Steel Detailing | Precast Detailing | Estimation

Month: January 2024

  • How can I earn more? (Memo 29)

    • How can I earn more?
    • How can I get a higher wage?

    Legitimate questions.

    In order to answer those questions, consider:

    • Where is the money coming from?
    • Why is the money being paid?

    Where is the money coming from?

    • Nobody has a pot of gold.
    • For all businesses, the money comes from clients. It is the client who is paying you, not me. The client pays you, not the shareholder.

    Why is the money being paid?

    • You are being paid because the client needs help.
    • Your job is to guide the client to his destination. This means looking after and caring for your client.
    • Clients are risking million dollars (in some cases) on their projects. You need to help the client so that they don’t lose their money, business and reputation.
    • This means if you want to get paid well and get repeat business: focus on doing a great job for your client.
    • If you do a mediocre job, barely good enough – then this will not impress the client. How then are you going to ask the client for a pay rise?

    How can I get a higher wage?

    If you want more, the only way to do this is to give more. The question you should be asking is: how can I give my client more?

    (a) Outstanding Service

    • First provide an outstanding service to your client. If you do this, you’ll get more clients and more work. If you don’t do this, then you’ll lose clients, and you’ll have less work. Keep doing mediocre work and you’ll soon have zero clients, and no work.
    • Do the simple things well. I do not want to keep reminding you to:
    1. update your status,
    2. inform the client when you are unavailable (perhaps a cultural celebration, or an event, or a wedding etc),
    3. or to post links to drawings in the private details of your statuses.
    4. don’t promise things you cannot deliver.
    • Once you have many clients, then we can choose our clients carefully, and choose the rates.

    (b) Innovate

    • Anything you can suggest which will make us cheaper / faster / better will be highly regarded.
    • Innovate: This is the best way to get higher wages. Because if you provide something that the client finds valuable, that they cannot easily get elsewhere, they will pay for it. Small things are fine. Here are a few examples of innovation.
      • All of you have Teams accounts so you can better communicate.
      • We are now providing Live Links on all projects.
      • We provide statuses. We have private_details on all statuses.
      • All of you now have phones. Use them! Turn them on. Be a professional. Call clients on delivery of drawings.
      • We have multi-tenancy on the quote app. (Ram suggested it a long time ago).
      • Big one: we have EBs and approval process.
      • Big one: We have bonuses for winning and retaining clients (i.e. client reviews).
      • Barath made tutorial videos – this reduces our cost of training.

    Proof of Tek1’s commitment to your remuneration:

    1. EB. We have proven that if you give clients something valuable to them – they will pay you for it. You have seen this with our EB system.The innovation here is simple: give clients compelling documentation.
    2. Bonuses. For winning and retaining clients. For high quality work.
    3. Higher wages. Retaining a stable of premium clients allows us to pay you higher.

    Higher wages takes time. If you focus on client outcomes, and innovate (or at least, help me innovate) then you will be able to get persistent differential returns. However, if you don’t focus on client outcomes, then it will be difficult for you to earn differential returns anywhere – whether inside or outside Tek1.

  • Why builders and fabricators should care about the legitimacy of supplier services?

    Dealing in Fenced Goods and Services

    It’s not uncommon for those receiving fabrication drawings to overlook the legitimacy of the products used by service providers. There seems to be a prevailing mindset of indifference, with the attitude being, “As long as the drawings are correct, I’m fine—I’m legally protected, and proving involvement with stolen goods is too challenging.”

    Similarly, many fabricators and builders consciously avoid probing into the legitimacy of the software used for services. The fear of inadvertently becoming complicit in any wrongdoing deters them from asking uncomfortable questions. However, this approach presents a couple of significant issues.

    1. It sets a concerning tone within your own business. If engaging in any form of dealing with stolen goods becomes an accepted part of your company philosophy, you inadvertently create an environment where “dealing in stolen goods is acceptable as long as we avoid problems.” This not only makes your business susceptible but also ingrains a risky culture among your staff.
    2. Secondly, this approach poses a broader threat to society. By turning a blind eye to the legitimacy of goods and services, you inadvertently contribute to a scenario where bad actors replace good ones.

    The moral compass guiding what can be stolen and how far one can go becomes unsettlingly subjective, lacking the high ethical standards needed to foster a thriving and reputable industry.

    It’s crucial for businesses to reassess their practices, placing a premium on integrity and ethical conduct to ensure the industry maintains its standards and safeguards against potential harm.

  • The fallacy of insurance in the building and construction industry – (Staff Memo)

    Clients often ask me: “do you have professional indemnity insurance” (PI Insurance)? The short answer is “yes” we do. It isn’t cheap: we pay over $20,000 per year in premiums – last year was about $27,000. But the long answer is, while we do have insurance: you cannot rely on it.

    Here’s why:

    • Insurance companies are not in the business of paying out. Their business model consists of collecting premiums (up front), re-investing those premiums, earning a return on the “float” as well as profiting from any claims that are not paid out. In order to minimise their costs, they are incentivised to fight claims.
    • The procedural / documentation issues: in getting a pay-out is very high – it is almost impossible for anyone to meet these requirements. If a claimant cannot access the insurer’s honey-pot, then you’re stuck without a paddle.
    • Subrogation: You’ll have to claim from me, I will be required to notify the insurance company, and then they will grab the steering wheel off me and takeover – i.e. “subrogation” occurs. Since the insurance company is the one who will be paying out, they must necessarily do this to safeguard their interests.
    • The costs of pursuing a claim are very high.
    • If there is a successful payout – such firms will be black-listed in the insurance market, they won’t be able to get insurance, consequently they may have to go out of business. The mere existence of a firm, lasting 15 years, is indicative of their quality.
    • At Tek1, we limit our liability.
    • Building and construction is usually collaborative endeavour. If a project goes wrong, everyone gets dragged into the fray. Most firms cannot afford to pay for the costs and mistakes of third parties.

    In summary, while we have insurance, both you and me cannot rely on it.

    The best protection is prevention: mitigate risk, and take care, and ensure all parties are equally vested to achieve the desired outcome.

  • You Need to Win Jobs at a Margin (Commercial Tips)

    There is no point being “a busy fool”. If you’re winning jobs at a loss, or at really unattractive margins – things are probably not going to go well for you.

  • Collect a deposit: (Commercial Tips)

    It is critically important that you collect a deposit:

    • So that your client is on the journey with you. i.e. you are both incentivised to reach the same outcome
    • So that you can pay your suppliers (on time).
    • So that you are not held to ransom.
    • So that you can actually do the job, to the standards which you are attaching your name / reputation to.
    • So that you don’t have to BS people – so that when you say you will pay, you can actually do so.