General Business Tips
Get Better Organized Through Building Company Systemsby George Hedley, president of HARDHAT Presentations; adapted for power sweeping contractors by Ranger Kidwell-Ross, editor, WorldSweeper.com
Every company must do a few things perfectly in order to be successful. If these important things aren't adhered to in a systematic and standardized way, the customer gets confused and stops doing business with the company.
Would you go to McDonalds if the hamburgers were different every time? Like any respected company, yours can't go forward if you do things in a disorganized and chaotic manner, either. Even with the pressures of building a profitable company, you must build systems in order to ensure your employees don't to do things out of sequence or by the seat of their pants.
Have you ever hired a manager or other employee too quickly without proper screening or reference checks because you were too busy and needed to fill a slot to get your jobs done? Then, several weeks or more later, because you didn't have time to properly supervise or train them, you discover they're not doing the job the way you want it done. Busy business owners and managers make hasty decisions because they don't have enough time to stop, plan, think and do what it takes to build an organized and systemized company.
Take a look at the following questions: How many of these describe your company?
You know what you need to do to make your company become the best it can be. However, most never figure out how to do it. Take a look at successful companies. They have written systems in place to allow managers to supervise and coach their people rather than micro-manage and make every decision to keep things running.
When I finally realized I couldn't be at every jobsite and watch everything for everybody, I had a choice. I could shrink my company back to a controllable size so I could continue to be the 'do it all' owner of a company that doesn't make very much money. Or I could install and replace myself with operational systems that allow my people to know how I want things done without my constant full time supervision and direction. This decision can free you to focus on important things that allow your company to grow and prosper.
What happens or doesn't happen when you do it all yourself? Nothing happens without your involvement when you don't have good systems in place to allow your people to do a good job without you reminding or telling them what to do. The more you do, the less your people do. When you make all the decisions and constantly tell them how you want things done, they won't grow as valuable employees.
This toxic behavior controls people and keeps them down not wanting to contribute more or become the best they can be. When you finally discover the problem with your people is you and not them, you'll realize the correct decision is to install systems. This will change your role from doer of the work to manager of the systems.
Without organizational and operational systems in place, good people won't help your problems. Six different good people will still do things six different ways. This is not a good solution to your company growth challenges. Start by making a list of the top ten things you absolutely want and must do perfectly for your company to become successful.
For example, as a sweeping contractor, you better have systems in place that give you accurate fixed and variable overhead costs to use to calculate bid costs. And, if you want to make a profit, you must have financial systems in place to track and collect money owed, forecast your cash needs and track your overhead and profit goals.
My top ten must do operational systems are as follows:
1. Install One System Every Week
Business is always changing and continually needs improvement as you grow, get new projects to build, find new customers and hire people to do the work. As a business owner or manager, you must also be improving and working on new ways to improve.
If you continue to do business the same way, you won't improve or get better. Look at professional sports. Teams are always installing new plays into their playbooks, trying new things to become better and constantly working on new ways to be better than their competition.
My goal is to install one new system every week. Our goal is 50 new or improved plays every year. As you create and write out your "MUST DO" playbook, start with the things that must be done to ensure success. Your goal is to create a playbook you can use as a training tool and guide how you want things done. This becomes you operational system book how your company does business. Remember, if it is not a written play book, everything is still in your head and you will be the only one calling the plays.
2. Manage the Systems
If you were going to buy another company, what would you want to know about it? Perhaps the top thing I would want to know is if the business works without the owner doing all the work.
A business that works is in control, systemized and organized. The systems run the business (not the owner). The owner or managers manage the systems (not do the work).
The organized and systemized company produces the same consistent results every time; this guarantees repeat loyal customers, a safe working environment, quality workmanship, on-time projects, empowered and accountable employees and an above average profit margin. With systems in place, your job changes from micro-managing and controlling every move for every employee to making sure the company systems are followed.
A simple follow-up procedure for every "must do" company or project system allows you to make sure each system was adhered to. For example, a sweeping contractor must have a pre-route checklist system to ensure everything is in place and ready to make sure the sweeper is safe and operational before the driver leaves the shop. Before they leave, the operator will make sure all items on the checklist are completed. S/he initials the items on the checklist and signs it as complete.
They also have a route sheet that outlines how work is to be done on each stop. These forms are included with his/her weekly paperwork. Your job is to make sure s/he followed the "must do" system by looking at the completed information. Ultimately, your oversight time lessens because the system will force them to do their work the company way.
3. Set and Track Targets
Everyone in your company needs to know what they're responsible for and when they're successful.
Playing basketball without a basket or scoreboard would not be very exciting. Ditto for working for a company without a scorecard or targets to hit. People need weekly feedback and information about their progress and achievement. This allows them to stay on track and make adjustments to improve and keep on course.
Everyone needs three or four things they can measure to strive for in their work. For example, a sweeper operator might track safety, quality, keeping on schedule and lack of customer complaints. Each of these areas can be quantified and measured every week. Your job is to make sure they get the proper input and feedback to set their targets and track the results.
4. Manage Your Money
Many sweeping company owners aren't focused enough on their bottom-line. They're focused on getting work done and hope they make enough money to pay the bills and have a little left over to pay for their lifestyle or buy a new boat.
They often hire a bookkeeper or let their wife manage the money and handle finances with little direction, support or interest. They think of accounting as a necessary evil instead of a valuable part of their success.
