{"product_id":"the-business-of-construction-contracting-isbn-9781394279111","title":"The Business of Construction Contracting","description":"\u003cp\u003e\u003cb\u003eExplore this deep dive into the business side of construction, including how to structure, organize, and operate a construction organization to maximize profit\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003eThe most visible work of construction contracting happens on the job site, but some of the most important aspects of running a construction business happen behind the scenes, on the financial and operations side. Construction is the second-most risk-intensive industry in the US, and both minimizing business failures and minimizing the damage that results from inevitable failures are critical. Structuring and managing a profitable construction business requires strategic sense and up-to-date knowledge. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eThe Business of Construction Contracting\u003c\/i\u003e describes and analyzes the business side of construction, with a detailed exploration of the major types of business failure and how to avoid them. It’s designed for construction professionals who understand that in this industry everybody faces risk exposure, and the companies that survive and thrive are the ones who understand how to recognize the risks and respond accordingly. It offers documented research findings, rooted in years of construction business experience, that can help both new and veteran business owners find success. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eThe Business of Construction Contracting \u003c\/i\u003ereaders will also find: \u003c\/p\u003e\u003cul\u003e\n\u003cli\u003eExploration of the concepts of flexible overhead, corporate, and financial self-analysis\u003c\/li\u003e\n\u003cli\u003eDetailed discussion of topics including cash flow thresholds, construction market cycles, and more\u003c\/li\u003e\n\u003cli\u003eThe latest industry technologies and techniques to manage a construction business\u003c\/li\u003e\n\u003c\/ul\u003e \u003cp\u003e\u003ci\u003eThe Business of Construction Contracting\u003c\/i\u003e is ideal for construction professionals – including general contractors, construction managers, and specialty contractors – as well as bonding and insurance professionals, construction attorneys, and vendors servicing the construction industry. \u003c\/p\u003e\u003cp\u003ePreface xi\u003c\/p\u003e \u003cp\u003eAbout the Authors xiii\u003c\/p\u003e \u003cp\u003e\u003cb\u003e1 The Construction Industry 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e1.1 A Brief History 3\u003c\/p\u003e \u003cp\u003e1.2 What’s Ahead? 5\u003c\/p\u003e \u003cp\u003e1.3 Industry Beliefs 6\u003c\/p\u003e \u003cp\u003e1.4 An Example 7\u003c\/p\u003e \u003cp\u003e1.5 How Many Ways? 8\u003c\/p\u003e \u003cp\u003e1.6 Evaluating a Construction Organization 10\u003c\/p\u003e \u003cp\u003e\u003cb\u003e2 Structure of a Construction Business 13\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e2.1 Organizational Structure 14\u003c\/p\u003e \u003cp\u003e2.2 Quality Decision-making 15\u003c\/p\u003e \u003cp\u003e2.3 Collaboration 17\u003c\/p\u003e \u003cp\u003e2.4 A Superior Process 18\u003c\/p\u003e \u003cp\u003e2.5 Business Planning 19\u003c\/p\u003e \u003cp\u003e2.6 Business Planning Strategies 20\u003c\/p\u003e \u003cp\u003e2.7 Overhead 22\u003c\/p\u003e \u003cp\u003e2.7.1 Incidental-growth Pattern 22\u003c\/p\u003e \u003cp\u003e2.7.2 Overhead and Organizational Structure 23\u003c\/p\u003e \u003cp\u003e2.7.3 Flexible Overhead 24\u003c\/p\u003e \u003cp\u003e2.8 Supporting Production in the Field 