To Grow Or Not To GrowDear Al,
My husband and I started a plumbing company two years ago. It is just the two of us - me in the home office and my husband doing calls. The dilemma we face is whether to grow or not to grow.
Home and Away
Dear Home and Away,
I understand the dilemma you're facing. It is one of the toughest decisions you, as an owner, have to make. Do I choose to grow or not to grow? And, whom do I listen to?
There are successful two-person companies out there, but they have to work very hard to make it all work. They typically made tough choices at the beginning about what they wanted from their business and what they were willing to give up to stay small.
I've counseled people in the same situation as you, and I told them to first write out their personal goals and then their business goals. Take a look at the business today and envision the company as you'd like it to be five years from now. Will you reach those goals by choosing not to grow? The most frequent answer is no. That's why most people who do this exercise choose to grow.
Here are just some of the other reasons they decided to grow:
1. They wanted to take vacations.
2. They wanted time off to be with their family.
3. They wanted to retire some day.
4. They checked their numbers and found that their critical overhead costs are relatively similar to what they'd be if they added some more productive help to cover those costs. Note: Remember, right now, only your husband can generate sales and do the work that covers those costs.
5. They understood that, should something happen to either of them, the business would be under great pressure to survive.
6. They felt they had to wear all the hats. That gets harder to do as time passes and things get more complicated.
7. They realized their business demands a 24/7/365 response and having others to share the burden was not a luxury but a necessity.
8. All the administrative and compliance issues to be in business were enormous. They remain pretty much the same whether the company is big or small.
As to whom to listen to, I recommend you read their work over a period of time and see if you agree with the body of what they're saying. A recommendation is always helpful. Just be aware of the danger of listening to too many people because you'll waste a lot of time, energy and money trying to make all the pieces work together.
Any trade group or association can also be helpful in the growing process. I recommend choosing a national organization because you'll want to be free to share information with people who are not your competitors. Like most things, you'll get out of it what you put into it.
First StepsDear Al,
The reason I'm writing is that I have finally gone out on my own. While I was a good technician, I have quickly learned it takes much more than that to run a successful business. I can't seem to find the help I need as a new business owner. How do I get started and how do I deal with the pitfalls involved?
Most consulting agents require BIG money that the small guy like me doesn't have. So here I sit and the phone is not ringing. Nothing has really prepared me for this. So, what I want to ask Al is, how does the little man even begin?
Where To Begin
Dear Where To Begin,
You're not alone. It's actually very typical for me to talk to and meet really good technicians, just like you, who choose to take the plunge. They find out there is a lot more as an owner that you need to do to be successful. It requires a lot more than their technical skills to do the actual work.
You should feel good that you took the risk to leave the security of a steady paycheck and try to make it on your own. But here's the problem with what you've been doing so far: You haven't begun with the very first thing you need - a business plan. A business plan is like a road map. So, you're directionless. Any road will do if you don't care where you're going.
And yes, individual consultations with business mentors like me are not inexpensive. Like most things in life, we represent a good value. But, there are resources available to you that would be more affordable right now.
You can buy some of the very best advice that we consultants and authors have to offer by purchasing our books, videos and DVDs. You can attend our seminars and workshops and learn a lot. Here's my suggested list for you to begin with:
1. Read Michael E. Gerber's “E-myth Contractor (Why Most Contractors' Businesses Don't Work and What to Do About It).” This is a great book to learn all the plans you'll need to build a successful contracting company.
2. Read Ellen Rohr's “Where Did The Money Go? (Easy Accounting Basics For The Business Owner Who Hates Numbers).” This is a great book to learn what “real world” accounting is all about, and why knowing your breakeven is the first step toward having a profitable business.
3. Read Dan Holohan's “Just Add H2OH! (A Recipe for Hydronic Marketing Success).” This is a great book on how to position your company and reach the market niche you desire. It's not just about how to sell hydronic heating.
4. Read my book “Operating Power! (What To Do And How To Do It In The Plumbing-Heating-Cooling Industry).” This is a great resource for defining all the activities and tasks your contracting business must do. Although you are doing most if not all of those jobs yourself today, it'll give you a way to add staff in the future and train them.
Is Cloning Possible?Dear Al,
Showing up on time is my biggest problem as a one-man shop. There are only so many places I can be at once, yet I don't want to turn away repeat customers. I worry that if I hire employees I won't be able to keep them busy enough to stay profitable. It's kind of like a Catch-22. It's just that this is the same problem I've had for the five years that I have been in business and, unfortunately, if I don't change my ways, I'll be saying the same thing five years from now! Your input is greatly appreciated!
Two Places At The Same Time
Dear Two Places At The Same Time,
The Catch-22 you describe about adding staff is an age-old dilemma that everyone in the industry faces sooner or later. It's the classic “I need to hire a salesman to get more sales, but I can't afford to hire a salesman until I've got more sales.” I think you have to add people in the right way and that comes from getting good at hiring and training people so they pay for themselves and generate money for the company.
The advantage of the one-man shop is the effectiveness of your work. People like you. They really like you! Now what you need to do is train other people to deliver the same high-quality work.
As to not being able to be everywhere and respond to all your customers, people are much more understanding if you communicate with them early on about what you can and can't do. They may not like your answer, but they'll appreciate your honesty rather than a promise you can't deliver.
