Is Your Company Stuck In The Muck?
*An article based on George Hedley’s book
“Get Your Construction Business To Grow & Profit!”
Is your business growing and giving you the results you wanted when you first started your entrepreneurial journey? Or are you stuck in the muck and can’t seem to get moving? As small companies begin to grow, they get bogged down, hit challenges, and find roadblocks that hold them back. These include lack of time, energy, money, people, and customers. Many business owners stay paralyzed forever and can’t let go or grow. They feel they have to make every decision and hold tight to the controls. In order to get your construction business to grow and profit, most companies follow this step by step transition to become a ‘Best In Class Business!’
BIZ-BUILDER GROWTH CHART
Step 1 - EMPLOYEE
Trade Worker, Superintendent, Foreman, Project Manager, Estimator
Step 2 - Self Employed BIZ Owner
Supervisor, Worker, Boss, Do Most All Work Yourself
Step 3 - Stuck Small BIZ-Owner
Several Projects & Crews, Hands-On Supervisor Manager, Controller, Micro-Manager, Unorganized, No Systems
Step 4 - BIZ-BUILDER
Implementing BIZ-Builder Blueprint, Growing, Profitable, Installing Systems, Structure & Scorecards, Building A Management Team
Step 5 - Best In Class Business
High Profit Margins, Steady Growth, BIZ-Systems, Structure, Scorecards, 100% Management Team Run, Marketing & Sales Plan
Step 6 - Your Business Works!
Owner, Stockholder, Investor, Developer, Opportunity Seeker
Step By Step
Step 1. Before small business owners start their companies, they’re usually very competent employees, trade workers, superintendents, foreman, project managers, or estimators doing a great job for their boss. They’re responsible and accountable, competent, work hard, and dream about the day they can start their own business. Then it finally happens. They get bit by the entrepreneurial bug and make a decision to go into business for themselves. They go home one day and announce to their family and friends that they have quit their job and are going to start their own business. This is what I call “E Day.” E is for Entrepreneur, Exciting, Exceptional, Excellent, Erratic, or even Eccentric! After the initial shock, family members ask where the newborn entrepreneur will find the money to get started, attract paying customers, hire trustworthy employees, and—of course—pay the bills. Without fear, the new entrepreneur says: “Don’t worry, I’ll figure it out!”
Entrepreneurs are never content working for others. They want to go out and make things happen and do things their way. They feel boxed in doing what their boss wants and following company rules and rituals. They need to go it alone, escape, and make their own decisions about how they want to do business, who they should hire, how many hours they should work, which customers they should do business with, and how much money they can make. So they eventually start their own company, grow, make a profit, and seek a better way to build a future. But most get stuck along the way.
Step 2. After an entrepreneur gets infected by the E bug, he or she starts his own business and moves to Step 2 as a startup self-employed small business owner. Here he is the supervisor in charge of every decision, contract, customer conversation, price, purchase, delivery, and what work gets done when. He is fully in control of every moving part of the business. He is out on the jobsites almost every day working, and performs a lot of the actual work himself with the help of a few other employees. He is the boss and calls all the shots. He is the business. Without him, there is no business and no company. He is ”Stuck In A Truck Looking For A Buck!”
Some business owners remain sole practitioners forever as a choice, and that’s OK. Others get stuck with two men and one truck, while some grow to one foreman with two or three crews. Eventually they have to make a decision: grow or stay put as a self-employed sole practitioner small business owner. The ones who decide to grow move on to Step 3.
Step 3. As the small business owner gathers a few good customers and begins to do excellent work, he starts getting referrals. Therefore, his company continues to grow. Therefore he decides to rent a small shop or office near his house. He hires a foremen or supervisor and some more field workers. Then he hires a part-time office assistant or bookkeeper to help him with the paperwork and pay the bills. At this point he is still the estimator, salesman, project manager, and general field superintendent with everyone reporting to him. As the hands-on supervisor and manager he makes every decision, signs every check, and still oversees each little item, transaction, customer, contact, purchase, proposal, invoice, subcontractor, and employee.
The work keeps coming. So the business owner next hires an assistant project manager or estimator, and a full time office manager to take more of his workload from him so he can handle additional projects. As a micromanager control freak, he gets frustrated with employees not doing things the way he wants. He starts to get more and more stressed-out having to keep all the balls in the air, manage lots of people, and get all the work done. He feels over-worked and out of control without systems, structure, standards, accountable employees, or a handle on job costs. Cash-flow is tight, he spends lots of time chasing money, and he isn’t getting a very big paycheck for all the effort and time he is working. Work is starting to drag him down and the pressure of owning and running a business is getting to him. He is not achieving his entrepreneurial dream, and doesn’t see how he can get it to work, or get to the next level.