Why are you in business, to do work or make a profit? How can you make a profit without attention to financial details? I didn't say write the checks, I said manage the money and focus on hitting your financial goals. The big financial numbers you must know, watch, control and manage include:
Most accounting people are focused on paying the bills and not worried about making money. Unless you are focused on making money and what it takes to make a profit, it won't happen. Know your numbers and watch your bank account grow.
5. Make People A Priority
I am sick and tired of hearing people say they can't find any good trained help. Duh!
There aren't any good trained people sitting out in front of your office waiting for you to find them! Good trained help is a result of you making people a priority and building a great place to work. A great place to work has an ongoing training program where the employees are involved in at least 40 hours of training every year. There are incentives in place for people to encourage their friends to apply for jobs at their company.
There are reasons people want to work for a given company. People must get inspired by leadership and be recognized and praised on a regular basis. People must be empowered to make decisions and become accountable and responsible. Cutting-edge ideas, methods and technology must be used and encouraged. The best companies are organized and systemized and the boss is a coach instead of a control freak who screams and barks orders to the hired help.
Leaders who make people a priority do four simple things:
1. They provide clear expectations for employees to follow. These are written measurable systems, goals and targets so they clearly understand exactly what is expected on an ongoing basis.
6. Leverage Yourself
What holds your company back from profitable growth? With you at the helm holding the controls, in power and totally in control of everything and everyone, you are most likely the problem!
In order to grow your company you must leverage yourself by letting go of things you can delegate. When you delegate to others, they become more valuable and responsible. This allows you to concentrate on things that make a big difference in your future. Every day go through your in basket or to-do list and delegate one thing to a key manager or employee. This habit will become one of the best things you ever do.
7. Mandatory Meetings
Unsuccessful people are usually too busy to hold meetings. Meetings are a simple way to manage systems, leverage yourself and communicate expectations with your employees, managers, subcontractors and suppliers. The most important meetings for me are:
Weekly Team Huddle-Up: The crew or team gets together every Monday morning to review their targets for the upcoming week. They discuss progress and actions plans to accomplish the week's goals. Review the systems for any upcoming tasks for the week and get input from everyone on how to achieve the goals.
Pre-New Account Startup: Before your operator(s) get going on any new account, get everyone who will be involved together to review the scope of work. Go over the schedule, priorities, manpower requirements, unusual job rules and safety, quality and customer relationships.
Monthly Project Management Meeting: Every month hold this meeting to discuss every account being swept. The attendees should include the managers, office administrator and operators. Review the job progress, photos, updated schedule, proposed and executed change order logs, accounts receivable and payables, shop drawing and procurement logs and the job cost update report.
8. Focus On Your Field
Most employees and managers think a few hours or days ahead. In order to improve scheduling, quality and safety, install simple systems to keep your managers looking ahead and thinking about the future.
Install a four-week look ahead for whatever new or different is scheduled to occur in the next four weeks.
To improve quality and safety, require every route manager to provide, on a weekly basis, their take on any potential safety issues, add-on work that you might do on a property, and any quality improvement ideas for each property they review. Provide them with a pre-printed form that makes it easy to describe the work needed or problem observed with their recommendations to remedy the situation, the responsible party for taking the recommended action, and when the action should occur. Incorporate a follow-up system to make sure these actions happen or, if not, why not.
9. Know Your Costs
Profit starts with your estimate. Mandatory "must do" systems must include accurate time accounting to obtain accurate costs on each route.
A fully integrated job cost and accounting system must be installed and maintained to grow a profitable business. This will allow you to keep an accurate cost history for each account you sweep (or do other work for), which is the only way to keep your estimates accurate and know whether or not you're making money (and how much) on each of your current accounts.
10. Go See Your Top Customers
Want to make a lot of money by getting lots of negotiated add-on projects at your price? Or, if all you do is sweep, want to find out how happy your top customers are with the work your employees are doing for them?
Go see your top 10 to 20 customers every two to three months. Take them to lunch or dinner, or to a ballgame or other event. Get to know them. Find out what makes them tick. See what it takes to make them loyal and keep using your company. Don't be afraid to ask if there's anything they wished you were doing that you aren't now. You may find a way to help them achieve that goal better, and/or discover a new potential profit center you can enter.
When they tell you great things about the work your employees are doing, this is also a great time to ask if you may use their comments on your website, or verbally by your sales team, as testimonials. Hearing the praise of others, especially when it comes from leaders in the business community, is a tremendous help in getting new customers.
Money is made by creating relationships with your top customers. If you don't install systems to build customer relationships, your only method to get work is to bid projects and hope to be awarded the job by being low bidder.
11. Bonus Must Do - Seek Wealth Building Opportunities
When I speak at conventions, people often ask me for my best business tip. My advice is to buy your building before your next truck.
Wealthy sweeping company owners own real estate. Poor contractors own equipment. The choice is yours!
By replacing yourself with operational systems, you'll have time to buy your own building, seek better customers, look for profitable jobs, find better people and seek business opportunities. When you work too hard and make all the everyday decisions, you'll never have time to get better and you'll peak out at the level of what you can control.
Your choice: Die trying to do it all yourself or replace yourself with written operational systems.
George Hedley owns Hedley Construction and Hardhat Presentations. He is the author of the "The Business Success Blueprint Series" now available in 8-workbook and audio CD sets. He is available to speak at your organization on his proven system to build profits, people, customers and wealth.
E-mail him to receive a free copy of his book entitled "Everything Contractors Know About Making A Profit," sign up for his free management e-newsletter, visit his online bookstore, or receive more information. Call 800-851-8553, visit his website at www.hardhatpresentations.com or e-mail George at firstname.lastname@example.org.
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