“I go by a saying,” shares David E. Schomp Jr., president and third-generation owner of Bean Inc. in Easton, PA. “You can’t do today’s work with yesterday’s information and be in business tomorrow.” Sure he’s an excavator, a site-preparation expert; but talk to him for a few minutes, and you discover he’s a business owner first. One who avoids the most common mistake small to midsize firms-from under $100,000 to more than $16 million in annual receipts-in all business sectors make.
“Almost all of the small to midsize businesses that come to us for help come too late,” concur directors of the Small Business Administration-supported Small Business Centers nationwide. “Unless you are an owner who is constantly willing to learn, aware that there is always room for improvement, you are risking eventual potential failure.” Unfortunately, they report, many owners are too proud, independent, or complacent to seek advice and grow their skills.
Among the grading and excavation contractors interviewed, many of the one- or two-man firms concede that there might be value in, but they never get around to, spending time expanding their business skills. Most of the midsize, family-owned firms surveyed engage in some type of training year-round, primarily that required by OSHA. Others go further and include training to grow other skills for themselves and/or their employees. Great idea, but who’s got the time? Certainly, time is tough to come by. But successful grading and excavation contractors dedicated to constant learning agree: Make sure you focus on firm-specific issues (every firm has challenges unique to them) and only do what works (e.g., information in small doses).
Given that many construction firms reduce operations over the winter, grading and excavation contractors have an excellent opportunity during this time to “up their organizations” by acquiring new management and business skills themselves and upgrading the job knowledge of their key employees. Eugene “Sam” Kospiah Sr., president of Kospiah Excavating Inc. in South Allentown, PA, and Eugene “Bumper” Kospiah Jr., construction supervisor, agree that winter offers a window of time for additional training for some firms, but not necessarily theirs. “We keep income flowing over winter via emergency work.water-main breaks, sinkholes, et cetera. And of course we spend much of our time in the winter doing major equipment repairs.” Schomp brings in winter income via commercial snowplowing. “I treat this income as ‘gravy’ and don’t budget it in; rather, I use it as windfall income to pay for extras like repainting equipment.” But he observes that because everyone is in one place focusing on repairs, winter offers an excellent window to squeeze in some winter training. “Winter’s the only time we’ll have two weeks where no one’s in the field,” Schomp points out. “Everybody’s here working on equipment. I might outline the year’s plan to everyone or catch employees up on missed OSHA training and so on.”
Topics: What You Don’t Know Could Hurt You
Grading and excavation contractors advise asking yourself some questions: (1) Who are you? A one-man/two-man operation, a family-owned firm, or a large commercial firm? (2) What’s your cycle? Year-round or highly seasonal? (3) How’s the market treating you? Are you the new firm on the block looking for a toehold or the established firm undercut regularly by young, hungry firms? (4) Where do you want to be five years from now? Your answers will uncover what information can deliver the biggest payback for the time that you and your staff are diverted from basic business operations.
“Ask me today what hat I’m wearing,” laughs Business Administrator Terri Hoffert of Kospiah Excavating. The company runs at a 42-employee seasonal high that typically gets reduced to 15 regular full-time employees in the winter. “A difficulty with our size is that it’s hard to stay on top of everything we need to know. Regulations: we aren’t big enough to hire a full-time attorney or a full-time safety director. Business management: we can’t afford a full-time payroll or controller. Basically, I do it all. I have to look for ways to get the information I need, to learn what I don’t know, get better at what I do, and stay on top of regulations that are constantly changing.”