Most small business owners get stuck at Level 3. Some grow to as many as twenty field employees, two superintendents, and a project manager. And others grow even bigger before they reach their limits and get stuck. When the company grows to the level where the business owner can’t control everything himself or make all the important decisions anymore, it gets stuck and stops growing. At this point, the small business owner is unable to manage, supervise, and be involved in everything himself. He or she knows they need to do something different, let go, hire better people, delegate, install systems, find better customers, improve service, get a better handle on costs, or find more hours in the day. He doesn’t know how to get it all done by himself. This is when he calls me and says: “HELP! I can’t get my business to work!”
A business that doesn’t make a profit or grow will never meet the needs, wants, and desires of a driven entrepreneur business owner. When you get stuck at Step 3, you begin to hate going to work because of all the demands, stress, and pressure to get everything done for your customers, employees, bankers, bonding company, subcontractors, and suppliers. So what should a business owner do who is stuck at Step 3? Remember your dream of a growing profitable business to achieve your vision and goals? At Step 3 you realize in order to grow and be profitable, you need to install systems, structure, scorecards, and a management team. Plus you must get re-focused on what you want to achieve. You are BIZ-Builder who wants to own a successful, thriving, profitable, growing company.
Step 4. As a BIZ-Builder, you focus energy on your vision of owning a company that works instead of supervising, directing, controlling, or knowing how to do all the work. You focus on growing a profitable company instead of spending your time doing the work. What do successful business owners have in common? How did they break through from Step 2 to Step 3 to Step 4, and then on to Step 5? The only way to become a best in class business and move up to Step 5, is to start by implementing the BIZ-Builder Blueprint. To do this, you must replace yourself with operational systems, get your company organized so it will operate without your constant supervision, install structure and a management team who can run your company, and implement scorecards to track your progress towards achieving the results you want. This is the only way you can get beyond you as the business.
Step 5. And with all this in place, your company will continually improve, and it can then become a best in class business growing and making high profit margins. Systems, structure, scorecards, and an accountable management team will allow you to make this happen, combined with a written business development, sales and marketing plan.
Step 6. Eventually you will graduate to Step 6 and become a real company owner. When your role is primarily the owner instead of the worker, you’ll have time to find better customers and project opportunities, seek wealth building investments, develop new business ventures, and enjoy the benefits of business ownership. Your business will work for you!
Bill started his successful concrete construction business seven years ago. It grew quickly to $2 million in sales with fifteen employees. Then it stopped growing and his profits began to shrink. He was stuck on Step 3. When his company was smaller, it was easier for him to act as the ringleader, process the work flow, and meet with customers to keep them happy. But now he had to work harder and harder to keep his company above water.
Bill was frustrated and needed help. While he had a few supervisors and key foreman, he didn’t delegate much responsibility. He was still preparing every estimate, scheduling all the crews, writing every subcontract, and negotiating every contract. When he started his company, he had time to find new customers, manage the work, and make sure everything went well. But now that wasn’t happening, and customers were demanding more hands-on supervision, lower prices, and faster schedules. Bill was stuck, and his old ways of running the business weren’t working.
When you get stuck, you hate going to work because you have more demands and pressures than you can handle. So what should you do to get unstuck and grow your business?
- Re-focus on what you want! Stop and remember your original dream of owning a growing and profitable company that achieves your vision and goals, is organized, makes lots of money, has great customers, is run by your empowered management team, and gives you freedom and time to enjoy your life.
- Realize you are a BIZ-Builder! You will never reach your goals if you don’t grow. Are you too busy working to make any money? To grow, you’ve got to let go, delegate, and do what you do best. Growth starts with customers who want what you sell. And you are the best salesperson in your company. You must make time to go out and build relationships with loyal customers plus find new ones.
- Replace yourself with BIZ-Systems! In order to delegate to your team, you need written systems and procedures in place that don’t rely on you dictating and directing every move and decision on every transaction. Put your standards on paper and train your people to follow them. This is how you get beyond YOU as the business. Systems allow you to get out of doing and supervising work, and create time to make building your business the top priority.
- Hire the best! Now that you know where you are going and have systems in place, you can start to build a strong management team prepared to take your company to the next level. Good people without written systems can’t do a great job without your constant input.
- Enjoy the ride! With your company organized and growing, you can now focus on creating more opportunities for your business to prosper and grow.
As Bill’s company grew, he learned to delegate more responsibility to his management team. As they stopped relying on him to make decisions for them, they started to see the company’s potential, and got excited about their new roles and responsibilities. In order to grow, they next needed to standardize their operational systems. Now with managers in charge, they would have to get everyone trained to do things the same way through specific systems and procedures. As his managers began to install systems, Bill gained more free time to meet with existing and potential customers and look for better ways to serve them. He also began looking for opportunities to expand by offering new services to his customers. Profits began to rise, his equity and net worth grew, and free time became more available. Bill had gotten out of the muck and his business was working!
To get unstuck, what will you do differently with your time to get your business to deliver exactly what you want? Decide what you’ll do to make this happen, get unstuck, and out of the muck.