Good advice that’s good enough to take!

What is the best piece of advice you’ve ever received and how has it helped your business?

Firm: Whelan Building Ltd

Principal: Geoff Whelan

Location:  Waiheke Island

Staff: 24

From a business perspective, the best advice we have ever received has come from our accountant: “make sure you really understand your costings and overheads”.

Understanding your weekly expenses and revenue is important, because otherwise you can end up waiting until the end of the year to understand how your business has actually performed.

It’s helpful because by keeping track of your cash flow, you can understand exactly how much money is in your business – which allows you to plan for expenditure, such as tools and other items.

It also makes paying tax a lot easier, because you are aware of how much you are making each week and can put that aside, rather than having to guess and ending up with a large sum of terminal tax to pay.

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Firm: REBL Construction

Principal: Roger Elliott 

Location: Hamilton

Staff: 4

My father used to be a bank manager and he told me “don’t ever trust anybody with your money”.

It means you need to keep your finger on the pulse of your business and manage your cash flow. To ensure
that our customers make their payments, we invoice regularly and regularly check our accounts. Employing the right accountant is also important.   

Putting the right contracts in place is another key part of it. The Registered Master Builder’s contracts are great and we use those as a template. The industry has evolved to the point that the paperwork is almost more important than the building, so you need to be vigilant about keeping on top of it.    

As a result, we have the ability to do the jobs we need to do because we have the capital to purchase materials or invest in a section without having to borrow it. It also means we have the money to always pay our staff on time, which helps reduce turnover.

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Firm: Dimension Building Ltd

Principal: Richard Phiskie

Location: Timaru

Staff: 10

Never compromise on your pricing to win a job and always learn from your mistakes.

People will always say to you “if you discount your quote by this much, we’ll give you the job”, but you can’t do that. You need to explain to them what’s actually involved in your quote and show them that they’re getting value for their money. It’s also about backing yourself and your service by standing by what you think it’s worth.     

With the second part, everybody always makes mistakes in business. It’s important that you turn those mistakes into a learning experience and don’t repeat them.

I received that advice from two business mentors I use.

That would be another piece of advice I’d recommend to people – have good mentors you can talk to for advice and bounce ideas off. It’s really helpful because they’ve been there and done it, it’s helped me a lot in getting to where I am.

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Email your answer with your full name, contact phone number, company name, number of full-time staff and the city or town in which you’re based to editor@pmundersconstruction.co.nz. All responses must be submitted by 25 November 2016. The answers to this question will be published in Under Construction February 2016.