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January 2020 Te Contractor’s Advantage
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Planning for the New Year and the New Decade
continue to grow my business? How do I keep people employed while maintaining the business itself? How do I manage profitability if a potential drop in revenue is expected in the near future?” Planning for the next year, let alone 10 years, isn’t easy, especially when you get into the finer details. Literature on the subject of long-term planning says that the furthest we can plan out, at least on a practical level, is three years. Once you go past three years, it starts to become more abstract. You may not have all the answers, and that’s okay. But again, it comes back to adaptability and flexibility. You want to give yourself room to reset your goals and restrategize as necessary. Just think about where you were 10 years ago versus where you are today. Ten years ago, I didn’t have any children. Ten years from now, my daughter will be in her final year of high school, and she’ll be driving! So much can change in 10 years. We have no way of predicting exactly what’s going to happen, but we can certainly plan and work toward what we want to get out of our plan. I’ve been reading about the psychology of people when it comes to procrastination, which can play a major role in goal setting. It’s a subject touched on in “The 12 Week Year” by Brian P. Moran and Michael Lennington. The book suggests that a good way to plan is to do so in 12-week intervals. The concept applies both to your personal life and business. It’s remarkable how quickly 12 weeks can go by. Planning in 12-week intervals keeps your deadline closer, meaning you are less likely to procrastinate. This is one of the reasons why many people don’t accomplish their goals: They don’t
With another new year comes new goals and new outlooks. Many people traditionally use this time to think about how they want to improve in the coming year personally, professionally, or both. This year, however, is a little different. Not only is this month the start of a new year, but it’s also the start of a new decade, making it the perfect opportunity to put together a long-term plan. I recently sat down and planned out the next 10 years. It may sound like a lot, and sometimes it is, but it gives me an outline of the next decade. I thought about various goals and targets I want to hit, and I now have an idea of what my business might look like in 2029. However, I also know I can change things as we go. When you are looking 10 years out, flexibility and adaptability are two elements you must embrace. In business, you want to plan with outside variables in mind, and there are many of them. For instance, this year it might make sense to plan for a recession. While no recession is guaranteed, the opposite isn’t guaranteed, either. You want an allowance in the event that the economy slows down, and as a result, business slows down. In general, it’s always a good idea to plan for economic slowdowns, even if there is no sign of one in the near future. That way, should anything happen, you are already prepared. It can be tough. While many businesses survived the last recession, others did not. A lot of it came down to planning. In times of prosperity, it’s easy to forget that no business is recession-proof. The more you can plan and the more questions you ask of yourself (and answer), the better off you may be. You might ask questions like “How can I
give themselves a firm deadline, or they set the deadline too far out. When it’s too far out, it’s easy to fall into the mindset of “I’ll do it tomorrow.” Then, tomorrow becomes next week, and next week becomes next month. In terms of 10-year planning, the focus isn’t so much on setting casual goals but instead on big picture items. I’m looking at where I want to be in my career in 10 years and planning accordingly. Within the big-picture goal, there are many other, smaller goals — the goalposts along the way. While I may have a good idea of where I want to be in 10 years, I first have to hit my 2020 goals and my Q1 goals. It’s all one step at a time (or 12 weeks at a time)! It’s something to think about as you set your own goals and think about where you want to be in a year or in a decade. Welcome to the 2020s!
