Bill Gates is a brilliant computer programmer, but he doesn’t spend any time writing code these days. Don’t ask Ben & Jerry to make you a sundae, or Mrs. Field to bake you some cookies. Thomas Edison died a wealthy man not so much because of his revolutionary inventions, but because in the latter stage of his life he got out of the laboratory and went into the business of marketing his inventions. Giant electric utilities now known as ComEd and Con Ed are among the businesses that arose from original Edison ventures.
The lessons are everywhere you care to look. It takes more than mastery of a craft to run a successful business selling the output of that craft: You need to tend to the business of running a business.
Think of how many roofing contractors you’ve ever seen go out of business. How many of them failed because they didn’t know how to do roofing? I’ve asked the same question of myself, and respond that in my 24 years of association with the construction industry, I have never known a single contractor to go belly up because he didn’t know how to do the work. Conversely, I’ve known plenty who failed even though they were master mechanics or project managers. It always happens because of an inability to make the transition from craft worker to business owner.
Technical know-how is, of course, essential to your business, but you’re in a lot of trouble if you think that’s all it takes to succeed. The vast majority of your competitors have technical knowledge as great as your own or better, or at least enough to get by. If roofing labor is all there is to purchase, the customer might as well choose the contractor who will work for the lowest price.
Alas, that’s exactly what happens in most cases. And that’s one of the big reasons why so many master craftsmen fail when they strike out on their own as independent contractors. Failure to price their services correctly probably ranks as the top reason why contractors go bankrupt. Next come shortcomings in customer service, followed by failure to understand marketing.
Here are some of the defining characteristics of a successful contractor as opposed to a craftsman.
1. A contractor spends as little time as possible working with the tools and supervising jobs. People who strike out on their own as a one-man shop obviously have to do the work. Some are content to remain sole operators, and that is a choice we must respect. However, if you want to make “big” money and/or enjoy free time for recreational pursuits, you need to build an organization that doesn’t depend on you to personally install every roof, or even to directly supervise those who do.
Frank Blau is a friend of mine who runs the largest plumbing and HVAC service company in the Milwaukee area. He started out as a one-man operator more than 40 years ago, and has seen his company grow to upwards of $4 million in annual revenues with dozens of service trucks. I once asked Frank how big a contractor needs to be before he stops working with the tools. His answer surprised me.
As soon as the contractor hires one more employee, he should start phasing himself out of fieldwork, Blau replied. He might still have to pitch in with the tools, but the majority of his time should be spent acquiring work for the other employee to perform. Then, once the contractor acquires a second employee, he should devote 100 percent of his time to the business of contracting. Michael Gerber, author of The E-Myth, one of the best books about small business I’ve ever read, says much the same thing. He calls this working on your business rather than working in your business.
2. A business owner must lavish attention on customers, not just tolerate them. Customers are a pain in the neck to the average roofer. They get in the way. They change their minds. They don’t know squat about your work but think they do. They don’t understand the laws of physics.
The typical roofer may understand that he must endure these quirks, but has trouble doing so with a smile on his face and sincerity in his voice. Yet, that’s what you must do as a business owner. You must resist the natural impulse to turn your back on demanding customers or to tell them off. You must return phone calls promptly to people who make you grate your teeth. You must pretend to like people you’d secretly like to strangle.
As a business owner, you must get in the habit of catering to customer wants and needs. This means as much as possible scheduling and performing work at the customer’s convenience rather than your own. It means early morning or evening meetings. It requires a steady diet of 12-hour workdays, or even more when snafus arise. If you’re not prepared to handle this, you don’t belong in business for yourself.
3. A contractor must enjoy selling and marketing. The typical craftsman believes that if you do good work at a reasonable price the world will beat a path to your door. “Word of mouth is the best form of advertising,” goes the old saying.
Sorry, but it doesn’t work so smoothly. Success in business requires constant selling and marketing, even when you have more work than you can handle. Here’s why:
A. If you have more work than you can handle, you want to focus on the most profitable work. Part of sales and marketing is getting more business out of your best customers while winnowing out those who don’t want to pay enough or give you trouble.
B. Relying on unsolicited referrals is putting your fate in the hands of other people. This is out of sync with the entrepreneurial spirit.
C. Eventually work will slow down. When it does, you’ll be desperate to start marketing, but it will take months for any efforts to kick in. The best time to prepare for a slowdown is in advance of it occurring.
None of this is to denigrate the roofer’s work. The roofer is indispensable to your business. Just remember that once you go into business for yourself, you’re no longer a roofer. You’re a contractor. Roofers work for you.