How to expand a trade business

[avalanche]

I am in a position that seems very different to most I read about
Most seem to want to expand but lack the funds and the work

I have built up decent funds and turn down 1 in 4 jobs but want to grow the business

The problem is I have a couple of lads working for me who I keep busy most of the time but they do not do the work as well or professionally as I do myself.
I only do contract work for other contractors, not direct to the public and they are never happy if im not on the job personally, I have tried to get the lads to up their standards but they can never see what is wrong.

I get a lot of jobs that would last say 2wks - 1 month but it is usually more than we can handle for a couple of months then steady- quieter for a month or so

All the best lads are busy or not interested in short term work, the ones looking for work are similar to the lads I have already

How do I get to the point of taking more work on while having good quality tradesmen to do the work
Its a catch 22 that has gone on for a few years now

I turn down jobs because I dont have the resources, a month later I will get calls off tradesmen looking for work but then dont have the work to offer them.

Any suggestions?

 

[PDW Electrical Services]

This is the ultimate catch 22 that im currently in and so are plenty of other tradesmen, grow and your standards take a nosedive, and you loose the edge that got you where you are in the first place

You need to employ the right people, thats what im told, all the time by people who are not in the trades, truth of the matter is if they are any good they will not want to work on a wage for someone else!

Thats why in general nearly all construction companies that are any bigger than a few people, have really bad service and workmanship , and have nothing but utter clowns working for them

Thats why the one man band rules the trades industry and is likely to always do so

If you find out how to grow your business and still keep your standards and service anywhere near where it is currently, please tell me the secret!

 

[JobTrackerPro]

What an interesting dilemma to be in. Its very difficult to grow a business while still retaining the high standards that you would like to be associated with.

The first point your post raises is why do you want to grow the business? Think hard about your reasons, as from what you say you are already pretty successful. However painful it is to turn down work, you must balance doing that with the "cost" of taking on that work. Yes, you will have quiet times when you rue your decision to turn it down, but you can only make decisions based on the facts at the time.

If you do want to grow your business, have you thought about creating incentives for your lads to do the work to the high standard you are after? Either money, or maybe extra time off are good options, but this does depend on if they are capable of doing the work to your standards. Maybe consider giving them extra training (either from yourself or others) in order the do the work properly?

Expanding a business is one of the hardest and most difficult things to do.... maybe giving an insight into how complex and time consuming it is to run a business would assist the good people out there to realise its not so easy to be successful on your own and that working for an enlightened employer is in fact better for a lot of them.

Good luck and let us know how you get on.

 

[Karllacey]

Hi,

Sent you a message - I have a solution to your issues.

 

[avalanche]

Sent you 1 back, - no you have not

 

[avalanche]

What an interesting dilemma to be in. Its very difficult to grow a business while still retaining the high standards that you would like to be associated with.

The first point your post raises is why do you want to grow the business? Think hard about your reasons, as from what you say you are already pretty successful. However painful it is to turn down work, you must balance doing that with the "cost" of taking on that work. Yes, you will have quiet times when you rue your decision to turn it down, but you can only make decisions based on the facts at the time.

If you do want to grow your business, have you thought about creating incentives for your lads to do the work to the high standard you are after? Either money, or maybe extra time off are good options, but this does depend on if they are capable of doing the work to your standards. Maybe consider giving them extra training (either from yourself or others) in order the do the work properly?

Expanding a business is one of the hardest and most difficult things to do.... maybe giving an insight into how complex and time consuming it is to run a business would assist the good people out there to realise its not so easy to be successful on your own and that working for an enlightened employer is in fact better for a lot of them.

Good luck and let us know how you get on.

The need to grow the business is 3 fold

1. The obvious one is more profit
2. Flexibility - with the team ive got it makes it very hard to have overlapping jobs causing quieter periods.
3. I need to spend a bit less time on the tools to over see jobs to keep an eye on progress & quality,
I also need time in the day to do my paperwork which I currently do at nights and weekends - not a good work/life balance.
With the team Ive got I cannot make enough to allow me to do this.

