Rapid Sales Growth

BigLou

Looks like we're going to do about $1M in sales this year, up from $500K last year.

While I'm thrilled at the rapid growth in sales, I'm also concerned about being able to produce everything properly. So I've implemented job descriptions, started making an operations manual, implementing a lead carpenter system. Financing is in place, insurance and contracts have been reviewed. And I'm hanging up the tool belt - I'll just be supervising production.

Anything missing? Any tips?

BMAN

Just remember the little guy where you used to be and they will follow you.

Ed the Roofer

When you hang up the tool belt full time and leave the jobsites in your crews hands, the production levels and quality control may slip, so stay on top of that as much as possible from thew get go to minimize the downslide.

Also, designate a dependable guy for punch list and warranty follow through immediately in one of their job descriptions and give him authority to rat out and recommend actions to be taken against any of the slip-sliders that let the production and quality go down hill.

Delegate, so you do not have to be an over paid gopher.

Ed

P.S. Oh, and raise your prices enough to accomodate the costs associated with the new quality control tech.

rbsremodeling

The same thing happened to me in 04. Quality slipped a little but it was my fault. I felt I still had to approve and do everything myself. As others has mention if you delegate the work correctly it helps the stem the quality control issue. I also have a punch out guy who goes behind everyone once the jobs are done and like ED says he rats out everyone from my crew to the subs. Also hiring a project manager maybe an obtion as well as taking off your tool belt. The hours become longer and longer with out additional help. Instead of going around and managing 4 jobs at a time it was 8 or more it got old quickly, trying to keep up with all the odds and ends per project was overwhelming. My project manager/gopher was a 23 year old kid with decent construction knowledge that was eager to learn and paid attention to how everything was done. He started off at 15 bucks 2 years ago and is at 17 bucks now. Well worth it and he continues to improve his skill, knowledge and usefullness to my company.

PS Because of his youth there are days when I don't have the get up and go and he always pushes me along or tells me to relax and he goes the extra mile when I don't have it in me

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ChrWright

The transition you describe is a perilous one.

Hopefully you've sat down and made a detailed business plan for taking things to the next level. Chances are, you've underestimated how significant a change this is going to be and how differently you'll have to approach everything: from bidding, to project management, to cash flow, etc. etc. etc.

No disrespect intended. But you need to be drop dead sober about how you go about expanding--especially in this market. You HAVE TO raise your prices in order to cover the increased overhead. You'll also find things take longer.

If you're at all picky, and quality conscious--you're going to need to stay in the field at least part time in order to train your people the way you like things done.

Slow down and take a good hard look at the numbers again. Expanding a business is like unleashing a ravenous beast. It must be fed each and every week with revenue. Be sure you can keep the beast fed, with enough left for yourself at the end of the day. If you don't...

The beast will either be a good servant, or a terrible master.

One slow month...one bad project...one difficult client...and you could end up picked clean and left for the buzzards. There are more than enough skeletons lying beside the road to attest to this.

There's a joke you should heed that speaks to this:

Q "How do you open a small business?"

A "Open a large one, and wait."

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Christopher Wright, CR: President @ WrightWorks, LLC/President @ Central Indiana NARI, Named to the 2010 REMODELING Big50
www.WrightWorks.net - Facebook - Twitter - Carmel Remodeling
Indianapolis Kitchen Remodeling Contractor - You Can Get There From Here

ruskent

I am going for similar growth this year. For one, i know i need to get someone to help me with the office work. That is one area i am lacking in so bad. I really need to find someone with experience running a office to work 10-15 hours a week.

One key to the big growth is making sure you do enough advertising to met those #s.


I am sure you will do fine. Just looking at myself, i realize how much smarter i was then last year.
Its next year that will be hard, if you want to keep growing at the same %!

Ed the Roofer

Ruskent,

You should read through Grumpy's thread about hiring an administrative assistant in the business sub-forum.

Each year I think I learn more too, but I actualy find out how much I still don't know. I like to always continue learning as much as possible and this forum and others help tremendously by applying what others have done in similar circumstances before me.

Ed

ruskent

I have been reading that thread. I almost need someone more qualified then grumpy needs. Seems like grumpy already has office systems in place and really just needs someone to follow them

Ed the Roofer

Yeah, he is pretty well organized.

