2013 BUSINESS PLANA business planning report for discussion, implementation, and management of key business initiatives.

Prepared by: Artis Brazee

Outline

Communicating the plan

Work Flows

Meetings

Defining roles and structures

Key hires

Form a board

Communicate the PlanWhy?

• Create buy-in (you are good at communicating enthusiasm and quality; however, this is about hard work and doing something new and unique).

• If your staff isn’t fully bought in you will have limited success.• Secondly, and more importantly – “building on a strong foundation” is your byline. CREATE that

strong foundation.

How to create buy-in• Admit the problems• Praise your staff• Ask for help – communicate your need for them• Present a clear and compelling plan• Make the plan happen – you will drive a culture of process producing results if you focus on it and

produce for your staff.

Overview• Consider a lunch or pizza meeting with all at present• Have a simple written plan to handout• Make it positive – talk about growth/the next phase of the business. Make a “new” starting point.• One of your four Company website highlights is “professionalism”. Center your attitude and

comments around that idea.

Communicate the Plan – Nuts and Bolts

Give them an overview of where your head is and what you discovered then drill down into the broad categories. Don’t be too detailed.

Talk about roles and responsibilities

•What problems were caused – give example•How are they going to be fixed

New hires/staff

•Talk about the need for senior project management role•Talk about the need for a controller role•Talk about office manager role•Talk about timing for all three•Talk about how roles and responsibility will change

Discuss the need for additional workflows and how you need them involved in the design process

•Discuss one good workflow you’ve put in place•Give one example to illustrate problem and possible solution (this is one or your most important items and what will affect them the most so really emphasize both)

Introduce the meetings

•Discuss how it will help you and the overall purpose•Ask your staff to make you accountable – how? (this came up as one of the larger issues which you need to address)

Set up a celebration (of sorts) when you’re finished. You’ll never be “finished”, so you’ll have to figure out the goal posts. Tell them! Make it happen.

The Effect of One Poor PM Process

• If it is done correctly a SOV can positively affect your cash flow. The government will usually push back on pay apps, so if your SOV is loaded upfront and sufficient to cover billings this pushback won’t hurt the relationship. You have some room to negotiate rather than pushing the customer (and the relationship) on percentage complete. Breathing room on cash is an important business necessity.

Cash Flow

• Things run smoothly when the subcontractor’s billing matches the work they’ve accomplished. When sub’s have trouble with cash flow, you have trouble. If it is their fault it is not your problem to fix; however, if you’re pushing back against legitimate billings there will be issues. Extra meetings, delays, and additional costs were all evident is Thursday’s late meeting and are typical.

Subcontractor Billing

• You cannot recognize total possible revenue and thus profit with subcontractors’ under-billed. This hurts your equity and thus bonding capacity.

Recognized revenue

• Surety looks at under-billing more than any other financial indicator. They universality dislike under-billings and you will have to have answer to them in the future. Plus, you can’t burn off your bond line and use it to capture additional profits.

Bonding

• The PM has difficultly managing their time anyway – there simply aren’t enough hours in the day. Creating a problem because of a poor SOV is an entanglement that distracts too many people. Now both the PM and the owner have to spend time to fix something that shouldn’t be a problem.

Time management

It is illustrative to examine the recent effect of a poor “Schedule of Values” (SOV) – really a poor SOV process - on your entire operation (we’ll discuss). The customer’s SOV is one of the most far reaching documents in Federal construction contractor’s toolbox. It obviously controls the billing with the customer. Billing affects the following:

Work Flows

Begin as many WFs as you and the staff can EFFECTIVELY

take on. Don’t overload –

“underload”.

Involve each person that touches the information

and put one lead person in

charge•Meeting minutes•Documentation•Organization

Manage but don’t dictate. You must be present and

VERY engaged –

don’t miss the meetings.

Hold your lead accountable

and have your lead hold

others accountable.

Finalize each process – finish it.

Schedule a meeting at some future time once the workflow has

been used sufficiently and

evaluate it. Tweak if necessary.