-Jeremy Wyatt
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At the start of each new year, about half of all Americans set at least one New Year’s resolution, a promise to themselves that they will thrive in the coming year. Unfortunately, research from YouGov Omnibus, an international market research firm, found that only 1 in 5 Americans stuck to their resolutions. The fallibility of New Year’s resolutions is why few successful CEOs or leaders bother making them. Around this time of year, plenty of articles pop up with hot takes like, “Don’t set New Year’s resolutions; make goals instead!” Unfortunately, if you haven’t been making goals already, you’ve likely been setting yourself up for failure. Setting goals, achieving them, and making new ones should be a habit all year long, not just something you do on Jan. 1. The start of a new year is still a great time to reflect and strategize, but rather than fall on an old cliche, take a page from two of the most successful people in business. Reflect on 2019 with Tim Ferriss. For decades, entrepreneur and best-selling author Tim Ferriss made New Year’s resolutions every year. Then, he developed a better strategy. “I have found ‘past year reviews’ (PYR) more informed, valuable, and actionable than half- blindly looking forward with broad resolutions,” Ferriss said in a 2018 blog post. At the start of each year, Ferriss spends an hour going through his calendar from the past 12 months and making a note of every person, activity, or commitment that sparked the strongest emotions, both positive and negative. The most positive events get rescheduled immediately for the new year. Meanwhile, the negative ones get put on a “Not-To-Do List” and hung up where Ferriss can see them. Pick a word of the year with Melinda Gates. “I do believe in starting the new year with new resolve,” says Melinda Gates, co-founder of the Bill & Melinda Gates And Set Alternative Goals for the New Year THROW AWAY YOUR RESOLUTIONS
3 ESSENTIAL TIPS FOR USING FACEBOOK LIVE And Making Your Broadcast a Success
Facebook Live has been available to Facebook users for years now, but many business owners still haven’t taken advantage of this powerful customer engagement resource. Essentially, this technology gives users the ability to broadcast live from their Facebook account. For businesses, a gold mine of opportunity is opened to connect with customers and prospects in real time. Some companies utilize it for product launches, rebranding, general announcements, or directly engaging with potential customers. That said, a poorly executed broadcast can leave you with more issues than you started with. With that in mind, here are some essential tips to ensure your Facebook Live videos strengthen your marketing instead of weaken it. 1. Record for at least 10 minutes. If you set out to broadcast for 45 seconds, your content isn’t going to reach anyone in your target audience. A good rule of thumb is to create enough content so that your event reaches at least 10 minutes. With an average broadcast time of 10 minutes, your audience will have more opportunity to see your content, and you’ll reach the highest number of people possible. 2. Prioritize good production quality. You don’t need to be a professional videographer to develop quality video content, but a poor broadcast could damage your brand. For example, your viewers will be distracted if you use an unsteady camera, so invest in equipment to keep your broadcast steady, like a tripod. In addition, make sure your environment is completely quiet so your audience can focus on your content without hindrance. If you plan on having more than one person in the video, use microphones to ensure your audience can hear you. 3. Engage with the comment section. You could be alienating the audience you’re trying to engage by failing to respond to questions in the comment feed. Facebook Live isn’t just about broadcasting yourself; it’s also about communicating with your viewers directly to develop relationships with them. And as an added bonus, viewers’ comments can give you valuable feedback and consumer insights. It takes effort, but putting in the time to respond is well worth it to show you care about your audience’s opinions. These tips only scratch the surface of making your Facebook Live event a success, but they offer a good starting point. Before you dive in, know that Facebook’s platform changes periodically, so be sure to test Facebook Live on your personal page to familiarize yourself with the updated format. And to stay up to date on all of Facebook’s updates, check out their new newsroom at Newsroom.FB.com.
Foundation, “but instead of adopting a resolution, I choose a word of the
year — a word that encapsulates my aspirations for the 12 months ahead.”
Gates says that words like “spacious” or “grace” have helped her center herself and serve as a reminder about what she really wants to focus on. In 2019, Gates chose the word “shine,” stating that, “It’s a reminder for all of us to turn on the lights inside of us, lift each other up, and shine together.”