Now go back to before I hired my first secretary, and this train of though goes along with any position.

I did not know what I didn't know.....

What do I look for?

What tasks should they be able to do?

I was doing everything manually and keeping track of al AR and AP by hand. I was good at it, until one day I was completely overwhelmed and I was always behind and did not even know which tasks needed to be done.

If you don't know what tasks need to be done, find someone who does that for a living and overpay them on a part time basis, just to get you pointed in the right direction. They wil understand that it is just a temporary gig for them and can help out with the thought process that needs to be understood by the owner.

For the QC punchlist person, at least I would have a good understanding of what tasks need to be done and what my timeframe to achieve those tasks would be.

That is different than the time frame of an employee doing the same tasks. They will be trying to over satisfy the client, which is not a bad thing, but they have to be aware of the financial considerations and additional burden it is costing you to have them do your former tasks.

Write up small easy steps in different procedures manuals to be added on to in an ongoing basis. It does not have to be a best seler novel, but should be direct and to the point.

Micro-analize each small step to achieve the final desired outcome of profit along with customer satisfaction. Write it down. Start with an index. Revise it as necessary.

Think from that employees perspective and address the issues they wil be seeking guidance on. Write down possible alternative solutions on how to approach different scenarios. Allow individual flexibility and don't keep it as a MUST be done, but rather a suggested method. If you tie others down with only your own thinking, then their thoughts wil not be alowed to grow.

Keep up with it. When you do those tasks currently, keep notes about everything from the initial phone cal to the final customer approval and your dedicated folow up after the fact.

Ed

P.S. Another thought. Is such growth required?

Can you better achieve the profit goals by charging 10 % more on the current amount of work?

Can you sell a $ 5,000.00 job for $ 5,500.00?

Yes, you wil lose some sales, but you more than make up for it with the additional revenue and can appropriate enough proper funds for the overwhelming customer satisfation results that consumers never seem to get. You can be that contractor instead of all of the rest.

ruskent

Thats a good point. Since the price of a job can very so much by a change in material its hard to accuratly forcast gross sales. I know how much labor i need to sell to met my overhead and salary requirements. I just can not pin point the amount of materials i will use. I very well could just do 750k in sales and met my labor requirements.




On a side note- I do not understand the reason of figuring profit as a percentage of a job. So if i spend the whole year installing marble i am suppose to make more then if i am just doing concete pavers? It does not seem to make sense to me? What i do is figure how much profit i want my business to make per a year and divide it by the # of days my business operates a year.

Grumpy

Welcome to the big leagues, now have you considered raising your prices to temper off this uncontrollable growth? As well raising your prices will be necessary to also support the growth in company size. More work = more employees, larger office, more trucks.

Everything you said is good but it's not as easy as you have said. My various manuals are an ever evolving and are changed and improved constantly.

Have you considered teaming with various manufacturers/associations to train and certify yourself, your company and your employees?


And finally don't go out and buy that new f350 you've had your eye on until you're sure all is well.

Grumpy

I've been spending alot of time these past few days improving my administation manual. I have several manuals, sales manual, administrative manual, production manual, saftey manual, financial manual, which I am goign to combine with the administrative.

So I know I am going to be re-hiring someone for the administration part and since these past two weeks I have been doing all the administration myself I've just simply been writing down step by step what I've been doing. That's really all a manual is.

For example, sending out invoices... (I'm paraphrasing off the top of my head).

From time to time, usuallyd aily, various jobs will need to be billed. This is the duty of the office administrative staff. Billing will either be progress or final as indicated on the sticker on the job folder. If you have questions regarding an invoice please contact the production manager or the job estimator.

Pricing will be found on the contract within the job folder. Any extras such as rotten wood will be indicated on the sticker found on the outside of the job folder.

To create an invoice open quickbooks, a short cut is on your desktop. Log in if necessary and click from the menu Customers > Create Invoices. Type the customers name into the Customer: Job box. Last name first, then first name Ie: Jones, Bill. The name will already exist in most cases. You will need to also link the invoice to the job as some customers have multiple jobs. Jones, Bill:2008-999. If the job does not exist, please add it.

