Streetwise Subbie's July 2018 'Wise up Wednesday' Every StreetwiseSubbie 'Wise up Wednesday' email from this month
Author: Barry Ashmore
Construction in Crisis? BBC Radio 4 Construction in Crisis? File On 4: 8:00pm Tuesday 10 July 2018. As a specialist contractor I would encourage you to tune in to this in depth programme on Radio 4 to which StreetwiseSubbie.com contributed background information. Here’s a link to the programme; Construction In Crisis Here’s an edited version of the BBC blurb; “In January, Britain’s second biggest construction rm, Carillion, spectacularly collapsed under a £1.5 billion debt pile. Thousands of jobs were lost, pensions were put at risk, and around 30 thousand smaller subcontractors, who’d already completed work on projects, were left being owed a total of £2 billion.
A report by MPs slammed the government contractor’s ‘rotten corporate culture’, claiming those at the top treated suppliers with ‘utter contempt’. There was also a stark warning that a similar collapse could happen ‘again, and soon’. Has anything changed six months on? File on 4 investigates an industry treading a nancial tightrope – a world of huge turnovers but tiny pro t margins, spiralling debts and late payments. Alistair Jackson speaks to subcontractors who say they’re still working in ‘a climate of fear’, and are being pushed to the brink, nancially and emotionally, by their bigger construction counterparts.”
Construction in Crisis? BBC Radio 4
Construction in Crisis? BBC Radio 4 Subbies Are Still Being Ripped Off Almost every day another Specialist Contractor contacts us to get our help because his account has been clobbered by the Contractor or one of the big Specialist Contractors they are working for. Set O and Payless Notices are the weapons of choice of today’s Contractors, and they can be pretty devastating for your business! You’ve done the work (or at least the vast majority of it), the Contractor owes you a tidy sum, (because his undervaluation has been mounting up), and that’s when you are most vulnerable. As a Sub-Contractor getting paid at this point could mean the di erence between survival and insolvency!
Published: 04.07.18
Construction in Crisis? BBC Radio 4
Payment - The Smoke and Mirrors Whilst the industry is facing a whole host of issues, payment is far and away the biggest and most divisive issue. As a Specialist Contractor the simple truth is that if you don’t get paid, you don’t have a business. If you spend most of your time trying to get paid, you have less time to address all the other issues that need your attention, and as for planning for the future, you probably can’t think beyond the end of the month. So, why are we as an industry failing to recognise this and why isn’t it being properly addressed? Regrettably, it is such a major problem and such a controversial issue that even when it is discussed, the truth seems to be largely absent. Here are some facts Streetwisesubbie.com recently supported a piece of statistically signi cant academic research. With some 502 respondents, its ndings cannot be ignored. Some 354 of the respondents were Sub-Contractors, and over 70% of respondents had a turnover exceeding £1 million. Proper rms are facing very real problems. Here’s what the survey uncovered:
Payment - The Smoke and Mirrors
Payment - The Smoke and Mirrors A total of 87.17% of Subcontractor’s main issue of dispute was regarding payment, compared to 64.21% of contractors suggesting Contractors receives payment within the agreed terms more frequently than their Sub-Contractors. Even on public sector projects, only 25% of Subcontractors were paid on time, and on private sector projects that fell to just 15%. Subcontractors were subject to set o on 88.7% of their projects, and between 9% and 34% (depending on turnover) said they were subject to set off on every project! So, what’s to be done? A staggering 95.66% believed that neither the government nor the trade bodies were doing enough to tackle the problems in the industry! So, I say let’s start by cutting out the spin, and the BS, and the smoke and mirrors! Lots of Contractors don’t pay their Subcontractors properly. What’s difficult about saying that? Everyone knows what good payment looks like! Pay on time and value fairly. The Supply Chain Payment Charter isn’t even legally enforceable, never mind the fact that only a handful of major Contractors have even signed up to it! The Duty to Report on Payment Practices legislation (requiring large companies to report on their payment practices) are so woolly that they won’t tell anyone anything. Those companies that engage in such practices certainly won’t be reporting on their under-certification and wrongful set off.
