What to do when growth overwhelms you

By Timothy B. Miller

November 25, 2011

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Many restorers would say that preparing for rapid growth is putting the cart before the horse. The problem, they would say, is getting the business, not handling it!

And while that’s understandable, we’ve often seen that once we’ve developed and turned on the “sales engine” for restorers, a number of secondary problems arise. In fact, handling the growth of the business was every bit as big a challenge (and maybe bigger) than transforming the company’s marketing orientation to be able to predictably grow the company.

Growth increases complexity in all businesses. And because restoration businesses are complex to begin with, rapid growth can quickly overwhelm a contractor who is not prepared for it.

Here are just a few of the problems that growing restoration companies encounter:
•Finding out that margins have slipped way below the acceptable percentages and finding this out 60 days after completion of the work, long after you had the opportunity to do something about it. And, margins across the board are slipping.
•Scheduling nightmares and inefficient utilization of labor resources.
•A seemingly increasing number of problems on the job, from complaining customers, to aggressive adjusters, to subcontractor issues, with the owner losing time and focus running around trying to solve them.
•Job issues that force the company to “throw money” (often in the form of new hires) at the problems in order to resolve them and, in so doing, sacrificing margins.
•Equipment being lost and unaccounted for.
•Poor quality performance by sub-contractors that goes unaddressed for months.
•Payments not being received because of a misunderstanding of how to deal with various mortgage companies and their interests.
•Losing out on lien rights because no one was paying attention and the deadline slipped by.
•An employee leaves and a key adjuster stops referring work because he was billed for one of his “pet peeve” items that only the employee knew about.
•And so on!

Typically, there are three key areas of concern for restorers.

The first is the ability of the owner to stop bottlenecking the company! The owner must have an organizational structure in place that allows him or her to delegate to trained, proven performers on the management team.

Second, systems and processes must be in place for virtually every activity, and the company should never undertake anything that it is not going to document and make a part of its operations manual. Systems and processes should reflect the most efficient ways of accomplishing the specific tasks they are related to. They should seek to reduce redundancy, eliminate double entry and duplicate steps and ideally should focus on developing a lean, streamlined organization.

Third, rapidly growing companies have a tremendous need for data in as close to real time as possible. Owners and managers need information in order to take action during a job rather than after the fact. They also need historical data to review and evaluate in order to predict possible futures and outcomes and devise prudent courses of action.

If it seems like an awful lot of work and personal growth on the part of owners and managers to prepare a company for growth, that’s because it is! But the alternative of unplanned growth will cost everyone big in terms of energy, stress and especially profits and opportunity.

Tim Miller is the president of Business Development Associates, Inc., a marketing consulting firm that works exclusively in the cleaning and restoration industry. He can be reached at tim@gobda.com or (773)777-9956.