Page 7 of 7 FirstFirst ... 567
Results 61 to 70 of 70

Thread: Increase your business

  1. #61
    Make Money First, then Grow the Business
    By Monroe Porter



    It was suggested that I provide some insight on how to overcome obstacles that contractors often face when growing their businesses. Before I begin, I want to go on record as saying that growth is not your friend. Whatever tasks you do poorly now will only get worse as your business grows. If you do not manage people well, increasing the size of your staff certainly will not help you overcome this issue. If you do not like paperwork, accounting and the numbers, how is growth going to reduce these issues? I cannot name one shortcoming that you might have as a businessperson that growth would help you overcome. While growth is the main goal of most entrepreneurs, it is also the single greatest danger to their businesses.

    If you are not realizing a $100,000 a year owner’s salary and company profit in your contracting business, your first goal should be to reach that six-figure income. Most of the people in my networking groups make such an income. In fact, if you were not nearing that figure, I would probably ask you to leave the group because I would not want to charge you for something you can’t afford.

    It is pretty easy to earn this kind of money if you get the basics right. If you can’t do the basics, you do not need to grow. Your goal must be examined before attempting to get bigger just for the sake of growth. My 27 years of experience as a management consultant has shown me that rarely does someone become more profitable by growing. Instead, businesses are structured at different levels and stages, each of which can be profitable.
    Growth requires more people, more cash, better systems, more equipment  and the list goes on. Do you know a contractor who went broke? I bet that person had a lot of work. So, how come he or she went broke?

    Wonder, Blunder and Now What?
    Let’s start by reviewing the history and stages of contracting. Stage 1, we will refer to as wonder. Most contractors start in business and wonder what they are doing  a truck, some tools and off they go. Most new contractors start by moonlighting. On their regular job, they get paid $15 an hour; the boss makes money and charges more. Going into business full time seems logical. In the beginning, new contractors do not have a lot of overhead. They work out of the home, they use the same truck they drive back and forth to work, and they have no marketing expense because they appropriate most of their customers from their old company.

    When the owner is on the job every day, it is a sure thing that the company provides excellent workmanship. When you perform good work at low prices, you grow. As you grow, the business begins to change but prices and systems stay the same. Soon you have to hire other people to help you. Once there are more employees, you spend more time dealing with material, giving estimates, and so on. Suddenly, there is a lot of work but no money.
    Now you have officially entered the next stage of business: blunder. You have a lot of work but even more stress. The harder you work the worse the stress gets. The chaos grows, and suddenly you find yourself spending a good deal of your time babysitting employees and acting as an overpaid delivery boy. You may even hire supervisors and others to help you. But, instead of getting better, the whole mess just gets bigger.

    As the owner puts down the tools, several things happen. First of all, you are not on every job, so details begin to slip. The workers don’t seem to get things done as fast as you do. Before, you were just earning wages. But now you are thrust into the role of manager. So what do you do to get out of this mess?

    1. Increase your prices. You must build a non-working owner’s salary into your prices. If you have five employees and each works 2,000 hours a year, this equates to 10,000 hours of production. If you want to make $50,000, it takes $5 an hour to pay your salary. If you do not build this into your price, it will not be there to take home. Raising prices and slowing growth will allow cash flow and systems to catch up.

    2. Increase the time allotted in estimates. Understand that your crew is probably not going to get quite as much done as quickly as you did. Not only because they will not work as hard but also because of planning and communication. In the past, you did both the estimate and the work. Now there is a communication issue. The person doing the work is not the person who quoted the job. Without the owner on site, it can take 10 to 25 percent longer to get the same job done.

    3. Develop supervision. If you are not going to be on the job yourself, you must find a foreman or lead person to run things in your absence. Every job needs leadership. In the beginning, you may have to stay at the site the first half of the day to get things moving and manage the details.

    4. Develop systems. Your employees are not mind readers. You must develop systems to communicate customer expectations, job specifications and job costing. Without simple job costing, you will fail. You must understand where you make and lose money.

    Moving Forward
    What if you have a business that is bringing in $1 million or more per year, you understand the numbers and want to move to the next level? Basically, what you want is a less owner-driven business. This brings on another whole new set of challenges. My experience has been that most contractors are much better at managing jobs than they are at managing middle managers. Thinking outside of this job box can be quite challenging. Also, owners often mistakenly think management needs little or no supervision. Before going down this road, you must ask yourself what you like and dislike about your business. If you enjoy selling and being in production, you may not like your new role as coach, advisor and scorekeeper.

    There are two distinct paths to take when growing the business for the purpose of making the business less owner-driven. One approach is to replace the owner’s role with middle management, making the owner the overseer of managers. The second approach is to develop a manager/salesperson that does some of the same tasks the owner performs and helps to run the business in the owner’s absence. Understanding your personality will help you decide which approach is best for your company.

    I am making the assumption that the purpose of your growth is to create an enjoyable business, not just to make more money. If the business is unprofitable, hiring more sales people and managers will probably not increase profits until you fix what is wrong. If your owner’s salary and profit is not at least $100,000 a year, you should not hire a manager or salesperson. You can easily make $100,000 a year by yourself. If you don’t, you need to fix that first. Your goal should never be to grow so that you can make more money. The goal is always to make money to grow.

