Siegal: Get Help

by lbanyay@solagroup.com

WhenCCN started, we began from the premise that every business needs help, for whatever reason, at some point in time. Size doesn’t matter. Whether you’re large, medium or small, a contracting business will need some kind of help sooner rather than later.

That might be because the business is floundering. More likely, it could be because as a business expands, it requires skills and expertise beyond the owner’s knowledge. For instance, you might be a fantastic installer who can also sell, but how good are you when it comes to drumming up leads? How capable are you when it comes to hiring, bookkeeping, accounting, etc.? 

Growing Pains

What you don’t know can hurt you. For instance, if you’re a salesperson who starts a company, you may find that managing a schedule of subcontractors is a full-time job. Eventually you hire a production manager. Soon your production manager takes on office management responsibilities, becomes overwhelmed and you now need an office manager. 

That’s how a contracting business grows. As you hire more people, everybody is doing a little bit — or a lot — of everything. The big cliché is that the small contractor wears a lot of hats, but the truth is everyone who works there has three or four hats on. And you might think that’s fine, but actually you’re running several big risks. First, people can only be truly competent at a few things, not 20 or 30. So your office manager might stand in for the HR manager you don’t have for a while. But while you saved yourself the expense of outsourcing that, your office manager really doesn’t know anything about HR law. They could end up making a bad mistake that lands you in a lawsuit. 

The other risk is that your employees will soon get tired of wearing all those hats. They’re not going to tell you that; what they’ll do is up and leave. Now you’re stuck with a hiring situation. 

Ignore, Train, or Outsource

If you find yourself in these kinds of circumstances — you and/or a few employees trying to do many things — remember you have three choices. The first is to do nothing and hope nothing goes wrong. That’s the choice many contractors opt for. But if something does go wrong, you could find yourself dealing with consequences painful enough to set your business back. 

The other two choices involve getting help with your business. You can invest in having someone train your employees in whatever task or set of tasks you want them to manage. It costs money and also that person’s time.

Option three is you can outsource some  functions of your growing business. That sounds expensive, but if you’re using subcontractors, you’re already outsourcing every portion of your production except the management. 

Costs Vs. Benefits 

Sometimes you don’t have the luxury of daydreaming about all this because circumstances force a decision. What if a huge storm hit your area and your phone was ringing off the hook? You would now need to hire and train, or subcontract, a lot of people, unless you were prepared to just watch that business go to someone else. It’s not a bad problem to have. The thing is to recognize what kind of help you need, when you’ll need it and then plan accordingly. 

In CCN’s Financial Planning Boot Camp,  we teach that, in order to make the kind of management decisions you have complete confidence in, you need accurate information about your numbers, especially costs. With that information in hand, you can produce management reports that will tell how every part of your business is functioning. You can see where you might need an additional person, or what area might call for bringing in an outside consultant. Your decision is based on analysis of costs vs. benefits. 

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