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You were busy all year. The margin still came in thin.
You quote thirty…
You quote thirty…
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Mike Reardon posted thisIn construction, you don't export anything. Your costs still moved last year, and again this past week. The annexes cover building materials, machinery, plastics, and electrical goods. Your supplier is exposed, so your input price moves whenever any of your job crosses a border. Here is what makes it awkward. You priced the jobs you are building right now before any of this. On a fixed-price contract signed in the spring, the only lever left is a change-order conversation, and the client who did not cause the problem is involved. Most firms handle that one job at a time, over the phone, with whoever picks up. That is the expensive part. The duty is a one-time increase, and you can measure it. What costs more is that every rule change, every material spike, and every code update runs through the same six-week scramble, because nobody ever built the path it should travel down. There will be another change. There always is. When your material costs moved last year, this spring, and recently, how many days passed before that showed up in a quote you sent out? You know there is a way to fix it?
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Mike Reardon shared thisYou are valuable, and you are a valuable asset to a business. "Make sure you are somewhere you are also valued."Mike Reardon shared thisThe night of the plane crash, my company did not call to check on me. They did not even call my wife, who was hundreds of miles away in Charlotte with our four kids, watching the news and not knowing if I was alive. The next day I flew home. I stopped by the office still wearing the Red Cross sweat suit a volunteer had given me the night before, mostly so they could see with their own eyes that I was still alive. My regional manager looked at me and said, "You're going on that business trip next week, right?" I did not know what to say. I had just survived a plane crash. I had been the last person out of an aircraft in the Hudson River. And the message from the company I had given years of my life to was, essentially, will you still make the trip. I did go on that trip. It was a rough ride. But the moment that really crystallized it came a year later. Several of us from Flight 1549 were in New York promoting a book. One passenger talked about how his company sent a private plane, flew him home, and gave him weeks off. A woman said her CEO personally flew his private plane to New York, brought her back to Atlanta, and told her to take all the time she needed. Then it was my turn to share. All I could say was, "They didn't even check on me, and they asked me to go back to work the next week." That was the moment I knew my focus had to change. What I was doing was no longer working for me. I do not share this with bitterness. It was not the company , it was my manager. That moment was a gift, because it forced me to look honestly at where I was pouring my life and whether it was pouring anything back. Most people never get a wake-up call that loud. They just keep going, year after year, loyal to something that would replace them in a week. So let me be your wake-up call instead. Look honestly at where you are spending your life right now. Ask whether it would take care of you the way you are taking care of it. You are valuable. Make sure you are somewhere you are also valued.
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Mike Reardon posted thisSixty percent of your sales go south. That was a strength for twenty years. Last year, now last week, it became a number your bank asks about. Here is the part that does not get said out loud. The tariff did not create the exposure. It made it visible. A business that sells most of what it makes to one country, through a handful of buyers, has been carrying that position for years. Nothing on the financial statements was ever labeled with it. There is money on the table to change it. The federal announcement on 25 August put another $1.5 billion into the Regional Tariff Response Initiative and lifts the non-repayable cap from $1 million to $3 million in September. That money funds a project: equipment, automation, a new market. It does not fund the part that takes eighteen months. Selling more of what you already sell and opening a market you have never sold into are two different jobs. New buyer, new spec question, new lead-time promise, and the same quoting process built for three repeat customers who already knew what they wanted. The grant pays for the machine. What happens after it lands is yours. When you last opened a new market, how long did it take for the second order to arrive without you in the room? Do you know how to fix it?
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Mike Reardon posted thisYour best estimator gives notice on a Tuesday. By Thursday, you're the one pricing the job. The way he priced it was never written down anywhere. It lived in his head, and now it's in his car. Call that what it is. It isn't a process. It's a dependency with a name and a phone number. The cost isn't only the scramble this month. It shows up later, in a room you're not in yet, while somebody decides what your business is worth to them. I went looking for the number buyers take off for it. Five sources, five different ranges, and not one traced to a study you can actually read so that I won't be quoting you. The mechanism I will state. A buyer discounts what arrives through one person, because it leaves with that person. A process that can't be run from paper isn't an asset he's buying. It's a person he has to hope stays. Bain and StepStone put this to just over a hundred private equity professionals in December and January. With multiples flat, returns have to come from operations. Small self-selected sample, so read it as direction rather than measurement. The direction isn't subtle. Sometimes the person is the process, and for a while that's fine. A five-person shop doesn't need a manual. The trouble starts when the business gets bigger than the memory holding it up. The lever is a process a stranger could run from what's written. The number is the result of the test below, and it's yours, not mine. In my experience, the timeline is about a quarter f r the handful of processes that actually carry the revenue. A longer version will be available on the website for the operating-partner side. In the meantime, if you were out for 90 days starting Monday, which parts of the business would run from what's on paper, and which would sit and wait for you?