 

[seoswat]

Remember you can still grow your business without actually accepting more jobs.

Focus on your quality first and foremost.

If required, hire an apprentice if you have time that is.

If by now the 2 lads are not up to scratch then its time to look for someone else.

I dont mean this to sound rude either but you probably are not the best person at your job in the UK, there are bound to be people around who you can find to do as good a job as you with some time dedication training from your point of view.

Ditch the dead weight and bring in fresh talent.

Quality over quantity everytime my friend

 

[CKG]

It's a tough one. Staff was always the problem for me.

Of all the well respected small firms I know in my area they all have staff that have been with them for donkeys years 10-20-30 years in some cases. Apprentices rarely stick around.

You can't short cut this game.

Personally if I was building up decent funds in reserve - I'd keep doing what I was doing and just crack the whip a bit harder.

I think if you want to be the floating boss who whips around from job to job taking care of business you need 4 guys on the road fully stack with work 52 weeks a year. Employ more and you need office staff. Employ office staff you need an office. To keep margins up and pay for office you then need more staff and more work repeat 'till endex. More mouths to feed more problems etc etc. It never gets easy my friend.

 

[PDW Electrical Services]

It's a tough one. Staff was always the problem for me.

Of all the well respected small firms I know in my area they all have staff that have been with them for donkeys years 10-20-30 years in some cases. Apprentices rarely stick around.

You can't short cut this game.

Personally if I was building up decent funds in reserve - I'd keep doing what I was doing and just crack the whip a bit harder.

I think if you want to be the floating boss who whips around from job to job taking care of business you need 4 guys on the road fully stack with work 52 weeks a year. Employ more and you need office staff. Employ office staff you need an office. To keep margins up and pay for office you then need more staff and more work repeat 'till endex. More mouths to feed more problems etc etc. It never gets easy my friend.

Totally agree, in my attempts to expand, i have failed at finding good enough staff, and have also come to realise that employing and managing people is just a whole new nightmare that totally drains the enthusiasm i have for the work

your costs go up dramatically whilst your margins dont, the pressure to keep the work coming in is dramatically increased and it lead to me taking on bad work for high risk clients that i would of normally walked away from

I have looked back over my jobs for the last few years and have roughly calculated that to equal my income working 5 days a week on my own like usual, i would need around 6 full time electricians to bring in enough to keep me off the tools

And this is if i could find enough work to keep them employed, which i doubt i could do consistantly, and if they were good enough to finish jobs first time to an acceptable standard

Bearing in mind standards have to be very high and the slightest mistake or over run on time will wipe out your profit on a job

All in all its just not worth the agro and i have decieded that i will just crack on and use my profit to invest or maybe put it into another business

Using systems to simplify things to allow companies to grow is key if you work in a repetitive business but in the electrical trade there are just too many variables, everyday is a totally different challenge and to systemise it is virtually impossible

 

[Tech4Homes]

We've recently gone from about 20 electricians + about 10 regular self-employed electricians, down to 11 electricians + self-employed for a while and more recently to just two electricians, an improver and an apprentice, plus myself and my dad in the office now going out on tools and a couple of self-employed staff. It's like a weight has been lifted!!

As mentioned, to come off the tools you need 4-6 electricians doing profitable work, to keep that work profitable you either need to be there every day and will need a sales man to keep the working coming in, or you need a supervisor to look after the staff whilst you look for work, which either way puts costs up so now you need 8 electricians to achieve the same profit margins, feels like a never ending loop to the point where you get to turning over £2 million + but you're somehow still losing money.

I was really struggling to keep 6 electricians in weekly work, whilst other office staff kept the rest busy, bearing in mind it's not just finding work sources, it's estimating, sorting materials, dealing with staff, clients, discussing jobs, discussing them again, discussing them for the third time when they spend three hours talking about everything but electrics... everything seems to zap your time. Then the second you have no work everyone starts turning on you, you have to pay them when you're not getting paid and a few weeks of minimal work can see all your profits gone.

