Managing the Profitable Construction Business by Schleifer, Thomas C. -- Read -- Imperial Library of Trantor

Index

Cover Titlepage Copyright Contents Foreword Preface Acknowledgments How to Use This Book

Part 1 Part 2 A Teaching Text

About the Authors PART 1

1 Managing with Confidence

1.1 Lessons Learned 1.2 Objectives of This Book 1.3 Managing Areas of Risk 1.4 Recognizing Signs of Potential Trouble 1.5 Layers of Management 1.6 Owner Versus Top Management 1.7 Disciplining Performance 1.8 Boards of Directors 1.9 Accountability 1.10 Selecting the Members 1.11 Importance of Credit 1.12 Volume Versus Profit 1.13 Employee Benefits and Compensation 1.14 Borrowing 1.15 Business Planning Chapter Review Questions Critical Thinking and Discussion Questions

2 Elements of Contractor Failure

2.1 Capitalizing on Experience 2.2 Increase in Project Size 2.3 Unfamiliarity with New Geographic Areas 2.4 Moving Into New Types of Construction 2.5 Changes in Key Personnel 2.6 Lack of Managerial Maturity in Expanding Organizations Chapter Review Questions Critical Thinking and Discussion Questions

3 Increase in Project Size

3.1 Limits of Growth 3.2 Increased Risks with Larger Projects 3.3 Case Study 3.4 Case Study Review 3.5 Underestimating the Size 3.6 Owners and Retainage 3.7 Allocating Time 3.8 Alternatives to Taking on Large Projects 3.9 Conclusion Chapter Review Questions Critical Thinking and Discussion Questions

4 Change in Geographic Location

4.1 Defining “Normal Area” 4.2 Reasons for Changing Geographic Area 4.3 Case Study: Long Distance Project 4.4 Review of the Long Distance Project Case Study 4.5 Managing the Risk with Long Distance Projects 4.6 Case Study: Regional Office 4.7 Review of the Regional Office Case Study 4.8 The Need for Personal Attention 4.9 Opening a Regional Office 4.10 Regional Office Contingency Plan 4.11 Conclusion Chapter Review Questions Critical Thinking and Discussion Questions

5 Changing or Adding to Type of Construction Performed

5.1 Reasons for Changes in Type of Work 5.2 Challenge: Lack of Experience 5.3 Challenge: Differences That Appear Subtle 5.4 Resolution: Know Your Specialty 5.5 Background to Case Studies 5.6 Case Study 1 5.7 Case Study 2 5.8 Example: Union Versus Open Shop 5.9 Know the Risks 5.10 Volume versus Profit Alternative 5.11 Withdrawal Plan 5.12 Conclusion Chapter Review Questions Critical Thinking and Discussion Questions

6 Replace Key Personnel

6.1 Identifying Key People 6.2 Partners 6.3 Founders and Succession 6.4 Inactive Founders 6.5 Succession Case Study 6.6 New Management Team 6.7 Adding Key Personnel 6.8 Management “Dilution” 6.9 Summary Chapter Review Questions Critical Thinking and Discussion Questions

7 Managerial Maturity

7.1 Start-Up Construction Companies 7.2 Importance of Management Skills 7.3 Company Growth Phases 7.4 Limit of Managerial Effectiveness 7.5 Company Growth and Management Thresholds 7.6 Telltale Signs of Insufficient Managerial Maturity 7.7 The Challenge of Management Changes 7.8 Delegation of Authority 7.9 Test of Delegation 7.10 Managerial Maturity Case Study 7.11 Summary Chapter Review Questions Critical Thinking and Discussion Questions

8 Accounting Systems

8.1 Accounting and Information Management 8.2 Types of Systems 8.3 Who Is Responsible? 8.4 Accounts Payable 8.5 Disputed Invoices 8.6 Case Study 8.7 Recording Liabilities 8.8 Accounts Receivable 8.9 Timely Data Entry 8.10 Summary Chapter Review Questions Critical Thinking and Discussion Questions

9 Evaluating Contract Profitability

9.1 Measuring Performance 9.2 Accounting for Profit 9.3 Selection of Systems 9.4 Percentage of Completion 9.5 Estimated Profit 9.6 Case Study 9.7 Percentage of Completion Method of Accounting 9.8 Construction—Work In Progress Method 9.9 Over- and Underbilling 9.10 Impact of Total Revenue 9.11 Cost Control 9.12 Timeliness 9.13 Cost Control Versus General Ledger 9.14 Tracking Costs 9.15 Working Without Information 9.16 Summary Chapter Review Questions Critical Thinking and Discussion Questions

