#144 When to Say No
Hello, and welcome to another episode of the construction corner podcast. I'm Dylan, I'm your host. And today it's going to be a special episode. We're going to talk about when to say no when it's okay to walk away. And how you can improve your pipeline so that you don't always have to say yes and get hosed on every single project with that.
Matt, my friend. How's it going?
Things are good, man. This is a, an interesting topic for me. Cause I, I worked for a guy for a little bit of time, kind of a mentor figure for me. And one of the first lessons he ever taught me was. As the best projects you, the best products out there sometimes are the ones you won't get.
And that has held true so many times in my career. Um, you know, we were kind of shooting the shit before going live today. Uh, it's happening to me right now, right. With a client that I've been working with for a long time. And, you know, we, we can get into it as you want to, but sometimes the best ones are the ones you walk away from.
You gotta be able to pick and choose.
I think so often, uh, you know, in the design world, especially, um, I'm sure the SKUs for up and down the chain, but where we're so conditioned to say yes to jump on that thing, whatever it is, right. Some realistic, crazy, stupid, uh, deadline expectation, even. And jump on that. Uh, mainly out of fear, I think it's, it's truly, fear-based, we're afraid to lose a client.
We're afraid to say no, we're afraid to, uh, set other expectations than the kind of crazy ones that you know, uh, owner, uh, principal, uh, Contractor somebody, you know, somebody above us might set the expectation for when it's just realistically not possible.
Well, you know, so much of our industry, I think on all sides, design, construction, everything it's, it's always, so, so feast or famine, or at least that's the mentality.
And for a lot of people, that's the reality of it. I mean, I'm not, I'm not, uh, shortsighted enough to, to forget where I came from. You know, the, there was a long time when it was you better not say no because you don't necessarily have another, another job or another project of fit in that void. So, I mean, we would take on the shittiest of.
Knowing knowing full well, like this is not a good fit. This is not going to be fun. It's going to probably be painful, but it also filled a purpose and it kept people working. It kept, you know, at least some moderate amount of cashflow running. So it's, it's a really hard, you know, conundrum in, in, it's probably in every industry, but I think it's in an hours more so than most, um, Once you realize that you don't have to say yes to everything and you can actually pick and choose and you can use, you know, values-based decisions to, to target where you want to go.
After you can also realize that you can fill your pipeline without having to do all the stuff you don't want it.
Yeah. And in the beginning, you know, at the start of any company, any business, there's a lot of things that you're going to say yes to, because you kind of have to, to keep the lights on doors open, but as you mature and really reposition yourself into things that you want to be doing into the projects that you're more aligned with the clients that you're more aligned with, and really ultimately sticking to your guns, your value system, creating.
And aligning yourself with projects of that caliber again, around your values, then you're going to attract more and more of the clients that you want to work with. You can say no to the clients, you know, are just going to be a pain, suck you dry and really make you unprofitable really unhappy. And, um, which is going to be our topic for next week about dealing with.
You know, just the mental anguish that comes with a lot of these problem clients, frankly, uh, problem, uh, professionals that we work with and, you know, all walks through construction.
And there's also the flip side of it too. Right, man. I mean, there's plenty of jobs that I've also looked at that I had no business looking at right there that were.
Astronomically bigger than anything I should even be touching. And I'm the first one to dream big. I'm the first one to push that as a mindset, but there's also gotta be some reality and how you pick and choose how to run your business. And you know, when, when we were a sub million dollar construction company and I would get my hands on a $20 million hotel price.
Chances are we, shouldn't probably be looking at it. You know, even if, if we could sell ourselves down the river enough to, to, to land it, you know, that those could be the jobs that also would just end you as a, as a company that, you know, they would send you back to reset mode and start you from scratch.
Yeah. I mean, it would choke you out financially. You don't have the credit. Do you do anything like that? That's why like on the construction side, you know, and we've had multiple shows talking about financing and credit and, uh, cash flow for subs and GCs, especially like if you don't have the credit lines and relationships with your bankers, you cannot touch those projects.
It's just not going to happen.
Know, we're kind of dancing around topics, but that brings up an interesting point. That one that I I've never personally seen, uh, professionally, but there's, uh, a buddy of mine, um, owns company called mobilization funding. And I don't want to plug him too much, but he basically provides just that mobilization loans for primarily subcontractors so that they can take on bigger projects.
And not have to worry about the cashflow side of it. Um, it's a kind of a neat concept, you know, and again, I haven't seen it professionally. I've, I've talked with Scott, you know, numerous times. Um, I know a few of the subs that he, he works with and it, it just seems like a cool idea. So, you know, what are your thoughts on that?
Why don't we see that sort of thing more often in, in the industry on either side, it could be under the design side, too.
Yeah. So we had a build on, and I I'm blanking on his first name, but, uh, the company build which they do similar pieces where it's a, uh, I think 90 and year, 120 day, uh, like 2% financing option.
