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Thursday,January 8, 2015

Every 5 times we lose a day, We've lost a week

The famous inventor, politician and scientist Benjamin Franklin coined the phrase “Time is Money”. Saving time saves money – for our own firm, but also for all of the project stakeholders. The sooner a project is completed, Architects have to attend less meetings, produce less site minutes, and approve less progress claims. Clients pay less rent, and get their asset sooner.

We are always trying to be as efficient as we can on site, following the ethos that “Every 5 times we lose a day, we've lost a week!”. Some of our jobs take a year or more to complete. It’s easy during the course of that time to have let slip five individual days where we weren’t as efficient as we would like – the truth is that that costs everyone a significant amount of money, so we’re always focused on not taking our eyes off the ball!

Thursday,January 8, 2015

Building cheap is expensive

Living in Australia, we have many South Africans now living amongst us, my wife being one of them. They have brought with them many great parts of their culture – Biltong being my personal favourite!

One of my favourite sayings in Afrikaans that I’ve picked up from my wife’s family is "Goedkoop is duurkoop". Literally translated as “Buying cheap is expensive”. This is so true in the building industry – where building is not a commodity.

Some people get 3, 4, 5, or even more quotes and somehow believe that from all of the tenderers they will receive exactly the same thing. As such, they can go with the cheapest price!

This may be the case if you are looking for a Sony XYZ123 Television, as whatever shop you go to you will get the same product – but with building there are so many more variables to consider that just price, it often pays to be very wary of the lowest price, particularly if that price is significantly lower than everyone else.

Thursday,January 8, 2015

Rule #2 - Don't teach a bricklayer how to lay bricks

If the HH Rule #1 in building is “Builders don’t build”, and that as builders we are there to manage others; then hand-in-hand goes HH Rule #2 is “Don’t teach a bricklayer how to lay bricks”.

Over 80% of the work done on our building projects is done by our subcontractors. If we have to teach our subcontractors how to do their job, they’re the wrong guys for us. Our job is to tell them what we want done, for how much, when they need to start, and when they need to finish!

We have spent the last 25 years filtering the wheat from the chaff so that all we’ve got left are the best quality tradesmen and craftsmen in their chosen fields, giving our clients the peace of mind that their project will be built, and finished only to the highest standards.

The other side to this coin is that we have established a fantastic resource of experts in their respective field. Not only don’t we want to tell people how to do their job, we want to use and benefit from their advice, experience, and expertise!

We treat our subcontractors & suppliers as PARTNERS. We pay them well, communicate with them well, and work with them - not against them, and manage them so that they, and we can deliver your project to the level you expect.

Thursday,January 8, 2015

The "Outlook"

"Those who fail to plan, plan to fail" - Anonymous.

Yet again, if builders don't build, and we're mainly there to manage, the first thing we've got to do is plan. Every person on our sites should know what the plan is for them according to our "outlook" philosophy.

Our Labourers should know what's happening over the next 2 days.

Carpenters should know what's happening over the next 2 weeks so they can have the right tools and materials available when needed.

The site foreman should know what's in store for the next 2 months and keep the whole team abreast of his programme as well. When he needs them to start, and what needs to be complete so that they can; and just as importantly when he needs them to finish.

The Project Manager should have an outlook 2-4 months, if not more - lining up the trades and confirming the design details to come so that the job can continue seamlessly.

Wednesday,July 9, 2014

Managing a great Building business

I dialled my solicitor today, and didn’t even have to look for the number – I know it by heart.

Whether it’s drafting HH building contracts, proofing contracts as part of tenders, creating subcontract agreements, or just giving me some general advice, it’s amazing how often I have to pick up the phone to speak to him, considering we have very few legal “disputes” to deal with, which is what most people would think you need a lawyer for.

It occurred to me and only reinforced my opinion of how important it is to not only focus on building great houses, but to also manage a great building business. We could not manage the successful enterprise we currently operate with the continued support of so many different consultants, in such varied fields as:

  1. Accounting
  2. Banking/Finance
  3. Legal
  4. Insurances – Public Liability, Construction works, HOWI, Vehicles, Office, Warehouse etc etc
  5. Workers Comp
  6. IT
  7. Mobile phones & iPad contracts
  8. Sales & Marketing

Wednesday, August 14, 2013

The Hole

The following is a mantra we try and live by @ HH. It’s very simple, but very effective.