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Mike Reardon posted thisTwo things landed on your desk this year, and they look unrelated. One is a note from a customer's procurement group asking you to certify where your steel came from and keep the records on file. The other is the thought you have on the drive home about what happens here when you stop, as founder, stop working. They are the same test. Federal procurement rules changed in December 2025. Canadian suppliers and Canadian content now get priority in strategic federal buys, and certain construction and defense contracts must use steel, aluminum, and wood manufactured or processed in Canada, with certification and record-keeping attached. In June 2026, the threshold dropped from $25 million to $5 million, which pulls the requirement down the chain to the people who supply the people who win the work. Qualification is a paperwork test before it is a capability test. The shop that can trace a coil back to a mill certificate in an afternoon gets on the list. The shop where that lives in one person's memory does not, no matter how good the welds are. Now the drive home. A buyer seeking to underwrite your operation asks where a job goes after the quote, who touches it, how long it sits between hands, and what happens to all of it when you are not in the building. Both are asking the same question in different words. Does your business know how it works, or does one person in the business know how it works? Fair case against this. By late June, fourteen contracts worth $726 million had been awarded under the policy. That is a small number, and most of it lands with primes rather than with a $12 million fabricator. Nobody should reorganize a shop based on a press release. That is why the work isn't chasing the contract. It's documented enough that either door opens when you decide which one to walk through. If a prime asked for your traceability file this week, would you send it, or would you go and ask someone?
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Mike Reardon shared thisUse "Strive for relevance" as your operating theme. It will improve outcomes significantly. It is similar to another quote, paraphrased: "Tell them what you want, then stand back and be amazed at what they can do." General Patton said it; his team was the first to move tanks over the Italian mountains. Subsequently, they surprised the heck out of the Germans. What does this mean in your business? Be clear in your strategy as you remove assumptions. It defines operations, which in turn influences performance. If the team engages, you are almost guaranteed success.Mike Reardon shared thisEvery school year, the same tired boxing match breaks out. In this corner is the "Screens are frying our kids' brains, ban them, bring back pencils and books!" argument. In the other, "Paper is a relic, digitize everything!" I've spent decades watching people make major unforced blunders because of assumptions based on fear, not facts. At Semco, everyone swore letting workers set their own hours would lead to chaos. Wrong. The chaos was in our heads. Education is repeating the mistake. In Lumiar schools, mornings begin with an exercise called Reading the World. Kids pull the day's news from digital media and argue about it across a table. Then a screen lights up...it's students live from the very place where the news is happening! A Master—a flesh-and-blood expert, knowledgeable about the issue at hand—joins remotely. Pencils scribble, ideas are shared, disagreements rise and fall, kids laugh. Screens, books, debate, friendship, expertise, all in one messy, glorious hour. That's Relevance-Based Learning. Kids care about it because they get it. Students don't disengage because of screens. They disengage because the material means nothing to them. Screens versus pencils is a false dilemma. Let's retire it and strive for relevance.
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Mike Reardon posted thisYou have a number in your head for what your business is worth. It probably came from a multiple somebody quoted you, or from what a competitor down the road sold for three years ago. Something moved underneath that number, and it did not make the trade press. Since 2022, roughly 78 private-equity-backed companies have gone public on US exchanges. In the five years before that, the figure was 424. Those are windows of different length, so read it as direction rather than arithmetic. The buyers who set the price for businesses like yours are having trouble getting their own money out of the ones they already own. For about twenty years, much of the return came from buying at one multiple and selling at a higher one. That part is not working right now. So the return has to come out of the operation instead. A buyer underwriting an operation asks different questions than a buyer underwriting a story. They stop asking what you sold last year. They start asking where a job goes after the quote, who touches it, how long it sits between hands, and what happens to all of that when you are not in the building. Fair case against this. If you make something scarce and your order book is full for two years, someone will pay up regardless of how the place runs. That happens. It is not most businesses. If a buyer asked to see how a job moves from quote to cash, would you hand them a document, or would you walk them through it yourself?
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Mike Reardon shared thisThe tool went in nine months ago. Ask anyone on the floor what actually changed. Ask about how the job gets done, and you get a pause. Gallup asked that question properly. In companies that have implemented AI, 12% of employees strongly agree it has changed how work gets done. Swipe for the four numbers, the sequence, and a count you can run on one of your own processes this week. Take the process you would hand a new hire on Monday. How many of its steps are written down somewhere he could follow without asking anyone?
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Mike Reardon shared thisWhat absorbed scope costs, and how to work it out with your own number.Mike Reardon shared this💸 The most expensive term in construction might just be "no worries." Being accommodating is how you keep a client, but absorbing scope quietly, one small job at a time, is how you lose a third of your profit without anyone noticing. Mike Reardon of bEffective breaks down the math that most contractors never run, and why 2% of contract value looks harmless against revenue but devastating against margin. "Politeness is not the problem. But free politeness is." Worth a read before your next job closes. 💡 Full story 👉 https://lnkd.in/g9das_y7
Mike Reardon commented on a post
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Does Danielle Smith not realize that her message to the US administration will fall on deaf ears? Of course, it is an amazingly beneficial trading relationship; they don't care. Their leader is a bully. He will see her actions as a weakness and take advantage of it. How naive can you be.
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