26\u003c\/p\u003e \u003cp\u003e\u003cb\u003e3 Construction Business Risks 29\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e3.1 Definitions 30\u003c\/p\u003e \u003cp\u003e3.2 Awareness of Risks 30\u003c\/p\u003e \u003cp\u003e3.3 Business-risk Categories 31\u003c\/p\u003e \u003cp\u003e3.4 Risk Management 32\u003c\/p\u003e \u003cp\u003e3.5 Financial Risks 33\u003c\/p\u003e \u003cp\u003e3.6 Inappropriate Industry Risks 34\u003c\/p\u003e \u003cp\u003e3.7 Risk Identification 35\u003c\/p\u003e \u003cp\u003e3.8 Profit Versus Value 36\u003c\/p\u003e \u003cp\u003e3.9 Financial-risk Measurement 38\u003c\/p\u003e \u003cp\u003e3.10 Operational Versus Financial Performance 38\u003c\/p\u003e \u003cp\u003e3.11 Gross-profit Changes 40\u003c\/p\u003e \u003cp\u003e3.12 Growth Risks 40\u003c\/p\u003e \u003cp\u003e3.12.1 Overhead 42\u003c\/p\u003e \u003cp\u003e3.12.2 Rate of Growth 42\u003c\/p\u003e \u003cp\u003e3.13 Management of Growth Risks 43\u003c\/p\u003e \u003cp\u003e3.14 Market Recovery Risks 44\u003c\/p\u003e \u003cp\u003e3.15 Summary 46\u003c\/p\u003e \u003cp\u003e\u003cb\u003e4 Common Elements of Construction Business Failure 47\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e4.1 Common Elements of Business Failure 49\u003c\/p\u003e \u003cp\u003e4.2 Increase in Project Size 51\u003c\/p\u003e \u003cp\u003e4.3 Expanding into New Geographic Areas 53\u003c\/p\u003e \u003cp\u003e4.4 Expanding into New Types of Construction 54\u003c\/p\u003e \u003cp\u003e4.5 Changes in Key Personnel 57\u003c\/p\u003e \u003cp\u003e4.6 Lack of Managerial Maturity 59\u003c\/p\u003e \u003cp\u003e4.7 Summary 60\u003c\/p\u003e \u003cp\u003e\u003cb\u003e5 Increase in Project Size 61\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e5.1 Limits of Growth 62\u003c\/p\u003e \u003cp\u003e5.2 Increased Risks with Larger Projects 62\u003c\/p\u003e \u003cp\u003eCase Study: Apartment Complex Disaster 64\u003c\/p\u003e \u003cp\u003e5.3 Underestimation of Project Size 67\u003c\/p\u003e \u003cp\u003eCase Study: Sewage Treatment Plant Failure 67\u003c\/p\u003e \u003cp\u003eCase Study: A Road to Nowhere 70\u003c\/p\u003e \u003cp\u003e5.4 Clients and Retainage 71\u003c\/p\u003e \u003cp\u003e5.5 Alternatives to Taking on Large Projects 72\u003c\/p\u003e \u003cp\u003e5.6 Summary 73\u003c\/p\u003e \u003cp\u003e\u003cb\u003e6 Changes in Geographic Area 75\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e6.1 Business in Your Normal Area 75\u003c\/p\u003e \u003cp\u003e6.2 Reasons for Changing Geographic Area 75\u003c\/p\u003e \u003cp\u003eCase Study: Project in a New Area 76\u003c\/p\u003e \u003cp\u003e6.2.1 Adding Insult to Injury 79\u003c\/p\u003e \u003cp\u003e6.3 Risk Management in Long-distance Projects 80\u003c\/p\u003e \u003cp\u003e6.4 Regional Offices 82\u003c\/p\u003e \u003cp\u003eCase Study: Regional Office 82\u003c\/p\u003e \u003cp\u003e6.4.1 Getting Spread Too Thin 83\u003c\/p\u003e \u003cp\u003e6.5 Establishing a Regional Office 84\u003c\/p\u003e \u003cp\u003e6.6 Contingency Plan 87\u003c\/p\u003e \u003cp\u003e6.7 The Wisdom of Withdrawal Planning 88\u003c\/p\u003e \u003cp\u003e6.8 Summary 89\u003c\/p\u003e \u003cp\u003e\u003cb\u003e7 Changes in Type of Construction 91\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e7.1 Reasons for Changes in Type of Work 91\u003c\/p\u003e \u003cp\u003e7.2 Lack of Experience 92\u003c\/p\u003e \u003cp\u003e7.3 Subtle Differences 94\u003c\/p\u003e \u003cp\u003e7.4 Recognition of Your Specialty 94\u003c\/p\u003e \u003cp\u003eCase Study: Forced Out of Business 95\u003c\/p\u003e \u003cp\u003eCase Study: A Mechanical Failure 97\u003c\/p\u003e \u003cp\u003e7.5 Union Versus Merit Shop 