Michael Gerber in his book The E-Mythtalks about how most roofing companies fail because they are started by excellent roofers with little business knowledge. Shortly into owning their own company they realize running a roofing business takes more than just being a great roofer. The business side of a roofing company tends to bring the most headaches, causes profit loss and prevents entrepreneurs from realizing their dreams.
This series of articles is designed to take a business owner from Zero to Hero in one year. Each article will focus on a critical part your business. Confucius said, “A smart person learns from his mistakes; a wise person learns from the mistakes of others.” I hope this insight will help you avoid mistakes and continue your success.
Growing a Successful Company
Small roofing companies tend to be more successful than larger ones. They typically have a higher profit margin, less debt and greater customer loyalty. The reasons are simple. Small business owners are directly involved in every aspect of the business process. Think of the owner as a hub in a wheel. Each of the different business divisions are spokes in that wheel. The four big spokes are marketing, sales, operations and administration. Every decision made in the business goes through the owner, and the owner has complete control over the entire operation. Promises made at the initial sales estimate are delivered through completion. Eventually word gets out and referrals bring in a steady stream of work.
But what happens when the business starts to grow? It’s not humanly possible for one person to run everything, not even with today’s technology. Things typically get out of balance when the owner has to rely on others. The only way to ensure continued success is to empower employees. Follow these guidelines:
- Hire slow and fire fast. Look for talent and ability, not skill.
- Teach your employees how to do the job better than you can.
- Give them the authority to make tough decisions.
- And the responsibility to make good ones.
- Measure duties and manage results.
Always remember, as the saying goes, “You cannot manage what you cannot measure.”
Planning for Expansion
The next step is to remove yourself from the center of the business. This is the hard part for most owners. Spend 60 percent of your time working on the business, not in the business. More than half your time should be spent working with employees, developing future process and managing business operations, rather than talking to customers, dealing with suppliers or doing other daily tasks employees can do. Jim Collins in the book Good to Great says, “You get the right people on the bus, the wrong people off the bus and the right people in the right seats. When you do the bus drives itself.”
Planning for growth is critical. The common way to grow a company is by increasing marketing — the thought being if marketing increases, leads increase, sales increase, work increases and more money is made. I wish it were that easy, but it’s not, as you may have learned. As shown in the image in Figure 1, increasing marketing alone only causes the business to run lopsided — it’s like increasing the length of just one of the spokes in the wheel. Without additional salespeople, leads are burned and potential customers become upset. Without trained crews, work isn’t completed correctly, causing callbacks. Without enough capital to finance increased payroll, the company can ruin account status and cause dissent.
The way to successfully grow a roofing company is to increase the length of each spoke in the business wheel slightly — all at the same time. Here are the seven steps:
1. Identify one improvement in each of the four key business areas: Marketing, Sales, Operations and Administration. (“If it ain’t broke, break it!” — Sam Walton.)
2. Set a timeline for implementation.
3. Quietly work on each division behind the scenes.
4. Test each improvement prior to launch.
5. Launch the new improvements close to each other.
6. Usher in the change personally to verify adoption and ensure success.
7. Repeat and grow the wheel even bigger.
This month’s homework is to empower one employee, grow your business wheel by one level and read Good to Greator E-Myth.
Download the PDF of helpful tools including a job description form used to manage employees. Next month’s article will focus on marketing.
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