Schomp’s firm operates with a high of 50 employees by Labor Day, with a low of 10 if the winter isn’t mild. “Keeping on top of how to stay competitive for long-standing firms like ours and new and/or smaller firms is critical. Otherwise the knife gets so sharp, sometimes it feels like it’s coming through your back. But that information will be completely different for each of us. The established contractor, operating primarily with owned equipment, definitely has the edge over the new contractor dealing with rental rates. As a consequence, new firms cut their rates to the bone so they can win bids-something we can’t do with our overhead. We’ve got the reputation, the better credit lines, and the trained long-standing staff, but we have to stay focused on how to stay price-competitive and on top of our game. The new firm’s got less overhead and is willing to risk profitability to grow market share but has to concentrate more closely on safety and delivering quality jobs every time-things we can take more for granted because of the track record of our staff.”
Only Do What Works: Short, Sweet, and MoreYou decide on critical topics to brush up on. Now, how do you educate without wasting your time or putting your key employees to sleep?
“The worst time to try to accomplish any training is immediately after lunch. Everyone’s been out in the hot or the cold; now they’re inside where it’s cooler or warmer, respectively. Most of them will fall asleep on you!” cautions Schomp. “But you can’t do it at the end of the day. Realistically, everyone just wants to get home. And morning is difficult because everyone wants to get something done, calls are coming in, and you’ll lose half your audience to emergencies. Try to do it 15 minutes after lunch. It won’t be perfect, but it’s the best option.
“Don’t be inflexible, don’t be boring,” continues Schomp. “Plan on giving any training session more than once. A lot of things will happen: someone might miss a week, and you have to make sure you catch up with people. We keep track of it all. Sometimes it means that an employee will go through a session more than once. We had one guy who went through once session three times, 15 minutes each time, for a total of 45 minutes. But that’s better than missing the information. I find they actually enjoy going to these things as long as they aren’t boring. I’ve been through some that are pretty dry. A trainer just droning on and on.”
Where to Turn For Help
Before you start, the need to have materials on hand to train or learn from is a given. Many sources and avenues exist.
Trade Organizations. Hoffert is a strong advocate of trade organizations. “Our trade organization, the American Subcontractors Association (ASA), focuses on the important issues we need to know about. It offers newsletters, extremely low-cost seminars in very convenient locations, and professionals on staff, legal, accounting, and insurance matters whom you can get counsel from. I really don’t know what I’d do without them-resources in a cheap and manageable form. For example, no one ever provides training on how to fill out all the forms you are required to maintain: unemployment, workers’ comp, et cetera. ASA gives me that kind of support. Workshops are very affordable, ranging from $40 for a first-aid course to $100 for a business-skills seminar. Many are free. Locally we have subchapter meetings and lunches with speakers. For $25 I can eat and learn great information. It can’t be beat!”
Trade Magazines. Trade magazines offer year-round training information and opportunities. Schomp talks about the ones he finds most useful. “I get a lot more out of someone else in my line of business talking about their experiences versus plain research: information on accidents they’ve been in and insurance claims and in-depth family firm information. I’m interested in anything geared toward the middle level, family-firm contractor with six pieces of equipment on up. That’s going to have information that I can use. For example, John Deere puts out a periodical with monthly articles by different customers on business, trends, forecasting, and how they learned.
“We must get over 30 trade magazines monthly and only pay for a fraction of them-a benefit of being in business so long, I imagine. We put them out where all the staff can see them. Employees are encouraged to pick them up and take them home. There is information for everyone. Usually around 10 a.m., the mail comes in and things are slowing down, giving me an opportunity to look them over as they come in. And when I’m waiting for employees at night, I’ll leaf through them or I’ll take some home.”
Seminars and Networking. “Seminars usually occur in the winter,” says Schomp. “I go to every single one I can. In addition to the information you gain they also offer excellent networking opportunities. There is a standing joke: During the breaks, watch everyone jumping on the pay phones or their cell phones, calling their offices with the tips they just got from networking. It’s an art really, getting as much information as you can without giving up too much to any of your potential competitors. Basically, I go to all I can get to-trade seminars, symposiums, and manufacturer new-equipment and technique shows. Sometimes there’ll be pig roasts, and you’ll talk to all the different contractors in your line of business. I always try to learn as many things as possible from other people. There are a lot of things that happen behind closed doors in our industry. There are things you are only going to learn from other people.”