So it becomes a, you know, short term loan type of thing. Where you can mobilize that. And, and cashflow is half of it, right? So on the sub and GC side, like that's a big deal. The other part of it, uh, becomes in those bigger projects is, um, well, hold on, let's say on cashflow. So on the design side, like. You can handle it, if that is your only project.
So if you shove, let's say it's something that's five times bigger than anything you've ever done before. You have to clear your plate of everything else. Like that can be the only project that you're going to do, because that's the amount of people that you have for it. Um, so on the design side, you can do it.
You just cannot take on anything else. Um, and then from a cashflow standard, You've really got to do a bunch of upfront work to show. And then bill accordingly, um, one of the dire mistakes that I just see repeatedly from design firms is especially when you bill on a, um, monthly cycle is, and then net 30.
Make your deadlines before the end of the month. Like, you're going to kill yourself if you push, like so right. Like this weekend, right? Or last week you had. You know, you went from Friday the 27th to Friday the third. So pushing it a week might not be a normally bad thing, but now you just pushed out your billables, another 30, 60 days, really 60 days.
Cause you're going to build now, if it's due on the third, you're going to say that that phase of design is met in September, not in August. So you can't bill for it August and get paid. End of September. Now you're going to bill into September, get paid end of October. So you push. Things 60 days. So from a design side, which again, I think most project managers don't understand billing cycles.
They're not taught it. Um, and then the principals again, or. Frankly, like, it's just like lawyers, it's like any professional services firm. You were really great. The thing that you did, right? Whether you're an architect and engineer, and then you move up, you never learned like basic business principles like cashflow, uh, you've kind of learned contracts as you went.
You never really took a public speaking course or did that. You were just good at talking to people and quote natural at it. Um, more than likely. You know, having picked up a book on the writing or speaking or done Toastmasters. And, but again, you were just great at your craft. So you got elevated through the.
When you're just personable. So any quote sold because somebody puts you in front of a client or gave you that opportunity, but like actually developing business wasn't in your repertoire. You don't know how to make cold calls. You never had to, you don't actually follow up with clients. So you're always amazed when you get another project.
Uh, There's a whole slew of like business things, right? Like sales, marketing, cashflow, finances, operations that you just don't learn. Um, you know, the subs and those guys, I think get a little more of a hard knocks education and like actually how to run stuff because they do have to deal with the money.
Uh, more frequently we're designed firms it's out of, out of sight, out of mind. So when it comes to. Cashflow and dealing with bigger projects and taking those on you totally can. But for design firms in particular, like you need to be very conscious of your deadlines, your deliverable dates, and, uh, you know, when your milestones are, how far apart they are and then your workload on all around that project, again, if it's like five, 10 times bigger than anything you've managed to get.
Yeah. You know, we're, we're jumping all over tonight, but it it's, it's the same way on, on our side too, you know, learning that schedule a billing and, and learning that discipline too, to make sure it happens is so paramount to success in this industry, because, you know, with our, with all of our subcontracts, we have, uh, they have to have their invoices to me by the 25th of any given month.
And. It's a real bad day. When I have to tell someone. You're not getting paid on this cycle because you didn't have me your damn invoice, but we've built a system and a process where there, there is no option, zero option mentality. If you get it to me on the 26th, tough shit. I told you, I told you, I told you the 25th or nothing because we have the, on our side, we have to submit our invoices on the first to our clients.
And if we. Do all this, and I've talked about it before we push really hard for 15 day net terms on our billing. So we have to demand these dates. We have to demand the deadlines and you know, it sucks when, especially some of your you're close with, you know, they, they miss the billing by a day or two days or three days.
And then when payday comes around and you're like, sorry, dude, I don't have to tell. But it makes us all better and allows us as a GC to really control that timeframe better with our clients and make sure that we're getting paid quicker, which means that we can pay everyone else quicker and everybody wins.
But you have to, you have to control that discipline, uh, greatly. Otherwise it just gets too chaotic. And, and like you said, a two-day or three-day miss that's catastrophic too, in terms of cashflow and budget.
Yeah. And I mean, going back to the main topic like this is in when saying no. So taking on those bigger projects, taken on things that you know are going to be a pain are, are really detrimental.
When you do not have payment systems. When you don't have design operations systems in place, you should not grow. You're going to break a lot of things. You're gonna, things are gonna hurt and. It's going to hurt to where you're going to do one of two things. You're either going to fix it and it's going to be very painful to fix, or you're just going to go out of business.
You'll fold. Uh, it's one of the two, like you're either going to get through and it's going to be very painful because you didn't build them as you went when it was like fairly easy to fix little problems versus now having to revamp your entire system, your workflows, like everything. So. Understanding that as you grow, you need to build these systems, put processes in place, you know, from billing to operations, to standards, to, I mean, everything like how you do proposals, how you do presentations.
And it's much, much easier to do that when you're small going after it, a little projects on a faster cycle, uh, to really learn and iterate versus chasing the. Big projects, you know, 10, 20, 50, a hundred million dollar projects, billion dollar projects that take, you know, 2, 3, 5, 10 years to land to get all the right pieces to line up, to make that project happen.