My theory now is to stay small, work on and off the tools myself, pick and choose the work a bit more, no more working for bad payers just because we need to keep the staff busy etc... move into more profitable areas of work and fix the problems we had when we were bigger before we work out a way to go bigger without as much aggro. However my dad now seems to want to take on another estimator already, and again as above, another estimator means we'll need another 4-6 staff out busy every day to pay his way, by which point you've got 12 staff on the tools, how do you look after them? Supervisor! Costs go up.. etc...

I don't want to sound too negative, I'm sure there is a formula for this and there are certainly companies out there doing it right, but it's very easy to get wrong. All I know is I'm seeing some of our clients working by themselves and clearing 400k profit a year so it's possible either way to make some decent money!! When I find out how to make some I'll let you know haha!

 

[LocalGuy]

Well one thing that you can do is keep a list of every person that you know that is available for work and keeps contacting you for work, then if a job comes in, find out if anyone is available. Then keep reaching out to people to grow your list but working with the new people to ensure they can work up to a good standard and keep expanding from there.

 

[The Byre]

1. Get someone to do all the admin stuff. Books, wages, ordering, invoicing, mail etc. The best is a wife, but one decent employee for all the office work is essential. Keep a close eye on it, but get all that crap off your back now!

2. Don't go off the tools. Stay at the rock face, but supervise. Give direct orders and go from job to job, overseeing the work being done. Be the guy that finishes the job and signs off the final product.

3. Go up market and turn down the fiddly smaller jobs that are more drive there and drive back, than work.

4. Innovate! Be the plasterer that has the local Dragon Board or Knauf fibre board franchise and knows how to protect against flooding. Be the plumber that knows how to tap for ground water and install an own-supply for water. Be the electrician that specialises in on-roof wind and solar systems. Be the brickie that introduces Ytong insulation bricking to the area.

5. Do some proper marketing. Website, brochures, even information days at local community centres. Reach out to people to tell them that they need better water, better insulation, sophisticated electrical systems, high-tech roofing, solar power or whatever your specialisation is.

 

[harper101]

Agree with you, The Byre.

That's division of labor while maintaining the quality of work and still be open to new ideas and creativity to reach out the target market.

 

[JobTrackerPro]

Great advice there The Byre.... its important to stay doing the things you do best and delegate the less important stuff, remembering that you need someone decent to do the other things. Getting someone to do the admin and using the right systems will free your time to innovate, do the marketing and supervise.

Its difficult to let go of things, but its the only way that you can expand without cloning yourself !

If you can't let go, and trust others to do the work then you are better off staying small.

 

[Tech4Homes]

Further to my last post, we're now down to 4 staff and a couple of subbies. Myself and the Md are out on the tools every day and now just flicking between big jobs whilst completing a few of the smaller jobs/call outs. It appears that jobs are running better and staff are happier and doing better, we can control them a lot better also which is good all round.

It's still early days but it seems this is the way forward, The Byre is right really, supervise others and you'll expand, you can only do so much yourself.

We're looking to concentrate on the "harder" services that we offer (residential and commercial lighting control and automation) and I'm going to TRY and ignore the little domestic call outs that generally take more time than they earn.

 

[The Byre]

I'm going to TRY and ignore the little domestic call outs that generally take more time than they earn.

You can still earn from them, by having a flat call-out fee, or by using a partner company or tradesman who is prepared to put up with people that want one cable or pipe laid.

But when you hear -

"Can I hire a car for just two hours?"

"Can you install one electric plug?"

"Can you change that old tap for this one I bought at B&Q already?"

"Can you just paint that bit above the door?"

It is time to fire the customer, but politely of course!

 

[PDW Electrical Services]

The small domestic jobs can work out to be quite profitable as long as you make them worth your while

Just have a decent first hour charge