Payment - The Smoke and Mirrors
Payment - The Smoke and Mirrors Why does it matter? Here are a few recent headlines to contemplate: ‘ Suppliers and subcontractors are owed around £2bn by Carillion’ Subbies and suppliers owed £7bn in unpaid invoices’ ‘Subbies owed £4m after Titan Construction Management collapse’. ‘Subbies under attack from new breed of aggressive QS’. Published: 11.07.18
Payment - The Smoke and Mirrors
Don't tender for any jobs at any price This week’s Wise Up Wednesday looks at one of the most e ective things you can do to nd more quality sales leads, and it’s not as di cult – or expensive – as you may think. Not too long ago it cost a Client or Contractor time and money to send out tender information about a project. Through advances in technology, this can now be sent to any Specialist Contractor anywhere at the touch of a button. Which is why you need to be more savvy about the type, quantity and cost of the work you tender for. I have met Subbies that tendered for any work that came their way. At any price! This approach is not cost e ective and can cause more problems than it solves. It is far more cost-e ective to be selective and just go after the work that you want to do, where you want to do it. And this is not as di cult to nd as you may think. With a little organisation, investment and a proactive approach to the task, you could reap the benefits. How can this selective approach – that we know works for others – work for you? 1.
Research the market for the type of work you want to do
Firstly, you need to use a dedicated lead generation system like Glenigan to source and lter out the jobs you want to work on from the thousands of live projects out there.
Don't tender for any jobs at any price
Don't tender for any jobs at any price You can use Glenigan to access live data which enables you to be very speci c and tender solely for the type of work that suits you best, in the geographical area you wish to work. The huge range of data on their system makes it easy to nd the companies, speci ers, project managers, etc., working on each project and gives you all the information you need to make contact with them. And all this information is available to you, by county or for the whole of the UK. 2.
Make contact with the key decision makers on the project
Armed with information about a speci c project, which can be ltered by any stage of the planning process, you can introduce your business to the specification team. And don’t worry if a particular project has already been specified. The same people will be working on other projects that are not as advanced, which is your chance to get on the tender list for those projects. You can introduce yourself as a potential supplier, send more information about your business and start building your reputation with the specification team, from the client downwards if you wish. Initial contact can be made by e-mail, but it is far more e ective, to do this by telephone.
Don't tender for any jobs at any price
Don't tender for any jobs at any price 3.
Systemised telephone calling and follow up
Yes, it may well be di cult to reach the right person immediately, which is why it is important that you make this a regular process. A person may be away from their desk, on site, or on holiday, so make a diary note to callback and try again. Making sure that this is done without fail is the secret to making your sales campaign a success. You will also nd that, over time, you build a relationship with the speci er and that they start to contact you about projects they are working on. 4.
Keep a simple spreadsheet of sales activity
When you download the project data from Glenigan it comes in the form of a spreadsheet, with projects ltered by type, size, value, location, etc., as you require. You can then use this spreadsheet to keep a call record, adding new project information to it as you source more data. Soon you will start to see a return on your e orts, sales and pro tability, as you continue to target the type of work you want to do, where you want to do it! 5.
What if this sounds all too much to do for a busy Subbie?
StreetwiseSubbie can help you to do all of this. From sourcing the type of leads you want, to making the calls, record keeping and maintaining contact with live projects on your behalf.
Don't tender for any jobs at any price
Don't tender for any jobs at any price Your dedicated sales consultant will be the ‘face’ of your business, introducing you as an expert Specialist Contractor and maintaining contact with the specifier, passing on tender requests to you as they are received. We are doing this successfully for others, so it can work for you too! You can also see a free, no obligation, live demonstration of how the Glenigan lead generation system works, allowing you to understand how it pinpoints the most suitable leads for you. Once the Glenigan system is set up, StreetwiseSubbie will then extract the data you have identi ed and supply this to you on a weekly basis. Over time, this builds into a bank of valuable information for continued telephone calling and follow up. Call Logs are provided after each session and call dates, conversations and required actions are clearly detailed. All you need to do is then pick up the tender information and quote accordingly. 6.
Want to find out more?
For a free, no obligation online demonstration, using live data, where you can see in real time the quality of leads you can access, just contact us directly on 01773 712116 or e-mail me at tanya@streetwisesubbie.com We’ll then get in touch to set things up. And all at a highly competitive price, with preferential rates for existing and new StreetwiseSubbie Gold or Platinum Buddies! Published: 18.07.18
Don't tender for any jobs at any price
Construction Profit Warnings According to Ernst and Young twice as many pro t warnings were issued by FTSE construction and material companies in the rst half of 2018 as in the same period of 2017. Output gures from the O ce for National Statistics showed big falls in the value of construction work during the rst half of 2018, which many attributed to snow disruption in the first quarter. However, EY’s analysis found that only one out of the six of pro t warnings from FTSE construction rms attributed the under-performance to poor weather. In contrast, delays to work and general economic uncertainty were cited in four of the industry warnings. Challenges Ahead EY construction leader Ian Marson said: “With the outlook in question, it feels like a good time to take stock and think about how construction companies can improve resilience and meet the challenges that lie ahead.” “None of this is easy,” Mr Marson said, “but main contractor nances in particular are under much-increased scrutiny from funders and clients. The price of a profit warning could be very high.” Protect Your Interests This week’s Wise Up Wednesday looks at why you need to be more savvy about not only the type and quantity of the work you tender for, but also WHO you will be working for, and will they be able to PAY? Do not simply tender for any work that comes your way at any price!