Toolbox Talks. The most commonly practiced type of training grading and excavation firms engage in is OSHA’s required “toolbox talks.” Bumper Kospiah explains, “We have toolbox talks every payday, once a week. Fifteen minutes on safety, OSHA information, and items from our subcontractors association, for instance. Hoffert adds, “Also, we are always getting updates from the general contractors we work with.” For example, Tyrone Reed, safety director for Alvin H. Butz Inc. in Allentown, PA, provides inserts on safety tips that are included in paychecks. Onsite demonstrations and safety seminars are also offered. “This kind of support is typical from a general contractor,” he points out, “because if the subcontractors aren’t safe, then the general contractor isn’t safe.”One-on-One Development. Beyond toolbox talks, another training approach that grading and excavation firms of all sizes commonly agree upon is one-on-one development. Though his firm engages in regular training, Bumper Kospiah strongly feels it’s the everyday dedication to one-on-one development of his staff and close management of projects that has been the key to the family company’s success. “My father started our firm in 1981, after 30 years in the construction business. In that time, our only attrition has been as a result of retirement. We strive to treat our men well. Between my dad and I, we make sure that every site is visited at least twice a day. That way no employee can get too far off base without our lending a hand. We invest in them, and they’ve given that investment back. That has been the key to our success.” Schomp agrees. “I try to be one-on-one with all the men who work with me. My foremen expect that and don’t have problems when I work with the men.”
Bottom Line: Constant Learning Makes for Good Business
In speaking with Schomp, you get the strong impression that his obvious drive to constantly learn and improve is mirrored in the extremely strategic manner in which he has modified operations to maximize profitability over the years. For example, his firm has found that hiring staff from union pools, though it increases the cost of labor, ensures he has an unlimited supply of trained men. “They might be coming from relatively far away-Delaware or Pittsburgh-but they come well qualified, know how to run the equipment, and are excellent to work with.” The period immediately following Labor Day is a peak construction period that Bean Inc. truly cashes in on because it is positioned to have the labor to take on the jobs. “There are downsides, such as more nonunion than union in our area, which makes the competitive edge slide toward nonunion firms in pricing. We have problems being price-competitive in certain areas. Don’t get me wrong, we’ll do house cellars, but we’ve learned with union employees that we are positioned to win more potentially profitable bids within the 30- to 60-mile radius we operate in.”
Bumper Kospiah relates, “My dad has 40 years in the construction business-years I don’t have. I have had the good fortune to work side by side with him and learn this business. But this industry isn’t like going out and opening a store. It’s a big risk with high investment required to start up and stay successful. Imagine, it takes $190,000 for just one machine to dig dirt. Times are always changing, and you have to keep up. Ten years ago laser was unheard of, now it’s all over the place. The only way I’m going to keep this business successful and build on what my father has done is to keep learning all the time.”
Without a doubt, going to seminars, reading trade magazines, joining trade associations-they all take time. Time that might seem impossible to find. But, as the new brochure for Bean Inc. reads, “You can’t do today’s work with yesterday’s equipment and be in business tomorrow.” Try it. Maybe you’ll like it, or maybe it’ll at least pay for itself.
Where to Get Training Assistance,
Materials, and Information
A Place to Start
Construction Equipment Guide
John Deere and other manufacturers’ periodicalsAssociated Construction Publicationswww.forester.net
Check your phone
JJ Keller & Associates Inc.-Regulatory-/compliance-related products
Sokkia Corporation-Land surveying equipment/supplies, sales, rentals, service, training
ViaGrafix, Merideth Olson-Computer software training
Wilson Management Associates Inc.-Construction claims, project scheduling, project audits, partnering, project administration trainingCCH Business Owner’s Toolkit-Broad range of services for all aspects of business ownershipwww.coastal.com
(888) 808-6763www.iptbooks.com(888) 808-6763