A man can dig a good sized hole in 4 days.

4 men can dig the same hole in 1 day.

16 men can’t dig that hole in 2 hours.

Sometimes throwing labour at a task cannot help, as a sequence must be followed – but often the same task can get done much quicker if we plan ahead and throw a bit of extra labour at it. If we throw too much, they just get in each other’s way.

However - if the hole isn’t really critical, and we manage get the hole done in one day, what do we do with the four guys for the next three days! It might be better to just keep the one guy busy for the best part of the week on his own.

Finding the right balance and knowing where and when to push (and when we can’t) has been one of the secrets to our success.

Saturday, December 1, 2012

Opinions on the State of Universities

I bumped in to some friends of mine recently, whose son has just finished the HSC. He is thinking of doing Building @ Uni, among other things, but is concerned he might not have the marks to get in. They definitely want all their kids to go to University so they’ll get good careers. My experience is that the HSC is not the be-all and end-all of education. Some kids mature a bit later, and get their eventually. One of my closest friends worked as a waiter in a hotel for 3 years before deciding to settle down, and is now on big money overseas in an advertising role.

When graduates come to me for a position @ HH, I never even look at their HSC or Uni grades. It’s far more important to me who the person is. We can teach them to be great builders. Estimating, planning, and managing things can be learnt. Working hard, being honest, ethical, punctual, dedicated, able to work as part of a team, and using your own initiative are all in someone’s DNA, and can never be taught – even if they get 99.9% in the HSC.

Wednesday, August 17, 2011

Apprentices are like a fine bottle of wine!

Apprentices are the lifeblood of our industry. Young men (mostly) usually come out of High School, looking for a career in Carpentry or Building. They gain employment with a builder to learn the ropes, and put in to practice the training & skills they learn in the classroom. They also get the chance to earn money while they are studying towards their chosen career. In return their employers get keen, partially-skilled workers that are relatively cheap labour, and the opportunity to mould them in to the builders they need for their businesses future. Several of our best foremen today started out as our own apprentices.

Many builders complain about the quality of the apprentices available. Certainly, I have also seen many apprentices that have been abused by their employers – paid a pittance, and not trained at all – just used as half-price labour. The system is by no means perfect.

Gone are the days of leaving school at 16 after the School Certificate, which I believe is being abolished anyway. The majority of the apprentices that we see are fresh out of school, or back from a “gap-year” after school. At 17, 18, or 19 years old, some of these kids are somewhat immature, inexperienced, and as we have become accustomed to in the “Gen Y” mould – not exactly sure of what they want to do with their lives. Obviously this is a generalisation, but you get the idea.

What I have found extremely refreshing over the last few years have been the influx, in our firm anyway, of Mature-Age Apprentices - guys that are 25 or so, or older, that have worked in other industries or fields (one of ours was even a Commando in the Army for 7 years!). Typically they are a lot more mature, have travelled the world, and are more focused, as they now seek to settle down and properly pursue their chosen direction and career. Some employers may see starting at the bottom at their age as a disadvantage, but I believe their life experience in other areas helps them make better decisions, work better under pressure, and motivate them to drive harder towards their chosen goals.

"And so I say – Apprentices are like a fine bottle of wine – the older they are the better!"

Tuesday, August 16, 2011

Plumbers are Plumbing BUSINESSES too!

Last financial year, we gave one of our plumbers more than $500,000 worth of business. The same for one of our electricians. And our concretor, and our window fabricator…….

With the cost of building rising and rising these days, and the complexity of the houses growing and growing, it is not uncommon for a “Tradie or small Builder” with even 4 or 6 employees to be turning-over more than a million dollars a year! That’s an average of $20,000 a week, every week of the year.

Obviously the same can be said for most small builders.

