't likely you will go far. Here are a couple of my crazy, reallife stories that demonstrate the risk factor.
My wife, Donna, and I took the kids on a vacation to Disney World in February. On the way home from vacation, we stopped at a restaurant with a rear deck overlooking a pond where the kids could feed the fish. As my three, little girls were feeding the fish, it became obvious that the bigger fish were coming closer to the shore to get the fish wood. By coming closer to the shore, the bigger fish were taking an increased risk (calculated risk), and therefore were rewarded more by becoming much larger. I thought to myself, "A perfect example of what taking chances does. Those willing to take the most calculated risk get the bigger rewards."
How about taking a risk by borrowing money from the banks? We know there is a chance we may not be able to pay it back, but we do it anyway.
Mark Mondo, a friend of mine, helped me make sense of this situation. Mark has two, very successful businesses, two airplanes and a jet helicopter. So if I need to go somewhere quick, he is usually willing to take me. While we were talking about his planes and my newly developed five-hole private golf course and airstrip he had just landed on, we were discussing how we both had to take on a lot of debt to get to where we were in life.
Mark said "You know, guys like us just can't do things the way they're supposed to be done to get ahead in life. The right way is to reinvest the money we make back into the company to help it grow. The problem with doing that is that it would take us 200 years to get where we are going, and we can't live that long." He went on to explain, "We only have this 30-year window to make our money before it is time to retire. Therefore, we have to borrow money from the banks to fund this tremendous growth so we can do it quicker."
That pretty well summed up why we must borrow from the banks to finance growth. If we solely rely on what we have to reinvest back into the company, it just can't be done fast enough.
Are you thinking you are going to reach the highest mountains without taking any risk? Think again! You will need to take many chances based on calculated risk to take your company even further. When you are looking at taking chances, anytime the upside gain is bigger than the potential downside loss, go for it!
Of course, you must be honest with yourself, set your own goals, do your research and work your butt off! But if you do these things and take the risk, you will be rewarded even more for your efforts.
Damian Lang is the author of the book "Rewarding and Challenging Employees for Profits in Masonry." To order a copy of his book or to attend his seminar held specifically for mason contractors, call Kerri Huck at Lang Masonry, (800) 417-9272.
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if it is not authorized in writing before the work begins. In essence, this means that a client can tell you to do the work, sign your ticket, and still not pay you. How's that?
You look at your signed ticket, and you see that the superintendent wrote on it, "Verify hours only," or words to that affect. That's legal-speak for, "Hey, I agree that your crew spent hours doing that work, but I don't agree that the work was not in your contract. I was asked to verify that the work was done, and that's all I did. I never said it was extra work; I just told you that you needed to do it. Sorry!"
Sorry? It's not right! It's not fair. I object! I've been, shall we say, violated! Settle down, team. Because right now we're going to learn a play that we can run, which will avoid a lot of this. And it's simple. It's so simple you'll just about slap yourself in the head, and wonder why you didn't think of it yourself.
When your client or the superintendent tells you to do some "extra work," wants you to do it T&M, and promises to sign your ticket afterwards, here's what you say: "Love to help you. We'll get right on it. But first, your office needs to fax over to my office a note or send an e-mail telling us to do the work, and the note needs to say that it's extra work. Your contract documents require us to do things this way before starting your work. Sorry for any inconvenience!"
Now, when your office bills your client for this extra work, as shown on the signed ticket you have, your office can reference the note or e-mail stating the work was "extra."
It only takes a moment longer to do things this way to protect yourself. A hassle? Maybe. But if you ever get into an argument with your client, or into arbitration, or into a courtroom battle over an issue like this, would you rather have just the signed ticket, or the signed ticket plus the note authorizing the "extra" work? And the cool thing? You didn't even have to write the note!
Put this to work for your company immediately, and see how much grief and money it saves you.
Gary Micheloni is a working project manager, consultant, speaker and author of the new book, "Get Paid for a Change!" For further information and insight on the Full Contact Project Management approach, simply send an e-mail to: coachgary@fullcontactPM.com.
Copyright © 2007, Gary Micheloni and Full Contact Project Management
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