99\u003c\/p\u003e \u003cp\u003e7.6 The Importance of Knowing the Risks 100\u003c\/p\u003e \u003cp\u003e7.7 Volume Versus Profit 101\u003c\/p\u003e \u003cp\u003e7.8 Withdrawal Plan 101\u003c\/p\u003e \u003cp\u003e7.9 Summary 102\u003c\/p\u003e \u003cp\u003e\u003cb\u003e8 Changes in Key Personnel 103\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e8.1 Breakup of a Partnership 103\u003c\/p\u003e \u003cp\u003e8.2 Founders and Succession 104\u003c\/p\u003e \u003cp\u003e8.3 Inactive Founders 105\u003c\/p\u003e \u003cp\u003eCase Study: Succession 106\u003c\/p\u003e \u003cp\u003e8.4 Replacement of a Team Member 108\u003c\/p\u003e \u003cp\u003e8.5 Addition of a Key Person 109\u003c\/p\u003e \u003cp\u003e8.6 Management Dilution 109\u003c\/p\u003e \u003cp\u003eCase Study: Increase in Organizational Size 110\u003c\/p\u003e \u003cp\u003e8.7 Summary 111\u003c\/p\u003e \u003cp\u003e\u003cb\u003e9 Managerial Maturity 113\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e9.1 Importance of Management Skills 114\u003c\/p\u003e \u003cp\u003e9.2 Company Growth Phases 114\u003c\/p\u003e \u003cp\u003e9.3 Limit of Managerial Effectiveness 116\u003c\/p\u003e \u003cp\u003e9.4 Company Growth and Management Thresholds 116\u003c\/p\u003e \u003cp\u003e9.5 Telltale Signs of Insufficient Maturity 116\u003c\/p\u003e \u003cp\u003e9.6 Changes in Top Management 117\u003c\/p\u003e \u003cp\u003e9.7 Delegation of Authority 118\u003c\/p\u003e \u003cp\u003e9.8 Test of Delegation 119\u003c\/p\u003e \u003cp\u003eCase Study: Managerial Maturity 120\u003c\/p\u003e \u003cp\u003e9.9 Succession Planning 122\u003c\/p\u003e \u003cp\u003e9.10 Succession Issues 123\u003c\/p\u003e \u003cp\u003e9.11 Measuring Succession Progress 126\u003c\/p\u003e \u003cp\u003e9.12 Summary 129\u003c\/p\u003e \u003cp\u003e\u003cb\u003e10 Understanding Construction Accounting 131\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e10.1 Annual Financial Statements 132\u003c\/p\u003e \u003cp\u003e10.2 Internal and External Financial Statements 132\u003c\/p\u003e \u003cp\u003e10.3 Management Accounting Inputs 134\u003c\/p\u003e \u003cp\u003e10.4 Methods of Accounting 135\u003c\/p\u003e \u003cp\u003e10.5 Accuracy of Accounting 135\u003c\/p\u003e \u003cp\u003e10.6 Percentage of Work Completed 137\u003c\/p\u003e \u003cp\u003e10.7 Work in Progress 138\u003c\/p\u003e \u003cp\u003eCase Study: Profit Margin Decline 139\u003c\/p\u003e \u003cp\u003e10.8 How to Account for Work in Progress 140\u003c\/p\u003e \u003cp\u003e10.8.1 Contract Price 141\u003c\/p\u003e \u003cp\u003e10.8.2 Direct Costs to Date 141\u003c\/p\u003e \u003cp\u003e10.8.3 Estimated Cost to Complete Remaining Work 142\u003c\/p\u003e \u003cp\u003e10.8.4 Amount Billed to Date 142\u003c\/p\u003e \u003cp\u003e10.8.5 Notes About Accounting for Work in Progress 142\u003c\/p\u003e \u003cp\u003e10.9 Summary 143\u003c\/p\u003e \u003cp\u003e\u003cb\u003e11 Construction Industry Cycles 145\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e11.1 Market Decline 146\u003c\/p\u003e \u003cp\u003e11.2 Market Recovery 148\u003c\/p\u003e \u003cp\u003e11.3 Lessons Learned 149\u003c\/p\u003e \u003cp\u003e11.4 Company Downsizing 149\u003c\/p\u003e \u003cp\u003e11.5 Rightsizing 151\u003c\/p\u003e \u003cp\u003e11.6 Overhead Research 152\u003c\/p\u003e \u003cp\u003e11.7 Flexible Overhead 152\u003c\/p\u003e \u003cp\u003e11.7.1 Overhead Survey 153\u003c\/p\u003e \u003cp\u003eCase Study: Overhead 154\u003c\/p\u003e \u003cp\u003e11.8 Expanding Flexibility 156\u003c\/p\u003e \u003cp\u003e11.9 Equipment Ownership 157\u003c\/p\u003e \u003cp\u003e11.10 Flexibility in Project Selection 157\u003c\/p\u003e \u003cp\u003e11.11 False Beliefs 