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HAVE A Laugh Throughout his book, Ries emphasizes the importance of consumer feedback for the success of your business, but he also warns against putting any real value in vanity metrics, which TechCrunch describes as data points, “like registered users, downloads, and raw page views.” Anyone After reading just a few pages, it’s easy to see why everyone raves about Eric Ries’ invaluable manual “The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.” Ries is a fantastic writer, but two aspects of his writing style separate him from the pack of typical business writers and keep you turning pages: He is intellectually honest and cheerful about his business insights. Eric takes a common notion in business — “fail fast, succeed fast” — and breaks it down into a system that works for businesses and keeps consumers happy. “The Lean Startup” recommends the use of a minimum viable product, or MVP, to gauge demand before you embark on major product development. Forbes describes an MVP as “a product with only a basic set of features, enough to capture the attention of early adopters and make your solution unique.” If you jump into building the best product possible before measuring what your consumers actually need, you risk wasting a lot of time. Market research can tell you a lot, but MVPs can tell you even more. Plus, if your initial rollout is successful, you can respond quickly to consumer feedback and tailor your final product to specific needs. Jump-Start Your Business With Eric Ries’ ‘The Lean Startup’
can generate immediate hype for a product, but it's another thing to maintain constant engagement and experience growth of consumer interest. With a good MVP and continued improvement of your service or product, your business will see that growth and also retain customers. Ries’ guidance does not end with MVPs and vanity metrics; here are some other key takeaways that will keep you on the lean startup path when it's most daunting.
"It's the boring stuff that matters most."
"Remember if we're building something that nobody wants, it doesn't much matter if we're doing it on time and on budget."
"Customers don't care how much time something takes to build. They care only if it serves their needs."
In the epilogue, Eric's intellectual honesty shines; he readily admits that some readers may take his theories as a means to justify their past business actions. But he encourages everyone to use his book instead as a guide for what they will do next in their entrepreneurial journey.
SUDOKU
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Jeremy Wyatt jwyatt@harrisonlawgroup.com www.HarrisonLawGroup.com (410) 832-0000
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Inside This Edition
1.
Welcome to 2020!
2.
Are New Year’s Resolutions a Waste of Time?
Using Facebook Live to Strengthen Your Marketing
3.
Optimize Your Business With Eric Ries
Have a Laugh
4.
Start the 2020s Off Right With Good Sales Goals
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Level with Me: How Mechanic's Liens Actually Work to Get You Paid
Get Your Sales Goals Right the First Time And Make 2020 Your Best Year Yet No matter what industry you are in, you can’t build a
business. For car dealerships, for example, setting individual goals for your employees may be ideal. For physical therapy clinics and chiropractors, however, it may be best to develop company-wide goals. Regardless of your industry, you must make sure sales goals support the overall growth goal of your business and keep employees engaged and challenged. Shift, Shift, Shift Think about the beginning of 2010. Were you the same person then as you are today? There’s a good chance you are not, which means you’ve set different goals for yourself each year to reflect your growth. The same principle applies to business. It’s perfectly okay to shift your sales expectations and end results to better suit your current success and what you need — no matter what you did in previous years. Be flexible and make changes in your sales goals as you see fit. To start off the 2020s strong, you need to create attainable goals that improve your business. Don’t model your goals after another business that seems to be thriving; focus on what you need to achieve success! It all starts with setting the right goals to get there.
successful business without sales. Making a sale establishes a relationship, almost always yields a profit, and lays the foundation for future growth. When your sales fall flat and you fail to meet goals — or even set them — your business suffers negative consequences. As we head into a new decade, follow these suggestions for short- and long-term goals to guarantee your sales success. Think Like Goldilocks The problem with goal-setting is many people aim too low or shoot too high. Instead, you need your sales goals to be just right. The key is to find a goal that is challenging for your team to reach, but also attainable. Here’s one way to go about creating that Goldilocks goal: Look at the number of sales you made each month for the past two years. Identify the months with the highest
and lowest sales and find the average of those numbers. Use this figure as the starting point.
