[PoleBarnsNY]

I am being over run with many more qualified leads than I can currently accommodate. I estimate it is more than 10 times the leads I can even respond to.

I have several choices to make.

Any advice of those that have built a bigger, better, more profitable company from an unmanageable lead flow greatly appreciated.

If you have successfully capitalized on a similar opportunity please tell me did you

1. Hire office staff and offload qualifying, follow up, permitting and ordering materials and administration and try to handle sales myself?
2. Hire one or more sales people?
3. Hire more subs to build more projects?
4. Hire more in house trades to build more projects?
5. Raise prices aggressively?
6. Something else?

One mentor in the same industry with many more years of experience and a much larger company that built up from scratch says hiring sub crews is the answer and then offloading some sales and admin and step back and build controls to keep it all on the rails.

What steps did you take to transition to a bigger company. I have to redefine my role and let go of my current involvement. That takes some getting used to. What controls were most helpful to keep things under control?

 

[Anderson]

Great question I am finding my way into the same boat. Only person that made any sense said I was "Too big to be small and to small to be Big"
not that it helped much. Watching your thread

 

[Jaws]

"Too big to be small and to small to be Big"

Thats a good way to put it.

I reffer a couple of good GCs when I am too busy and they cant wait.

At this point we are not prepared to grow any quicker than we are, and I dont want to be any bigger really. Just hope we can keep this flow up. :thumbsup: Having 3 good sized projects and a handful of smaller jobs (smaller jobs have higher margins for us) is ideal.

 

[hdavis]

Do you know why you're getting all these qualified leads?

If you want to grow gross at 25% per year, the guideline is you have to have 25% free cash flow to finance the growth. 100% growth takes 100% free cash flow.

There are a couple risks if you try to expand. The big killer risk that sinks people is you have to have the money to cover the increased expenses / payroll / accounts receivable. If you take your eye off the ball in getting paid, or customers start dragging payments out on the middle of an expansion, you can run out of money. You need to work out hiring / spending / payment scenarios for the expansion that are realistic, as well as some pessimistic ones. There's also the possibility of a customer that stiffs you. Financing the expansion out of the business cash flow is more desirable to me than getting a secured line of credit because the most you can lose in the one case is your cash flow outlay, but on a secured loan you can lose your business.

A slow death risk is that whatever it is that brings customers to use you changes during the expansion, and eventually your word of mouth business drops off. You have to know why people use you and not your competitors.

With no other information than what you gave, I'd prepare to expand by increasing my margins modestly, and see what it does to close rates, or possibly quoting different projects at different margins to see how price sensitive your market is.

 

[MarkNoV]

There is no mystery to this. The basic tool is a pro-forma income statement and pro-forma budget.

You can download free templates of both from the Microsoft website or find many more on the web,
eg:http://office.microsoft.com/en-ca/templates/pro-forma-income-statement-TC101877359.aspx

Nobody knows your business better that you, just take your current numbers from your latest tax return. Plug in the numbers that you think might result from the anticipated growth and see what happens with different scenarios. Subs vs employees, administration costs, advertising expenses, etc.

Mark.

 

[jaydee]

Find a business coach / mentor.

think it through, slowly.

growth is good, to fast may throw you backwards,

Good luck.

 

[huggytree]

either hire people and grow or raise your prices

both may get you the same profit at the end of the day.....id stay small and raise my prices

i make as much or more as a 1 man shop than some 4-6 man shops do....(profit at the end of the year + my wages)..i know of a guy who owns a plumbing/hvac shop w/ 10+ guys....i make more at the end of the year by myself...bigger doesnt mean more $$ always.....i prefer to stay small right now and shoot for top quality

if your getting so much work odds are your under priced right now

 

[BDiamond]

I am being over run with many more qualified leads than I can currently accommodate. I estimate it is more than 10 times the leads I can even respond to.

Not a bad problem to have!

Any advice of those that have built a bigger, better, more profitable company from an unmanageable lead flow greatly appreciated.

I've been here. In 2010 we were at about $3.6M installed business and decided to kick it up and got to $10M in installed revenue by end of 2013.

1. Hire office staff and offload qualifying, follow up, permitting and ordering materials and administration and try to handle sales myself?

You got it. Get a highly skilled office manager and they will practically run your business for you. Not only handle sales but recruit, train, develop, and retain a larger sales force. No one can sell your business or knows your system better than you. MAKE SURE when you're recruiting you hire guys that could be a potential sales manager for you.

3. Hire more subs to build more projects?

Yes. They don't cost you anything unless the job is contracted and if the leads dissappear you don't have the overhead to cover.

4. Hire more in house trades to build more projects?

No. If the leads don't convert or dry up you're going to have some additional costs to cover.

5. Raise prices aggressively?

That won't decrease the lead flow. If you were closing uncharacteristically high I would say yes. If not, leave pricing where it is at.

6. Something else?

Qualify hard! We had this problem too and I did everything mentioned above to find out there we a lot of tire kickers in the mix. We started qualifying a lot harder when setting the appointments. Demo rate, closing rate, went up. We started bumping prices 5% a month until it started to normalize.

What controls were most helpful to keep things under control?

Processes...

It took me 4 months to get training programs, recruiting ads, comp plans, job flow processes, HR docs, etc. created so that when I started I wouldn't need to scramble to create a script for an appointment setter in the middle of running a business. I still have training slides and step-by-step guidelines for positions I will need this year that I have never hired for.

Have written expectations outlined for all your staff, set goals, hold them accountable, praise when it's deserved and fire when necessary.