10 Equipment Cost Management

10.1 Ownership Costs 10.2 How Much to Own 10.3 Reasons to Buy 10.4 Competitive Position 10.5 Calculating Equipment Costs 10.6 Time and Usage 10.7 Replacement Costs 10.8 Equipment Costs Charged to Projects 10.9 Idle Equipment 10.10 Cash Flow 10.11 Equipment Obsolescence 10.12 Equipment Obsolescence Case Study 10.13 Replacement Cost Incurred Daily 10.14 Summary Chapter Review Questions Critical Thinking Questions

11 Other Industry Concerns

11.1 Introduction 11.2 Growth and Risk 11.3 Market Driven 11.4 Controlling the Need for Volume 11.5 Rate of Growth 11.6 Flexible Overhead 11.7 Mobility of the Industry 11.8 Diminished Profits 11.9 Employee Benefits and Compensation 11.10 Motivation and Loyalty 11.11 Internal Company Disputes 11.12 Debt 11.13 Business Planning 11.14 Recommendations Chapter Review Questions Critical Thinking and Discussion Questions

PART 2

12 Financial Management Issues

12.1 Keys to Success 12.2 What Financial Statement Are Supposed to Convey 12.3 Three Major Functions 12.4 Financial Statement Basics 12.5 Balance Sheet 12.6 The Holding Tank Concept 12.7 Assets 12.8 Current Assets 12.9 Property and Equipment 12.10 Other Assets 12.11 Liabilities 12.12 Equity 12.13 Income Statement 12.14 Financial Statement Sets 12.15 Summary Chapter Review Questions Critical Thinking and Discussion Questions

13 Financial Analysis and Indicators

13.1 Working Capital 13.2 Calculating Target Backlog 13.3 Calculating Target Annual Income 13.4 Maximizing Working Capital 13.5 Liquidity 13.6 Current Ratio 13.7 Quick Ratio 13.8 Receivables to Payables Ratio 13.9 Leverage 13.10 Financial Capacity 13.11 Additional Indicators 13.12 Break-Even Point 13.13 Rscore 13.14 Change Percentages 13.15 Summary Chapter Review Questions Critical Thinking and Discussion Questions

14 Projection and Budgets

14.1 Terms 14.2 The Projection Process 14.3 The Pre-Projection Process 14.4 Key Operational Factors 14.5 The Projection Process 14.6 Putting the Projection to Use 14.7 Short-Term Cash Flow Projections 14.8 Summary Chapter Review Questions Critical Thinking and Discussion Questions

15 The Effective Use of Credit

15.1 Introduction 15.2 The Primary Creditors 15.3 Banking 15.4 Bonding 15.5 Leasing 15.6 Summary Chapter Review Questions Critical Thinking and Discussion Questions

16 Making Decisions in Volatile Conditions

16.1 The Effects of Market Cycles 16.2 G & A Stair-Steps 16.3 Using Cycles Positively 16.4 Consecutive Cycles and Fighting Tendencies 16.5 Summary Chapter Review Questions Critical Thinking and Discussion Questions

17 Success Factors for a Changing Industry

17.1 What a Client Wants 17.2 A Client Perspective of the Contract 17.3 How Contracts Are Awarded 17.4 How Contracts Are Won 17.5 Relationships and Contract Divergence 17.6 The Client's Vexing Problem 17.7 Goals of Alternative Delivery Methods 17.8 Successful RFP Response Strategies 17.9 Effectively Using Risk Analysis in a Proposal 17.10 How to Develop a Winning Proposal 17.11 Successful Interviewing Strategies 17.12 Summary Chapter Review Questions Critical Thinking and Discussion Questions

18 Performance Measurement

18.1 What to Measure 18.2 Setting the Client's Expectations 18.3 Risk-Based Preplanning 18.4 Measuring Project Performance 18.5 Measuring Past Performance 18.6 Performance-Based Client Relationships 18.7 Measurement and Leadership 18.8 Summary Chapter Review Questions Critical Thinking and Discussion Questions

Appendix: Answer Key for Chapter Review Questions Index