Keep It Personal There’s no hard-and-fast rule on setting sales goals other than this: The goals need to fit your
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Level With Me By JeremyWyatt
HOW MECHANIC’S LIENS ACTUALLY WORK TO GET YOU PAID
the homeowner. As part of this process, the lender will ask a title company to search the project’s land records and confirm that there are no other liens on the project that might prevent the lender from foreclosing on the land should the owner default on paying the lender back. And it is even more complicated than that. Lenders typically only release funds to pay for a project in small doses, called “draws.” So, when the general contractor invoices the owner for project work, the owner then passes the invoice to the lender and requests a draw be released to pay for that work. Before releasing any draw, however, the lender will turn back to its title company and ask for confirmation that there are no liens on the land except the lender’s deed of trust. Once the title company confirms “clean title,” except for the lender’s deed of trust, the lender pays the draw to the owner, who pays the general contractor, who pays the subcontractors. Once a subcontractor files a mechanic’s lien, however, the payment process can stop in its tracks. Working in reverse of the process laid out above, if the title company looks at the project’s land records and sees a mechanic’s lien, it will turn back to the lender and say, “You don’t have clean title.”Then, the lender tells the owner, “We cannot pay a draw until the mechanic’s How Mechanic’s Liens Disrupt the Payment Process
We file a lot of mechanic’s liens in our office, and a couple of questions often come up. First, clients ask, “Why should we file a mechanic’s lien instead of a normal lawsuit?”Then, when a lien is successful in getting the client paid, they sometimes ask, “What made that work so well?” For years, my stock answer has been, “Mechanic’s liens get the owner’s attention,”meaning that the money behind the project is now paying attention to the client’s unpaid invoices. But I recently read an opinion from the Supreme Court of Virginia that lays out the best answer I have seen to those questions. On a typical commercial construction project, the owner hires a general contractor, who hires subcontractors to work the project. Then, when subcontractors complete project work, they bill the general contractor, who in turn bills the owner for subcontractors’ work. But that isn’t the end of the payment story. On almost all commercial projects, the owner will need to borrow money to finance the project, so a lender is involved. And because that lender wants to protect its investment, it will put its own lien on the project’s land in the form of a deed of trust before the project even starts, similar to the way a bank puts a deed of trust on a home to secure its mortgage with Here is the answer. How Payment Flows on Commercial Projects
Continued on Back ...
jwyatt@harrisonlawgroup.com
www.HarrisonLawGroup.com
(410) 832-0000
... continued from Front
entails either paying our client right away or “bonding off” the lien so the lender can have clean title in exchange for an insurance company promising to pay our client’s valid invoices. In my experience, mechanic’s liens result in faster payment to subcontractors than any other mechanism. In the end, that is the answer to the question, “Why should we file a mechanic’s lien?” A lien can take your payment dispute from a general contractor’s (or owner’s) back burner list of things to do “someday” to their “Oh my gosh, the house is on fire,” list of things that have to be fixed today, right now, no exceptions. And for anyone wondering about the case that inspired me to write this article, it is George W. Kane, Inc. v. Nuscope, Inc., 243 Va. 503 (1992).
lien is off of the property.”Then the owner tells the general contractor, “We can’t pay your invoice until that mechanic’s lien is resolved.” Then — and here is the real kicker — the general contractor often has to turn around and tell every subcontractor on the project that it can’t pay invoices right now because the owner is withholding payment based on a mechanic’s lien. So, the net result of a mechanic’s lien can be to turn off the entire payment flow for a construction project. Now that’s leverage that goes all the way to the top! Sometimes when we are fighting to get clients paid, we send demand letters and make calls, and the other side simply ignores us. Then, if it is appropriate in a case, we file a mechanic’s lien. What happens after we file a mechanic’s lien? Inevitably, my phone rings and someone on the other side wants to have a serious discussion about our client’s unpaid invoices. Usually that discussion What Happens Next
If you want to learn more skills and tips about avoiding construction claim pitfalls, you can receive a free copy of my book, “The Subcontractor’s Roadmap to Getting Paid for Extra Work,” by emailing me at jwyatt@harrisonlawgroup.com.
-Jeremy Wyatt
jwyatt@harrisonlawgroup.com
www.HarrisonLawGroup.com
(410) 832-0000
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