The Builder Upper Show Ep. 34 feat. Scott Kimpland from FMI Corp

You know, there's no way at that point you can back up and recapture that planning that could have been done or should have been done.

So he's just kind of he's only able to fight fires and react at that point.

Right.

So the pre planning is is, you know, is a really big one as well.

The third the third one that I'll throw in there.

which I've learned a lot about, FMI's learned a lot about the last few years, but if you look at our most operationally successful clients right now, one of the characteristics that we have seen the last few years, especially as the market's been pretty good, is their discipline and rigor around being able to say no to a good customer with a bad opportunity for a bad project and and so it's that ability to be disciplined on which projects you choose to pursue which ones you say no to that's really hard for a contractor to do is to turn down an opportunity but if for example It's an opportunity that requires an A team to manage it.

Maybe it's a big, complicated, fast-paced job and your two A teams are already tied up on existing projects that are gonna be ongoing.

You might not have the right team to manage that job, right? It probably behooves you to, really question, should we pursue this thing? Or it's a good client that's trying to get you to a specific price and the economics just don't work.

You've gone through, you know your direct cost, you've got a good estimate and you just can't get to a price that's going to work for you.

But the ability to say no to a bad opportunity with a good client, or I guess say no to a bad opportunity with a bad client as well, right? But the ability to be selective in your work acquisition, we are finding is something that really differentiates the best of the best from kind of the average contractors out there.

I guess I could assume or guess that, that the opposite would be the mistakes, but I guess I would rather hear it directly from you.

What are some of the most common operational mistakes that you see contractors make that hold them back?

Yeah, the one thing that we see that probably gets more contractors just in trouble is it goes back to that project selectivity.

It's focus on top line revenue versus bottom line profitability.

You know, a good example, you walk into somebody's office, Lou, and you see, you know how ENR does, what is it? Their top 600 specialty contractors every year and their top 100 general contractors.

And you see these plaques hanging in their lobby.

And last year they were number 247 on the ENR 600 list.

And one of their goals this year is, hey, we're going to get to 225.

But they get real focused on top line.

And Doc Fales, our founder, used to do a famous speech.

It's still talked about today.

And the title of the speech was Volume Kills, Profit Thrills.

But if you talk to anybody that's been in the bonding banking industry around construction for a long time, They will tell you that many, many more contractors get in trouble having too much work than having not enough work.

And, you know, reflecting on that, I've been in this business right now coming up on 39 years.

I cannot ever remember a company I've worked with that went out of business because they did not have enough work.