A Taste of the Good Life or a Little Bit of Hell
Which of these scenarios sounds most like you? It is Friday afternoon and you are on the way home, two hours late. The kids are ready for bed and the little ones might already be asleep. Dinner is cold and you are bone tired. You dread the heated words you know you’re going to hear from your spouse. You promised to be home early. There is no money in the checkbook but you have plenty of work. You keep telling yourself next week is going to be better but you wonder how.
Or how does this sound? You are driving home on Friday after getting the crews started for the day and you and the family are taking a long weekend at the beach. You put in 35 to 50 hours a week and are making a nice six-figure income. You have cash in the bank and much of your work is by referral. Rarely do you work on weekends and your business and personal life are good. Owning your own contracting business is very much the dream you thought it would be.
Fairy tale? Not really. Owning a business is never easy. You don’t punch a clock, you don’t work a shift, and you don’t have the luxury of passing the buck to someone else. You do, however, call the shots. You also drive the strategic direction of your company. If things are messed up, you got them that way.
So where do we go from here? Well let’s start with some focusing and self-evaluation.
Your time is all you really own and control. Understand how you spend it.Start by keeping a time card on yourself. Monitor all your waking hours for one week and then analyze how you spent your time. Assign a dollar value to what you did. Look for areas that are stealing your profits and eating into your personal time. Here are some culprits to look for:
- Too many trips to the supply house
- Babysitting workers on the job
- Returning phone calls
- Excess driving
Make a budget, monitor job costs and know what you need to make on jobs to reach your goal.If you do not have a budget and do job costing, you should not be a contractor. When contractors are on the job, they can watch what is going on. They also work very hard with their hands and in reality are earning wages. As the business grows and the contractor no longer works with his hands, working hard and hoping for the best just won’t cut it. In fact, the harder the contractor works, the bigger the hole becomes. Only by knowing your numbers and watching them on a job-by-job basis can you win.
Practice what brought you to the party.If you own a larger company built on your own talents and success, maybe you have delegated away your strengths. I know lots of contractors who were very successful because they were great craftsmen, salesmen, repairmen or whatever. Suddenly they find themselves pushing paper and managing sales people and crews. This can be a little like taking a star quarterback, making him tackle and wondering why the team is 0 and 10.
One area where this is particularly true is in sales. The 90s were an era where sales and times where good. Many contractors hired other sales people who did OK because the market was so hot. Now with a slower market and less leads, many of these order takers are struggling. If you are what drove the sales, maybe now is the time to turn the dogs loose and get back in the hunt yourself.
Let me make it clear: I fully understand that you may not want to spend your whole life selling or managing jobs. Having the right to graduate to a bigger and better role is not a bad thing, but you have to accept two new responsibilities with this role. One is that you need to hire people who are as good as you; and the other is that you must learn the basic skills required to manage managers. Putting someone else in your place and assuming he will be as good as you won’t cut it. But if times are tough, you need to spend your time being productive and not baby-sitting or shuffling paper.
Get someone on your side.It is lonely being a contractor and if you are not making money, it can be hard to find someone to help you. You will not succeed if you hire rejects. Look at all your employees and see who is going to be with you for the long haul. Don’t get me wrong, there is no magic employee who will stay forever. But if you have been struggling with a poor office manager or bookkeeper, workers with substance-abuse problems, absentees and slackers, well there just is no future.
Start with an office manager who is tiptop and does a great job. Pay well. A good rule of thumb is that a good office person will make the same as a lead foreman or worker. If you cannot afford a full-time person, hire someone part time.
Next, find a good foreman. If you cannot find one, make one. There is no future unless you have someone who can make decisions on the job and take your place. In the beginning you may have to work a half a day on the job to help that person make the right kind of decisions. Don’t think of them as workers but rather working foremen and lead people. Build the organization with company field leaders and hold them accountable.