To Grow Or Not To Grow
I received a couple of e-mails from contractors who were struggling with whether to grow or not to grow. Some had grown their companies only to have it shrink again. Sometimes it was their choice and sometimes they had no choice.
That got me remembering the rough start we had once we decided to add plumbing and air conditioning to our successful heating business. I knew that to grow we needed to offer these services for our customers not only as an avenue of growth, but we risked losing them to our competitors who offered plumbing, air conditioning and heating services.
I contacted several of our friends in the plumbing and air conditioning business because we didn’t want to be in competition with them. We wanted to join forces and grow together. Our desire was simply to work with people that shared our approach to business and whose business ethics were going to be similar.
Our goal was to merge that company with ours to reduce overhead expenses and cross-market to one another’s customers. Having a nucleus of customers, the expertise of an owner and his staff would help us grow quickly. I thought I had found a company that would be a perfect fit.
Unfortunately, its employees had been developed under a very different culture than ours. Basically, our company was disciplined and the other company was not. Our people knew what was expected of them and what they could expect of us. But, the other company tolerated lateness, absenteeism and shoddy work.
The majority of our techs had started as apprentices and had learned our company culture, which is based on reliably providing quality service. That starts with being neatly dressed, clean, on time and trained to do the best work. This was nonnegotiable. Our guys were anxious to help us grow. The employees we inherited were not.
Over a period of a year, all five of the other company’s techs left. One by one they either quit or they were fired. The only staff left to do the work from the other company was the owner and the new service manager we had recently hired together.
Fortunately, my guys were willing to learn the new skills of plumbing and air conditioning. They worked closely under the supervision of the owner and service manager, who were both licensed and insured to oversee their work. We did a few less calls at first, but we did all of them better. Because we were working the right way, we had less repeat calls with fewer complaints. In a very short time, we were doing more profitable work with less people and having fewer headaches.
Growing The Right WayTo get the company growing the right way this time, we hired people who demonstrated a willing attitude. Then we provided them with on-going training to build their sales and technical skills. The flat rate manual for plumbing and air conditioning tasks was the basis for creating tasks in the plumbing and air conditioning modules of the operations manual we created. This explained what we did and how we did it.
It detailed all our policies and procedures so when the techs were out there they knew what to do and what was expected of them. Following our outline took them off the hook. We had been making their day miserable by being so arbitrary in what we asked them to do. Before, no one knew when a task was done correctly or even complete. Once we defined things, it got a whole lot easier to be a manager.
The training programs and training center were built around the technical and sales training we needed to teach and practice. The techs learned by making their mistakes in our place before they ever set foot in our customers’ homes. The owner and manager quickly returned to coaching rather than having to help do the actual work. And this time, everything worked better because we had to go back and grow the company based on repeatable systems.
“To grow or not to grow” is the question that every owner and manager of any size company should continually ask themselves.
But the other question they need to ask is, “How do I grow the right way?”
I have come to learn that most people don’t wake up thinking about how they can make your day miserable; they just want to make things better for themselves. And that’s human nature. If you decide to grow for the first time or once again, focus on the systems and the people will perform better and be happier.
By the way, don’t get the idea you can hire clones of yourself. There are none. And even if you could find a clone to do everything as well as you, why would they be working for you? Wouldn’t they have their own business?
Acceptance is a big part of managing. When I say acceptance I don’t mean lowering your standards. I mean focusing on the big picture and coaching rather than on the stuff that doesn’t mean all that much.
Once you understand your overhead costs, you can see that they don’t change that much whether you’re a solo shop or a little larger. What does change is you have more people available to provide more sold hours that generate more income to cover those expenses. An employee should be earning the company money, not costing the company money. He needs to pay for himself. This is much easier to do in a commission-based company.
If you like to teach and train, you have the chance to grow your company the right way. Make sure to balance technical training with sales training, and practice sales and technical skills together in all your role-plays and teaching. It all starts with how your techs approach the customer’s front door and what they do and say there.
I suggest you begin your decision about how to grow by doing a bunch of “what if” financial plans that vary with how many techs you add. This financial exercise is critical since making money is the goal.
If you still decide you want to grow, begin to think about how you’re going to define what you do and how you do it so your future employees know. My “Operating Power!” manual was designed to be a reference tool for you in this process.
Your training center can start out simply as the heating, air conditioning and plumbing systems of your own shop or home. Remember, you need to provide both sales and technical training. It’s not one or the other.
Keep your own skills sharp by attending on-going seminars dealing with selling, coaching and training skills.
A fresh pair of eyes can help you with a “needs assessment” visit to set up an action plan.