Construction Profit Warnings
Construction Profit Warnings In every day life, you wouldn’t expect a complete stranger to walk up to you in the street and say “Hello lets start a relationship” and suddenly become their new best friends, so why is business any different? In every day life you are likely to be cautious at best, or maybe even head o in another direction as fast as you can. In business accepting a “strangers” approach is likely to lead to financial disaster for you! Choose Who You Work For OK, I accept that this is sometimes easier said than done. But, it must be done! There will always be other factors to take into account when deciding on whether or not to tender or get into contract with someone. Not least of which, will no doubt be your workload at the time. It is much easier to be selective in times of plenty. Being willing to place an order with you is only one small part of what you should be looking for in a relationship with a customer. In the context of collecting your money when it is due, what you really need to know is whether they will be ready, willing and able to pay when the money falls due. A customer who can’t, or won’t, pay is worse than no customer at all and a customer who takes too long to pay, makes unreasonable reductions or sets off money unfairly, is just as bad. Don’t Rely On Size Alone You cannot rely solely on the apparent size of the customer. Think Carillion!
Construction Profit Warnings
Construction Profit Warnings Not all large companies pay their debts on time or are nancially sound, and some national contractors are the worst payers of all. Think Carillion! And don’t assume that because the Manchester o ce of XYZ national contractor is a good payer, the same will apply to the Bristol o ce. A lot will depend upon the particular circumstances within that company and within each branch. Do A Bit Of Digging I would advocate making as detailed an enquiry as possible from other Specialist Sub-Contractors who have worked for this organisation. Ask about the culture of the organisation and whether or not they are helpful or unhelpful to their sub-contractors in respect of payment etc. Ask about individuals involved and whom you can and cannot rely upon. Ask how easy it is to agree interim applications, variations etc and whether or not they are prone to making reductions or set-o s. Most important of all, ask whether or not they always get paid on time. Don’t be shy about making these enquiries or that making these enquiries might cause o ence to potential customers. In well run, objective organisations nothing should be further from the truth and reputable companies will respect your professionalism. Research – Contact – Follow Up It is far more cost-e ective to be selective and just go after the work that you want to do, where you want to do it. And this is not as di cult to nd as you may think.
Construction Profit Warnings
Construction Profit Warnings With a little organisation, investment and a proactive approach to the task, you can reap the benefits. How can this selective approach – that we know works for others – work for you? Research the market for the type of work you want to do and lter out the jobs you want to work on Make contact with the key decision makers on the project and don’t worry if a particular project has already been speci ed. The same people will be working on other projects that are not as advanced, which is your chance to get on the tender list for those projects. Systemise your telephone calling and follow up, and, it may well be di cult to reach the right person immediately, which is why it is important that you make this a regular process. Keep a simple spreadsheet of sales activity and then use this spreadsheet to keep a call record, adding new project information to it as you source more data. What if this sounds all too much to do? StreetwiseSubbie can help you to do all of this. From sourcing the type of leads you want, to making the calls, record keeping and maintaining contact with live projects on your behalf. Your dedicated sales consultant will be the ‘face’ of your business, introducing you as an expert Specialist Contractor and maintaining contact with the specifier, passing on tender requests to you as they are received. We are doing this successfully for others, so it can work for you too!
Construction Profit Warnings
Win Work, Get Paid, Make Money! Call Logs are provided after each session and call dates, conversations and required actions are clearly detailed. All you need to do is then pick up the tender information and quote accordingly. Want to find out more? For a free, no obligation online demonstration, using live data, where you can see in real time the quality of leads you can access, just contact us directly on 01773 712116 or e-mail us at info@streetwisesubbie.com P.S. Please remember that we are here to provide solutions exclusively for Specialist Contractors. If you have a business problem, not sure what to do or just want a second opinion, then we are here for you. Please give us a call on 01773 712116, or email info@streetwisesubbie.com today. Published: 25.07.18
Construction Profit Warnings
Win Work, Get Paid, Make Money!
StreetwiseSubbie Exclusively for Specialist Sub Contractors in the Construction and Engineering industries. Please remember that we are here to provide solutions exclusively for Subcontractors. If you want access to professional solutions that work, then please give us a call on 01773 712116, or email StreetwiseSubbie.com today. StreetwiseSubbie.com Limited Shanakiel, 17 Ilkeston Road, Heanor Derbyshire DE75 7DR Tel: 01773 712116 Email: info@streetwisesubbie.com Learn more
Win Work, Get Paid, Make Money!