So you're, weren't like. Uh, probably not ready again for your own in your own firm. You're not ready for those big, big projects yet. Uh, get your systems, right? Keep the cadence cycle high so you can increase your learning speeds to where when these big projects do come along, you're ready for them and can put your systems that have been time tested and, uh, you know, vetted in a place so that you're ready to exit.
Yeah. And there's always a bit of gambling involved. You know, I, we talked last, last show last week about, you know, I'm trying to build our own systems at, at our company trying to document everything so that as we continue to get bigger and grow, we don't have all those pains, but there's a very fine line between, do I want to, I want to pass on this big project so I can sit in my office and.
Procedures and systems, or do I want to say, you know what, I'll get back to those procedures and systems. Let's go a hundred to zero and take this thing on and I'd be lying if I told you I don't, I don't often just go after it. Um, cause I do, but, but there's also a hesitancy involved and, and I know that one of these days it'll catch up to us, you know, like you just said, one of these days that that project will be.
Too big, too complex. We'll have to grow too fast and if we're not ready for it, then it could all come crumbling down. So,
uh, I keep putting in my on Friday afternoons, uh, then I ended up scheduling something else for Fridays, but it's good weekend work at the least.
Yeah. And S in this, right, like saying no. So it's saying no, not only to big projects, but also comes in the form of, you know, what is realistic expectations, right?
Where do you fit within a given project? Like hierarchy kind of, uh, but also like, what is reasonable for you to get done? Right. Like piss poor planning on your part does not constitute an emergency on mine. You know, and far too often, we, people do not plan. They don't, uh, think through anything. They throw things, you know, last minute and guess what?
Or, you know, at the end of the day, it's not going to get done. Like, I'm not going to answer your call, just not going to happen. You know, if you want it, you know, we'll figure something else out. This happens, I think far too often where it's last minute changes or last minute, whatever. And we've been conditioned to just jump at it and say yes.
And, uh, that's. You know, after awhile, when it doesn't happen, how a lot of things break. Whereas if you said no sooner in the process, which again, like I get the industry norm is to say yes, but by saying no, or like, Hey, I've got other priorities, go talk to the other four project managers in line. Um, you know, that's a lot of the thing too.
Uh, and that far happens in design firms. It's like, okay. Oh, you didn't get this project. Okay, please tell me which one of the four other project managers you'd like to go have a conversation with and tell them that their project got moved to the back of the line. You know, who's whose priority here. And I've done that on multiple occasions.
No principal will ever tell me one is more important than the other. So therefore nothing is a priority and you're all going to get it when you deal with it.
Yeah, I I'm laughing because I can see that from both sides, because I've also been the, the PM, you know, barking at my design guys saying what the hell is going on. Mine is the most important, no matter what, but you know, learning to say no is, is a really hard thing to grasp. It's a hard skill to master, but.
Ultimately very important in business and in life, really, it can be uncomfortable, but if you can't say no, you end up just spinning wheels. You ended up spreading yourself too thin. You end up doing dumb shit that you shouldn't be doing. So, you know, you gotta be able to pick and choose. At times you gotta be able to pick and choose your clients, your projects, your subs, your employees, your designers, you know, all across the board.
And you gotta be able to say no, when.
And a lot of this just comes down to having, having systems in place, thinking through a lot of stuff. And you know, for you just listening to this episode, you're leagues ahead of everybody else, because nobody else is talking about this stuff. Like there's no one else talking about putting in actual design systems.
Find me the guy that's talking about design processes or like billable dates, you know, it's not happening. Like nobody's going to talk about this stuff. This is the crux. These are the foundational building blocks of any business, especially in construction, on cashflow, billable dates and service oriented companies.
So. I mean for, for all this, like nobody's talking about it. So by listening, you're again, you're leagues ahead and you should share the show out to help more people get educated. Don't just keep this to yourself because you need everyone on your team with you and implementing a lot of these cashflow pieces.
Uh, you know, you're not more than likely you're not going to do it on your own.
Yeah, absolutely. It takes a team. It takes a village man. So share this around. Guys, give us, give us a, like, drop some comments to us. You know, if you do get some value out of this, let us know. And if you want something different or better or worse or other, let us know.
We'll we'll at least pretend to read them all
you guys, uh, I know we harp on the, a lot of the same topics over and over again. But th that's how important, like billing is systems are cashflow that is oxygen to your business, to your organization. It's important to say no to the right projects and the right partners and the right.
Clients as well as saying yes to those right clients, those right projects, those people that align with your values. Those are also important to say yes to, uh, for teammates, for, for everyone up and down your chain, as well as, you know, side to side for delivery partners and channel partners, all that.
Extremely important to align yourself with the right people, um, in all facets and it'll make your life a whole lot easier. You'll go home a whole lot happier, uh, when you have that in place
without a doubt, man.
So guys, it's this little short episode of the construction corner podcast until next time.