To add a job simply append :2008-999 where you replace 2008-999 with the actual job number found on the contract. When you do, if the job does not exist you will be prompted to add it. DO NOT do a quick add, as it is very important you add job specific details. You may do this by clicking "Set up".

If, or after, the job has already been added press tab, which will take you to the bill date, correct if necessary but it should deftault to today's date. Tab again....


Ok sparing you all the details of creating an invoice...


After all the invoices have been created you can print all invoices at once by clicking File > Print Forms > INvoices and fiollowing the on screen prompts. Please either print two copies of each invoice, if possible, or make copies of each invoice. The original should be printed in color.

Provide the sales rep with a copy of the invoice. Please put the copy in the sale's rep's inbox.

The invoices should be mailed in #10 windowed envelopes. The invoices are setup to match the window size and location so that a seperate envelope does not need to be printed. In the #10 windowed envelope please include the invoice, a #9 pre-printed return envelope, and a customer satisfaction survey.


Again this is just off the top of my head, the actual "page" of the manual for creating and sending invoices is a few pages long. I am adding screen shots when I have time.

HomeMedia Pros

Guys,

the more I read about this the more concerned I get about the level of re-do in administration of our business. I suggest invest in technology and workflow. It is simple these days with little knowledge of computers.

For example: You do an estimate, with one click of a button you should be able to convert it to invoice, and system should automaticaly generate project plan, which automaticaly creates work orders. When your guys come to shop/office to turn in timecards (they do want to get paid) they check of what work orders were done. Your leads do punchdown on PDA that feeds the same system. All of this is available to you on one page dashboard where you can drill down. And it even sends out thank you letters, emails, copies of contracts and calculates comission. What does this system cost: We spend about $50 per month per user and $20 per month per labor/worker but the Return on Investment is thousands of dollars per month: No missed issues, tasks, orders are faxed automaticaly to vendors, purchase orders approved, time cards in order, comissions calcuated. Why not invest when you small so as you grow it grows with you and you are in control.

you cant live without it and run a 1M + business. No office admin/manager could replace a solid business process workflow. Oh and the syste forces people to use your steps, your project plans, and way you do things all the way to the smallest guy in the food chain.

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There are no stupid questions, but there are a lot of inquisitive idiots...

we like them all at www.homemediapros.com

BigLou

Some excellent tips, my thanks to everyone. I do have a business plan in place which includes a HR plan, marketing pan and detailed budget. If its not in the budget, I don't buy it, so no F350 this year. I'm more of a GM guy anyways, my 1500 is in good shape, and the less I do in the field, the less need I have for a big truck.

Two things have caught my attention in the above posts. 1) Don't be an overpaid gopher 2) punch list. Last year I began delegating more to avoid #1 but I still get caught in that role sometimes. And the punch list sometimes drags on way too long. I've recently implemented new procedures which will help, but having a good punch out person is what I've got to look for, because right now I'm the best one in our company.

HomeMedia Pros: what software package are you using?

Grumpy

I agree with home media pros in theory. However due to the limitations of quick books estimating we do not do our estimates on quickbooks thus the one click invoicing isn't possible in that manner.

However in theory he's 100% correct, the less repetitive work the better! I just know I'm never going to find somethign that does exactly what I want unless it's built custom.

What software do you use home media?

rbsremodeling

I use a program that does some of what homemedia suggests. I do all my appointments, estimates, contracts, c/o's, scheduling etc it. It then send an estimate to link in quick books, i can post payments or the office manager can post them depending on the scenario. THis software is not for everyone. But I can say it has simplified my office and paper work a bit. It runs on a office server so everyone is up to date on whats happening. No I am not pushing the software and it it is not for everyone. I think if your not a remodeler doing over 500k sale it is not worth it. I also think it works for remodelers who do jobs over say 30k.


The software called (Improvebuild) remodelers business solution.

For smaller guys 300k and less I would suggest hometech and virtual boss


I have been paying attention to myonlinetoolbox. I think it has good potential for service work and smaller trade contractors. I like the web access and some of its features are neat.


Finally Aladdin recommended Smart contractor and has a lot of great features that are very useful

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