You may decide you want to take in a partner to help grow the company. There are many options to explore.
No Procedures = Don't KnowDear Al,
I had a new tech show up at our office unannounced this past Saturday to stock his truck. His working hours are supposed to be Monday thru Friday, 12 noon to 8 p.m.! Soon after, I just happened to be at the shop late at night, and I found him stocking his truck again without permission. I asked him why he was here and he said he was low on parts. I asked him who gave him authorization to go to the shop during off hours and he said he didn't know he needed permission. I'm upset he thinks he can come and go as he pleases. What do you think?
Dear Aggravated Owner,
I completely understand your frustration, but does the new tech have something in writing that spells out how to get parts?
If not, it's hard if not downright wrong to discipline someone for something they thought was right and you never told them otherwise. This is the danger of no communication, verbal discussions or memos.
Proper training and putting it all in writing is the only way to hold others accountable. Your employee is feeling frustrated if he honestly came in to the shop on Saturday thinking his restocking was a good thing. Do you think theft was involved? If yes, there are ways to minimize this. For example, limit access to only certain hours and certain people.
We need to give the benefit of the doubt for now. Blowing off steam makes us feel better … for a little while. But, it rarely gets the desired change of behavior we really want.
This incident should redouble your effort to get your procedures and policies out there, reviewed and practiced. A lot less of this behavior should be occurring. And when things like this happen again, and they will, you can pull out the manual and go over what you've agreed to in writing. I suggest you forgive them the first time and tell them you'll put a note in the file in case it comes up again. And if it does, proceed with your next steps of progressive discipline if it reoccurs.
There will be another type of frustration that will occur. It's called fence-testing. That's where they'll find a new place to mess-up. How many different mess-ups are you allowed and in what time period? You need to decide now.
The training and building of our own new techs is critical to being free of this hostage situation. It's your path to freedom. But, it'll take time and energy.
Highs And LowsDear Al,
Business sucks the life out of me sometimes! I am doing much better at meeting with key people and sharing my vision for the company. This pursuit of excellence is a commitment that's as great as marriage and has all the roller coaster highs and lows. It's a lot harder than I thought to track everything and to motivate others to do the same. It's a lonely feeling knowing where we need to go and what we'll look like when we get there. I need to know that you possibly felt the same way as I do and all this effort was worth your while.
Dear Vision Weary,
I felt exactly the same as you did at times. The fact is: vision is both a blessing and a curse. Those of us who have it see so clearly where we are today and where we need to be tomorrow. And we can't wait to get there. The difficulty for us is in trying to understand why others don't see it and buy in.
Here's the bad news. Most people would rather avoid change no matter how great their dissatisfaction. They have a comfort zone and they're not moving out of it willingly. You have to provide some mighty good motivators. And the motivators are found in their “WIIFM,” i.e., “What's in it for me?” That's the only way people get motivated.
How people handle change is best explained in the book “Who Moved My Cheese?” by Spencer Johnson. It makes it clear that people, in general, have a real aversion to change and that you as the change-seeker have to acknowledge this.
And, here's the good news: Once you've provided compelling reasons that address what they want or need, they're much more likely to make your vision a reality. It all begins with your ability to inspire others and a steadfast resolve to implement your plan of action.
All the effort I could muster was needed to make my visions for our company come true. But it didn't happen as fast as I would have liked. It took time and patience. The greatest test was having the patience required to deal with the “resistors” who could drain the life out of me, if I let them. The trick was being able to get them to see the benefit for them to make the company better. When they did, things were handled more automatically and more systematically. Life got less hectic and I wasn't always stuck in the fire-fighting mode. This gave me more time to be with my family. I also felt less stress. It allowed me to focus on more money-making ideas that benefited the company and me.
So yes, the answer is, “It's all worthwhile.”
Down Four QuartsDear Al,
My mechanic discovered one of our trucks was down four quarts of oil! I talked to him about the situation so we could do something to avoid this in the future.
I told him that I want him to check the oil of every truck during our monthly company meeting. Our truck mechanic didn't seem “too thrilled” by my idea. He said he would have found the situation sooner if we had a routine maintenance schedule. While it may be easier to say, “Just make the guys check it,” we might want to consider a procedure to avoid a costly mistake. Do you have any suggestions?
Dear Got Oil?,
Our dispatcher would ask each driver of a company-owned vehicle what their mileage was once a month and enter it in the computer for the fleet manager to follow-up. And, we also had a plan B that used the computer program Outlook. There was an automatic date trigger on a rotational basis for each truck so they received service every three to four months. And, the techs and apprentices had a written procedure to follow, called “The Daily Two-Minute Driver's Checklist,” that appears in my manual.
They all helped. But, ultimately there has to be someone responsible and have the clout of specific disciplinary actions for noncompliance.
Hey, while you're checking things, I recommend you also have the drivers show you where they keep the insurance card and registration. Want to bet on how many have expired or how many can't find the paperwork?
To send Al your own questions, which if selected will run anonymously, send him an e-mail: email@example.com or a fax at 212/202-6275.
This column is meant to be a resource only. Please check with your own trusted business advisers, including your own attorney, to make certain that the advice here complies with all relevant laws, customs and regulations in your area.