159\u003c\/p\u003e \u003cp\u003eCase Study: Profitable and Unprofitable Work 159\u003c\/p\u003e \u003cp\u003e11.12 Losing Projects 160\u003c\/p\u003e \u003cp\u003e11.13 The Importance of Experience 161\u003c\/p\u003e \u003cp\u003e11.14 Summary 162\u003c\/p\u003e \u003cp\u003e\u003cb\u003e12 The Science of Project Selection 163\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e12.1 Industry Beliefs 165\u003c\/p\u003e \u003cp\u003e12.2 Profitable and Unprofitable Work 166\u003c\/p\u003e \u003cp\u003e12.3 Profitable Project Selection 167\u003c\/p\u003e \u003cp\u003e12.3.1 Project Size 168\u003c\/p\u003e \u003cp\u003e12.3.2 Project Type 169\u003c\/p\u003e \u003cp\u003e12.3.3 Geographic Area 169\u003c\/p\u003e \u003cp\u003e12.3.4 Project Team 170\u003c\/p\u003e \u003cp\u003e12.3.5 Unusual Project Features 170\u003c\/p\u003e \u003cp\u003e12.4 Measurement of Project Risk 170\u003c\/p\u003e \u003cp\u003e12.5 Impacts of Not Taking on Losing Projects 171\u003c\/p\u003e \u003cp\u003e12.6 Flexible Overhead 172\u003c\/p\u003e \u003cp\u003e12.7 Conclusion 172\u003c\/p\u003e \u003cp\u003e\u003cb\u003e13 The Project Selection Program 173\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e13.1 The Origin of the Idea 175\u003c\/p\u003e \u003cp\u003e13.1.1 Size of Project 176\u003c\/p\u003e \u003cp\u003e13.1.2 Type of Project 176\u003c\/p\u003e \u003cp\u003e13.1.3 Project Location 177\u003c\/p\u003e \u003cp\u003e13.1.4 Project Team 177\u003c\/p\u003e \u003cp\u003e13.1.5 Project Complexity 177\u003c\/p\u003e \u003cp\u003e13.2 Project Selection Program 178\u003c\/p\u003e \u003cp\u003e13.3 Program Questions 180\u003c\/p\u003e \u003cp\u003eSection 1 – Project Fit 180\u003c\/p\u003e \u003cp\u003eSection 2 – Firm’s Experience 181\u003c\/p\u003e \u003cp\u003eSection 3 – Project Complexity 181\u003c\/p\u003e \u003cp\u003eSection 4 – Financial and Cash Flow Impacts 183\u003c\/p\u003e \u003cp\u003eSection 5 – Contract Issues 183\u003c\/p\u003e \u003cp\u003eProject Fit Issues 184\u003c\/p\u003e \u003cp\u003eSection 6 – Additional Issues to Consider (Not Scored) 184\u003c\/p\u003e \u003cp\u003e13.4 Scoring a Project 186\u003c\/p\u003e \u003cp\u003e13.4.1 Project Size 187\u003c\/p\u003e \u003cp\u003e13.4.2 Project Type 188\u003c\/p\u003e \u003cp\u003e13.4.3 Geographic Area 188\u003c\/p\u003e \u003cp\u003e13.4.4 Project Team 188\u003c\/p\u003e \u003cp\u003e13.4.5 Unusual Project Features 189\u003c\/p\u003e \u003cp\u003e13.5 Conclusion 189\u003c\/p\u003e \u003cp\u003e\u003cb\u003e14 Project Controls 191\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e14.1 The Evolution of a Construction Business 192\u003c\/p\u003e \u003cp\u003e14.2 Construction Is a Service Business 193\u003c\/p\u003e \u003cp\u003e14.3 Productivity Analysis 194\u003c\/p\u003e \u003cp\u003e14.4 Schedule 197\u003c\/p\u003e \u003cp\u003e14.5 Budget 200\u003c\/p\u003e \u003cp\u003e14.6 Earned Value Management 203\u003c\/p\u003e \u003cp\u003e14.6.1 Measuring Progress 204\u003c\/p\u003e \u003cp\u003e14.6.2 Earned Value and Cost Performance 205\u003c\/p\u003e \u003cp\u003e14.6.3 Evaluating Cost and Schedule Together 207\u003c\/p\u003e \u003cp\u003e14.6.4 Forecasting 208\u003c\/p\u003e \u003cp\u003e14.6.5 Reporting 209\u003c\/p\u003e \u003cp\u003e14.7 Conclusion 211\u003c\/p\u003e \u003cp\u003eChapter Review Questions 213\u003c\/p\u003e \u003cp\u003eAnswer Key for Chapter Review Questions 231\u003c\/p\u003e \u003cp\u003eIndex 233\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eThomas C. Schleifer, Ph.D.,\u003c\/b\u003e is a turnaround expert and the founder of the largest international consultancy firm serving the contract surety industry. He was also an Eminent Scholar at Arizona State University’s Del E. Webb School of Construction. He joined the construction industry at age 16 and has amassed more than 60 years of experience. This combination of practical, hands-on experience as a contractor and experience assisting financially distressed companies has given Dr. Schleifer a unique perspective on the causes of business failure and how to avoid them. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eAaron B. Cohen, MS, CPC,\u003c\/b\u003e served for 10 years as the President and Owner of Apollo Trenchless, Inc. and has over 15 years of experience working as a project manager and estimator on infrastructure and utility construction projects. He held the Associated General Contractors (AGC) Lecturer position at Arizona State University where he currently teaches courses in infrastructure estimating and project controls. Currently Aaron is Director, Estimating Products at InEight, Inc. where he helps define and build software solutions for the construction industry.   \u003c\/p\u003e\u003cp\u003e\u003cb\u003eExplore this deep dive into the business side of construction, including how to structure, organize, and operate a construction organization to maximize profit\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003eThe most visible work of construction contracting happens on the job site, but some of the most important aspects of running a construction business happen behind the scenes, on the financial and operations side. Construction is the second-most risk-intensive industry in the US, and both minimizing business failures and minimizing the damage that results from inevitable failures are critical. Structuring and managing a profitable construction business requires strategic sense and up-to-date knowledge. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eThe Business of Construction Contracting\u003c\/i\u003e describes and analyzes the business side of construction, with a detailed exploration of the major types of business failure and how to avoid them. It’s designed for construction professionals who understand that in this industry everybody faces risk exposure, and the companies that survive and thrive are the ones who understand how to recognize the risks and respond accordingly. It offers documented research findings, rooted in years of construction business experience, that can help both new and veteran business owners find success. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eThe Business of Construction Contracting \u003c\/i\u003ereaders will also find: \u003c\/p\u003e\u003cul\u003e\n\u003cli\u003eExploration of the concepts of flexible overhead, corporate, and financial self-analysis\u003c\/li\u003e\n\u003cli\u003eDetailed discussion of topics including cash flow thresholds, construction market cycles, and more\u003c\/li\u003e\n\u003cli\u003eThe latest industry technologies and techniques to manage a construction business\u003c\/li\u003e\n\u003c\/ul\u003e \u003cp\u003e\u003ci\u003eThe Business of Construction Contracting\u003c\/i\u003e is ideal for construction professionals – including general contractors, construction managers, and specialty contractors – as well as bonding and insurance professionals, construction attorneys, and vendors servicing the construction industry.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47990179332325,"sku":"NP9781394279111","price":75.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781394279111.jpg?v=1761786807","url":"https:\/\/k12savings.com\/products\/the-business-of-construction-contracting-isbn-9781394279111","provider":"K12savings","version":"1.0","type":"link"}