You mobilized your new project, broke!
The Challenge
You just won a $60 million project. Signed the contract. Got the notice to proceed. Your team is “ready” to roll, and the owner wanted boots on the ground yesterday.
So you do what every contractor does. You mobilize!
Equipment gets ordered. First payroll goes out. Material deposits hit your accounts. Insurance, bonds, permits, mobilization costs the owner will not reimburse for 60 days, plus the terrible 10% retention terms. You just pulled a massive loan from your line of credit before anyone even broke ground, so you can cash flow the project.
And now you are paying interest on that money every single day until you can bill it back.
Here is where it gets expensive. The PM is still wrapping up two other jobs. Punch lists, final billing, and warranty calls. The PM is trying to start the new project, butis doing it between everything else. The PM puts together a schedule because the contract needs one, AND NOT with the intention. It has dates and activities, but nobody is actually using it to plan work.
The super shows up three days before crews arrive, OR maybe even the day of. Walking the site for the first time reveals that half the stuff from the estimate does not match reality. The laydown area is not where anyone thought. Access is tighter than the drawings showed. The super starts scrambling to figure out the actual plan, not to mention keep crews “busy” until all this chaos is figured out, which never does because it just compounds.
Submittals, Purchase Orders, and contracts have barely been started, if any. You cannot order materials yet. Your subs cannot start fabrication. The schedule nobody really built with intention is already sliding. But who cares, because your 30-year “seasoned” supers will figure it out, right??!!
Crews show up on time because the owner is watching. But workers are standing around waiting for direction, materials, or access because the coordination work never happened.
Design gaps that should have been caught weeks ago are now stopping work. Every RFI adds days to the schedule.
You are making it up as you go, and everyone knows it. You can’t “fake it till you make it” in this business!
The Impact
You pulled a major loan to start this job. Every day that money sits on your line of credit, you are paying interest. Every day you cannot bill clean and recover costs, that interest keeps piling up.
Your first pay application is a mess. Nobody tracked costs correctly because everyone was putting out fires. You try to bill for your first month of work, but only get half approved because the documentation is incomplete. Now, instead of recovering your mobilization costs, you are pulling even more from your line just to keep going.
You are several months into a job that should be cash-flowing by now, and your line of credit is growing instead of shrinking.
Your super is frustrated. The super showed up to run work, not figure out what the plan should have been. Your foremen are waiting on decisions. The good ones are getting annoyed. The inexperienced ones are making calls they should not be making.
Your PM is drowning. Working nights and weekends and still behind. The PM is starting to look at other opportunities.
The owner is asking questions. Work looks slow. The schedule is not being hit. There is an edge in the emails now.
And you are getting dragged into daily decisions you should not be touching. The project that was supposed to run itself is eating your time. You are lying awake doing math on whether this thing will make or lose money.
Here is the painful part. Your team has decades of experience. But somehow every project starts the same way. Reactive + Chaotic = Expensive
The profit you fought to win in the bid is bleeding out before you hit 10% complete.
The Shift
When working with clients, I always tell them the same thing. The weeks before mobilization are the most valuable weeks of the entire project. Not the most exciting, just yet. The most valuable!
This is when you stop the chaos before it starts.
Bring your full management team on before crews show up. Not only for properly structured kickoff meetings done with intention, BUT to also build the system that will control the job from day one.
A new project is like starting a new business, YOU MUST HAVE A PLAN!
The PM and super need to sit with the estimate and expose every gap between what was bid and what is actually needed. Then bring key subs and foremen into the room and build a real plan together. Not a schedule to satisfy the contract. A plan everyone believes because they helped create it. Again, I’m going to use my new favorite words, with INTENTION!
This is where you identify the material lead times that will drive everything. This is where you catch the coordination conflicts before they cost you weeks. This is where you set up the communication rhythm that keeps office and field aligned instead of guessing. This is where you assign responsibilities to outcomes that will drive the project forward so everyone is accountable.
It costs you two weeks of management time before billing starts. It feels expensive when cash is going out the door.
But here is what it buys you. Your first pay app gets approved without pushback because your documentation is tight. You recover mobilization costs a lot faster. You stop paying interest on money you should have already billed back. Your team starts the job aligned instead of spending three months trying to get on the same page.
That upfront investment is the difference between controlling a project from day one and spending the first quarter trying to recover from a terrible start.
The Closing
The fastest way to kill profit and cash flow on big work is mobilizing cheap and reactive. You think you are saving money keeping the team lean during startup. What you are actually doing is guaranteeing you pay interest longer, bill slower, and fight problems that planning would have prevented.
Your team knows how to build. The problem is everyone has their own system and when you skip startup planning, those systems crash into each other in the field.
The contractors who protect margin are not the ones who mobilize fastest. They are the ones who mobilize right. They invest up front to build alignment and create a system everyone follows. They bill clean from day one. They recover mobilization costs in weeks not months. They finish on schedule and on budget because they controlled it from the beginning.
You built this company being good at construction. You scale it by being great at startup. The difference is a system that unifies how your people hand off work, plan execution, and coordinate in the field.
That system does not build itself. But when you install it before the first shovel hits dirt, everything else gets easier.
Gerard Aliberti
Pro-Accel,
Owner
- If you're ready to create real alignment between your estimating and field teams, reach out to me at jerry@pro-accel.com
- If you missed my Webinar with Patrick Shurney on November 13th and would like to purchase the replay for $79, click here https://3pcllc.com/replay-from-builder-to-ceo
- Enjoying this newsletter? Please pass it along to your colleagues and friends, and have them sign up here: https://www.pro-accel.com/#Newsletter
- If you like Jerry's insights, follow him on LinkedIn here linkedin.com/in/jerry-aliberti