Who trains these guys to run million-dollar businesses? Certainly at TAFE, apprentices that finish their education at the age of 21 or 22 have not been trained enough to manage that kind of business or cashflow. These days we have BAS, GST, PAYG, Various Taxes, Wages, Super, Workers Comp, Licences, Payroll, RDO’s etc. Builders at least get to go and do the Cert IV Builders course at TAFE, but I hardly think that prepares anyone for spending $4-5,000 a day. Especially when they have 5-10% retention withheld from their claims, and they only get paid once a month. Combine this with the good tradesmen’s businesses growing at dramatic rates due to referrals and their business is at risk if they aren’t properly prepared.

Most of the guys that I hear that go out of business are not necessarily bad tradesmen or builders – quite the opposite. It’s the fact that they are very good at what they do that they decide to go in to business for themselves in the first place. I think rather that while (In my experience, although) they may be good plumbers for example, they are unprepared for, and not adequately trained to operate a PLUMBING BUSINESS!

I’m not sure what the answer is. Certainly getting a certain level of Home Warranty Insurance is making builders demonstrate that they can run a good business, but tradies don’t have this same requirement. Maybe all licencees should have to do a small business management course before they get their licence?

Wednesday, August 10, 2011

Fixed Price (Lump Sum) Contracts vs. Construction Management (Cost-Plus)

People are always asking me which is the best form of contract to enter into when building.

One of my clients, a retired accountant, once told me – “If you give me a fixed price for this job, one of us is gonna get screwed in the end!”. I tend to agree. It all comes down to risk, and who takes it on.

If someone is risk averse, or on a tight budget, I would recommend them to proceed on a fixed-price basis, and as much as possible detail and document the project. Have as few PCs as possible, and if you have PCs that they be based on a quote of some sort, thus a reasonable amount. The most important thing then, once the contract is signed, is to be disciplined in staying within your budget, and not making any changes along the way. One should always have a contingency sum in your overall budget for deisgn, structural or regulatory issues that arise during the project.

Contrary to popular belief, I don’t think Cost-plus should be a decision based on saving cost, but rather control. If a client wishes to have ultimate control over what gets done, by whom, and for how much then cost-plus is the way to go. Obviously, the majority of the risk in the project then sits with the client. The most critical factor in the successful outcome and delivery of a cost-plus project is obviously the budget. The problem arises in the uncertainty of what exactly we are budgeting for? If we knew the details, chances are that the project would have been done on a lump-sum basis! So the key is to make the budget figures REALISTIC, and update the budget on a regular basis.

Tuesday, July 16, 2011

Rule #1 - Builders don’t build.

This is my first attempt at blogging, and although I find it intriguing, and I hope you do too, let me be the first to say that English was not one of my better subjects as I wandered the halls of Sydney High School more than 20 years ago!

I have boasted (mostly to the guys in the office) that I could write a book based on the experiences I have had building houses for people over the years, and the lessons learned. That is obviously a pretty unlikely event, but then it occurred to me that I could publish it a different way – Hence this Blog!

On my first day of the Building course @ UNSW, one of the lecturers told us two things that have stuck with me ever since:

1. After 4 years studying, you are most likely to be unemployed. [Such was the state of the building industry in the early ‘90s - then we won the bid for the 2000 Olympics, and the industry has never looked back since], and

2. Builder’s don’t build.

I was ready to get up and admit defeat right there and then. Obviously this was not the course for me! But I stayed, and I’m glad I did, because they were right – Builders DON’T build – They manage!

One definition of “Management” is to plan, organise, direct and control. In very simple terms, Builders need to Plan what needs to get done (study the plans, set goals and how to achieve them); Organise a team to do it (get the right team together that will actually DO the work); Direct people what to do, and when; & finally to Control, or monitor whether they are actually hitting the goals of time, cost, quality, & service.

I actually can’t stress how important this philosophy is. Builders are not excavators, or bricklayers, nor concretors, window fabricators, roofers or painters. They are not even carpenters, though most of the best builders are trained as carpenters. All these people help BUILD the house, but the Builder is the conductor that puts all these musicians together in to an orchestra, and makes sure they are all playing the same set of music, in the right key, and finish on time.

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