Client Profile

Erickson Construction Company: “On-Track is a key player in our business growth”.

According to BizMiner, there is a 20% failure rate among contractors. From 2006 to 2008 nearly 200,000 contractors went out of business. That rate will likely be higher at the end of 2009.

Why is the failure rate so high in this important industry? According to the Surety & Fidelity Association, there are five top reasons why contractors don’t make it. Three of these reasons are financial: unrealistic growth, accounting problems and management issues. The other two reasons, performance and character issues, are indirectly influenced by financial issues.

Erickson Construction in Grass Valley, CA, has avoided these pitfalls. Following is a profile of how they implemented a rational business management system by developing a relationship with On-Track Business Management.

Mastery of the details is a shared value
For 19 years Erickson Construction Company (ECC) has been known for its meticulous attention to detail. The Grass Valley, CA firm undertakes residential and commercial construction projects, with an emphasis on building higher-end custom homes. To save
clients time and money, and to maintain absolute quality control over their projects, ECC also has an in-house cabinetry and millworking facility, and a comprehensive electrical/solar installation division.

The owner, Mark Erickson, began his apprenticeship while living in Humboldt County, CA. He credits his work ethic to his mentor, John Nelson. “John handed me a set of plans for a large Victorian residence and said ‘get to it’. Armed with my can-do spirit…I went to work. My love for building was nurtured in those early years.”

Mark and his family moved to Grass Valley in 1990. After working a short time for a local contractor building modest homes, he decided it was time to venture out on his own.

Over the years his commitment to the mastery of his trade has attracted like-minded individuals to his firm. Many of his 30 employees have been with the company for over 15 years (nearly as long as the company has existed). He attributes this loyalty to a shared set of values. At the top of this list of values is a simple commitment to doing the very best work possible on every detail of a project. This may sound like a cliché, but in the world of ECC, mastery is everything. And the track record the company has established has under-scored the importance of this commitment.

This mastery approach has also extended into the day-to-day business practices the company also adheres to. From Mark’s perspective, the attention to the financial details of the business is equal to his construction practices. A stickler for “knowing his numbers” inside-out on a daily basis, Mark places a high priority on knowing how every penny of a job is earned and spent. He credits this ethic to his second mentor, Donna Caswell, of On-Track Business Management.

“She understands the nuances and details of my business.”
“I met Donna Caswell in 1990, my first year in business. I attended one of her classes on the Basics of Construction Accounting. Donna stressed that the owner of a construction company needed to understand the finances of business every bit as much as the hammer and nails. That was the best advice I could ever have had at that time.”

Mark initially hired Donna to provide him with the basic set-up for construction accounting and utilized Donna as his consultant. As his company expanded, he realized the shortcomings of the accounting software his company was using and in 1998 he purchased the Master Builder software system which Donna was representing.

“From the beginning Donna and I clicked. She’s cheerful, positive, honest and a joy to work with. Frankly, not only is she enthusiastic, but I think she’s brilliant. In fact, she even gets giddy with excitement when we discuss really challenging questions. There’s never been a time when she said ‘I don’t know’. She understands the construction business thoroughly.”

“And all her employees share her attitude. Donna hand-picks them. Everyone is top-notch. My confidence with any one of them is as high as it is with Donna. I trust them. They understand the nuances and details of my business.”

Mark says that Donna’s process is impeccable. “Our bookkeeping, filing structure and office organization is incredibly detailed. I can go back to any job we’ve completed and find what I need within a few minutes.”

Mark credits this level of organization as a significant contributor to the company’s profitability even during this economic downturn. “Donna has been incredibly flexible. From a financial perspective, Donna has been the backbone of my business as it has evolved over the years. If it weren’t for Donna’s expertise, I’m sure we would have had a more difficult time during this slow economy. But, through her leadership, we were prepared.”

Having the right people—and tools—accomplishes many objectives.
“It just makes sense to outsource this entire function to OnTrack because I know it will always be impeccable.” Mark said when asked if he ever considered bringing his bookkeeping and accounting functions inhouse. “I’m certain I won’t find the same level of expertise and understanding that Donna and her staff bring. So, I actually think it’s financially prudent to continue to outsource.”

In recent years Mark has taken on a number of out-of-state projects that pulled his attention away from the day-to-day management details. But, Donna had a solution at the ready.

To facilitate this business need for ECC, On-Track set up the company’s accounting with a Citrix webbased interface that allows Donna or any of her staff to manage ECC’s bookkeeping and accounting remotely. This solution has provided the company with ongoing daily bookkeeping, precise record keeping, and a management system that Mark has been able to count on, no matter where he needs to be to supervise a project.

“Not only do Donna and her staff have access to my books from remote locations, I do, too. So, even if I’m working a project a thousand
miles away, I can stay on top of every detail of the business whenever I want.

“Besides simply providing us with her impeccable attention to detail, this service has been a great benefit to my ability to manage my company.”

Donna and On-Track have made growth possible.
“My commitment is to bring my clients the very best result possible. When they see their finished home – or, when a commercial job is completed – I want the client to feel like they received more than what they imagined.

“This expected result includes how I manage the job for them financially. Our internal systems are a reflection of our company as whole. So, just like my company has master craftsmen building a home, making custom cabinets or installing a solar system, with Donna and her staff I know this commitment to mastery is integrated into my operating systems as well. Our clients have faith in us because they understand that our entire company is committed to this level of excellence.

“Frankly, our people understand how valuable On-Track has been to the growth of our business. Having Donna on-board gives them confidence that we’re doing things the right way. I’ve always seen this loyalty as a two-way street. Because my people have been with me for so long, and have helped build this company’s reputation, I owe it to them to make sure we have the very best employees and subcontractors onboard.

“Donna is irreplaceable for that reason alone. In my company there is number of key players central to our success. Donna is one of those people.

“Put it like this – I actually look forward to paying the On-Track bill every month. I can’t imagine my business without her and her staff. She’s made our growth possible.”