Meetings

Philosophy • Remember that that your doing more

than just communicating…passing information. The purpose is to change the current communication style (yours and the office), to put some accountability into the organization and to free you up to manage. Evaluate yourself often.

Rules• Don’t miss the meetings. If you have to

reschedule, do so early. Make sure your staff know they are the most important part of your business – they are!

• Be prepared…prepare notes during the meeting and again that night on what you need to accomplish at the next meeting. Review the night before the next meeting. Be disciplined. If you are, your staff will know that the meeting is important.

• Don’t start strong and stack off – be consistent and thus create a consistent organization.

• Evaluate the timing...hold meetings regularly, but not too often so time is not wasted.

• Hold people accountable from meeting to meeting. Create lists, to do agenda – whatever works – with dues dates and ongoing reporting for long-term issues/projects/problems.

• Have occasional meetings over dinner or a long lunch.

• Bite your tongue between meetings if it can wait.

Defining Roles & Structure• This is your most ambiguous and difficult need

• I think the best approach is to do “easy” or defined work first• Evaluate and rewrite job descriptions

• You have a TERRIFIC start• Use your staff to help you rewrite their own job description.• Don’t make job descriptions and forget about them. Make it an active process.

Put on your HR hat whenever you address who’s doing what.

• MANAGE TO THEM – make this your basic management tool with staff and make a habit of hauling the descriptions out.• (This is something you’ll have to work on. Obviously, in a small business,

everyone wears many hats. However, you need to define those to the best of your ability and stick to them.)

• Begin with the office manager and Kathy

Key hires

Aztec’s most urgent need is the

implementation of project

management controls and

financial controls/reporting provided by new

hires.

There is no question these are needed; however,

insufficient revenue exists to support two positions and they don’t exist in-

house.

It is difficult to determine which

one to put in place first, but it is

possible – here’s how...

RISKS to a business are simply THREATS. In any

situation (war, survival, sports, etc.) one always addresses the greatest threat. Aztec should address their

greatest threat.

Aztec’s greatest threat lies in PM controls. This is where you will

bleed. A controller will generally tell where you are bleeding, how

badly, and when it will stop. However,

they can’t really control it.

Putting robust PM controls in place will best minimize the threat. Deal with the greatest

threat first.

THREAT

Key hires – cont.

With regard to addressing threats, two things that need to be done as soon as possible are:• Good project controls• Get year-end awards off to a

good start

However, getting an Operations person in place will likely not be

accomplished quickly – really we don’t know.

I think this fact dictates an interim solution.

Short-term Considerations

Gov’t end of year is

coming. The most important

business need in the

next two quarters is the owner doing what he does best – selling

to Gov’t customers generating

new revenue.

• How can we accomplish freeing up your time to accomplish the work we’ve outlined and manage the business?

• You and I can discuss. It is possible I could help for three months. This would get the revenue in the door and get a good start on the things you need to do.

• A potential plan for operations follows next page – thoughts?

The office environment is

a serious operational

impediment to staff wellbeing, professionalism, hiring, and communicatio

n. A top priority is changing

these dynamics.

• Right now, all I believe you can do is investigate the possibilities.

• Put a conceptual budget in place.• Establish the timing.

Potential Plan for Operations

Operations

End probation period with Pete, or keep him on a temporary basis

Move Rigo to estimating (if feasible/possible)

Immediately advertise for a PM

Temporary Operations Manager while looking for permanent hire

Concentrate the owner on Business Development (New Revenue)until

October 1st and our work list immediately.

Form a Board

• Think about who you admire – for whatever reason and talk to them about what you want to do.

• Develop a clear picture of what you might want a board to do – define a purpose.

• Find someone to help you – perhaps a business professor. The better you define the role and need the better result you will get.

• Find people who will challenge you and expose your weaknesses.

• Make your board diverse – finance, business, HR, construction, and something unique.

• Include bonding agent, insurance agent, banking• Meet four times a year• Make yourself accountable (a servant) to the board

Be what your goals are – if you

want to build a large

business, act like

one.