PRO-Tip: The 1% Mindset on Risk

Risk is an interwoven theme in my carefully crafted classes at All For Contractors. Legal issues stem from an unhealthy amount of risk, so as a construction attorney and Managing Partner of Shields Construction Law, PLLC, I am in a constant state of risk assessment for my clients’ businesses. While the firm cleans up issues that have already happened, we love to get ahead of things and make proactive recommendations. ?

Which do you prefer? Chugging Emergen-C after you’ve woken up sick and feel like death walking, or taking a multi-vitamin each day and drinking plenty of water? There is a tangible difference between crisis and prevention mode, and we prefer you be in the latter.

Sometimes, you have to do both, but most of the time, you can be in cruise mode (and sleep better) because you are assessing risk and actively de-risking every…single…day.

The top 1% of contractors are aware of risk all the time. This assessment is of subcontractors, team members, potential hazards on work sites, and more. The 1%’ers continuously assess known risks and evaluate new possibilities. Circumstances can change in an instant on a work site, and that can reveal new risks or dangers rather quickly. To try to keep a pulse on risk mitigation, some owners opt to hire a safety manager or alternatively, include heavy safety responsibilities and oversight in a person’s job description on top of the other things they do on the daily. Without question, the 1% maintain a proactive mindset to de-risk wherever they can. Just as ingrained as making a cup of coffee each morning or brushing your teeth before bed, the top contractors who have longevity in the business have a mitigation mindset that parallels one of growth.

An aggressive growth plan without a risk mitigation plan is utterly dangerous. I see companies soar and crumble quickly because the focus is on world domination without measures in place to avoid financial loss or issues, 99% of which are preventable.

I’m a human janitor in a non-Lysol sense, cleaning up situations that have gone awry. From disputes – namely litigation and OSHA defense - I draw from real situations to try to inform the public because if it can happen to one person, it can to you as well. If you’ve ever heard the saying, “You don’t know what you don’t know” (If you’ve taken a class on www.AllForContractors.com, you’ve definitely heard me say it), it’s 100% true and why we aim to be a central source of proactive information.? You can benefit from others’ past mistakes. Hence, how All For Contractors was born nearly 5 years ago. One way to de-risk is to remove the “not knowing” aspect as much as possible. Education is powerful and the key avenue to knowing. Know everything! See everything! De-risk everywhere!

I frequently comment that I’m the anti-lawyer lawyer in that I try to help people avoid needing my law firm. Based upon the amazing feedback from the 1,800+ enrollments with All For Contractors this year, the construction law-fueled education we deliver at All For Contractors is unprecedented! By reading this article, you’ve taken a step towards de-risking. Kudos! Now, let’s take it one step further.

2 easy and inexpensive ways to de-risk right away:

1.???? Education is everything!

a.???? Train your team on risk. Lead them on protocol, and through education, train your team to adopt a de-risking mindset. Expensive legal issues can often be prevented by the boots on the ground team where issues can first be spotted. It is a huge misstep to not train your team with what you know. Often, owners, operators, or even upper management inadvertently keep the areas of risk close to the chest to avoid any appearance of weakness or vulnerability. In fact, it’s best to do the opposite; talk openly about risk, invite new perspectives and suggestions from your team on how to avoid issues, and have risk mitigation be a team effort. We win or lose as a team – let’s do the former. (Stay tuned for a HUGE announcement coming soon on this point!)

?

2.???? Don’t skimp on your advisors!

a.???? Surround yourself with a team of advisors of different backgrounds and knowledge bases to be your eyes and ears. Just as with your expertise, you’re not just paying for their time in any given moment, but rather tapping into years of valuable experience that you don’t have but need to lean into. They can see what you do not see. Good service can be expensive, but bad service can cost a fortune. Often, the great guys cost no more than the fumbling, so choose wisely based on credentials and real world experience in the construction industry. Those key advisors include:

i.???? Construction Attorney

ii.???? Insurance Agent ?

iii.???? Financial Advisor

iv.???? Certified Public Accountant

One brief comment regarding your attorney selection:? Please do not rely on your second cousin who practices divorce law in another state to help you with a work site injury. Historically, it doesn’t go well, and then folks reach out to me to try to clean it up in the bottom of the nineth. We should all stay in our own lane. Construction Law is its own niche just like Family Law or Bankruptcy Law. You typically don’t see cross over in these realms for a reason. Building a home is very different than commercial work at the airport. Working as a plumber doesn’t mean you’re automatically equipped to start bidding electrical jobs.

This rings true for advisors of other kinds as well. There are people who work with a ton of contractors and are simply more abreast of the issues you face and your internal operations. It means they understand your business better and can more proactively help you de-risk.

If you either don’t have the above roles filled or they are not communicating with each other and working in tandem to ensure you’re protected (i.e. actively helping you avoid issues), that is a missed opportunity. The 1%’ers do not blink at consulting their advisors. Doing so is usually cheaper and faster than cleaning up a situation on the back end.

Even I have my own team of advisors, and I have learned over the years to delegate what I don’t know or that which I’m not good at quickly. Daymond John, renowned founder of FUBU and staple on the hit TV show Shark Tank, posted a video years ago on LinkedIn conveying this very advice about delegation that I pass along to you. (I saved that video and will share hereafter). Becoming a master delegator takes time, but if if I hear the word “tax,” I’m looping in my CPA. If there is an insurance question, I ping my agent. (Jonathan Peters – you’re the man and an incredible guest instructor to AFC!) I’m happy to open my Roladex to anyone if it can help. Email [email protected] if you’d like any contacts.

Daymond is in the top 1% of the 1%, and learning from others is vital to success. Through our classes at All For Contractors, we aim to help the current 1% maintain their stature and elevate others into that position. Learn from us, hear of others’ mistakes, and propel into the new year with the 1% mindset on risk.

?