    -----------------

    Monroe Porter is president and owner of PROOF Management Consultants, a company specializing in business consulting for contractors. Monroe is also founder of PROSULT Networking Groups, a PROOF concept developed to help non-competing painting contractors. For details on PROOF’s cassette programs or networking groups, visit its Web site at proofman.com or call (800) 864-0284.

  2. #62
    Prestige Member
    Join Date
    May 2009
    Location
    Asheboro NC
    Posts
    1,577
    Grandpaw has a net worth of over 1 million an he has been washing for over 20 years an seldom ever makes over 65k a year.Not my real grandpaw but just the guy that help me get started.Works everyday an saves money an invests very smart.Great points made on this post.
    Hal Brown
    Sophia Nc 27350
    www.AbvPressureWashing.com

  3. #63
    Prestige Member
    Join Date
    Jul 2007
    Location
    Lenoir City, Tn.
    Posts
    2,697
    I'm with Guy. If you own a business then you're a business owner no matter what you're doing or how many people work for you. Or whether you're hands on part time, full time or never.
    "Owning a job" is just a term for a solo operator or someone stuck in the field I guess. Shouldn't make any difference. Most power washing business owners play a huge role in daily operations anyway.
    Chad Johnson
    East Tennessee Power Washing
    Knoxville, Tn.
    865-368-0847
    www.easttnpowerwashing.com

  4. #64
    Prestige Member Guy B's Avatar
    Join Date
    Oct 2007
    Location
    North CAROLINA
    Posts
    3,998
    Don't get me wrong....if anyone wants to build a business to be hands off.....have at it.......as for me, I'm a junkie and my business is my fix, it's who I am (right now). Now that may sound weird to some but I enjoy getting out in it. I've never really "worked" at anything in my life until we started this business, and never worked harder, nor profited more......if you put 110% into it.....you'll get 110% out of it.

    I have no desire to be a gazillionaire or the Wash King of my area.....I'm a simple Man with simple wants & needs......I Am A Small Business "Owner".


    Just Saying.....
    Pressure Kleen L.L.C.
    Power Washing Service
    Tar-Heel N.C. 28392
    Guy Blackmon 910-876-1594

    House Washing Fayetteville N.C.
    Pressure Washing Fayetteville N.C.
    Power Washing Fayetteville N.C.

  5. #65
    ^^^^^

    Ditto. I'm on the same page as Guy, but did work hard in 3 decades in 3 other businesses, two owned. The last two being software development. Exterior wood restoration is a breeze compared to that rat race.
    - Rick Petry
    Windsor WoodCare
    Ringoes, NJ
    (609) 468-7965 cell
    www.windsorwoodcare.com
    rick@windsorwoodcare.com

  6. #66
    This is a outstanding thread!
    Wade Strait
    Strait Shot Exterior
    309-230-4916
    http://www.straitshotexterior.com/

  7. #67
    I would be interested in reading it also if you still have it.

  8. #68
    Hero Member
    Join Date
    Apr 2011
    Location
    WARRINGTON PA
    Posts
    562
    Great thread just read through it all. Wow after 26 years and going through almost losing everything to making a lot to almost losing everything and learning how to run a business to make money. Wow so much
    Rolling Suds Inc.
    Brian Wendling
    Power washing in Pa.
    Roof Cleaning in Pa.
    http://Rollingsudsinc.com

  9. #69
    Jr. Member ambtink's Avatar
    Join Date
    Apr 2009
    Location
    West Deptford, NJ
    Posts
    35
    Wow great article, I can't believe I have never seen this article. great information and makes you think about your own business.
    Tom
    Water Boy Pressure Washing
    West Deptford, NJ
    609-932-0595
    www.waterboypressurewashing.com

  10. #70
    Hero Member
    Join Date
    Apr 2011
    Location
    WARRINGTON PA
    Posts
    562
    Was down the shore 2 weeks ago and tore my knee apart. Went to play basketball with my 21 year old son, we played against other kids and I went to make a cut and went down. Ended up with tearing apart my ACL my medial meniscus and my outer MCL. So now I need surgery and 6 months at least of PT. First I have to let swelling go down and more flexibility before surgery. Then last week I had bad back spasms and could not breathe, ended up in hospital and have pneumonia. Last 2 weeks have been tough and worst thing is I can not golf till next year. Also have to cancel 25th anniversary 2 week trip to Italy. But I will be fine and my life is good. I do feel bad for the wife, she will have to do everything.

    The real story is that we have all systems in place that we have not lost any money and we will still keep growing the business. I will have a tuff time not being able to drive for awhile but I will still go in office and be able to also look at schedule and talk to sales guys and operation guys about everything going on from house or beach. Actually when I was out for most of the year in 2013 with multiple foot surgeries I could not golf or screw off much so it helped me look at everything closer. So if this happened to you?
    Rolling Suds Inc.
    Brian Wendling
    Power washing in Pa.
    Roof Cleaning in Pa.
    http://Rollingsudsinc.com

Page 7 of 7 FirstFirst ... 567

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •