Professional Series Part 3 - Being Structured
We are in our series on professional companies and professional people in the restoration industry.
If you missed the first 2 parts, you can find the blogs here:
Part 1 - Technically Qualified Blog
This is the third part of this series and I'm excited about this one because this is more in the lane of what I have spent my career doing and coaching.
And that's being structured.
Having an organized, responsible systems and process-oriented company.
Just because we're a small business, it doesn't mean we have to run like a small business. It's okay for a small business to have a big corporate structure and you can find that in a lot of different ways.
I think it's easier to become a larger company when you have scalable systems. It’s quite difficult if you have a small company, fumble your way through only to lose time and money, then one day you realize that you don’t have any effective systems at all.
You have to know that those big companies did not just get where they were in an instant. Of course, they went through a process paired with tons of experiences to establish a strong organization. And then built an effective team to work together in achieving their goals and reaching success.
You might think that these aren't achievable tenets for a smaller company and you'd be wrong. The information is all there. You might have heard the saying that “there's nothing new to learn under the sun”. I think that’s wrong. You can learn plenty and start with getting started.
The information is out there. You just need to get really serious about reading books, surrounding yourself with mentors, colleagues, and peers. Do whatever you need to do.
The answers are there. The recipe for the ingredients that you already have, it's out there ready for you to use. The best people will probably give you most of that stuff because they want to see you succeed.
This is often when people start reaching out to Restoration Advisers for coaching. We are happy to help. But you can do a lot of things on your own.
Check out this week's episode of Disaster Podcaster:
Or on YouTube.
Vision, Mission, and Goals
A structured company needs to have vision, mission, and goals.
A lot of people ignore these.
They ignore developing these fundamental components, get them wrong or they even misinterpret what they are really about.
There are a lot of people who have their own opinion about what a quality mission and vision are. I will tell you that they are internal and they are not marketing tools.
They are often confused with slogans and taglines.
Two VERY different things.
If you want to have something catchy on your website, on your business card, or on your email signature, that's fine. It’s your elevator pitch.
Imagine you're the captain of a boat, you must assemble a team to row. If you plan to get anywhere, everyone needs to row together. If everyone is rowing, heads down…..they need a captain to keep their heading or they will find themselves miles off course and a boat full of frustrated rowers.
As hard as you may try, you cannot read other people's mission statements , slap your name on it and convince everyone it’s your own.
Create your OWN.
Focus on what you want to achieve.
That's your mission, vision, and goals. The core values should be in there, too, and they should align with your goals.
OK, now you have your mission and vision, but does your team know?
Everyone needs to know what your vision, mission, and goals are. If everyone loves them, they embrace it. Then, the next set of questions will follow.
Where are we NOW in achieving our vision, mission, and goals?
Are we halfway there?
Have we even started?
How many leads a week do you need based on your closing ratio?
What's the closing ratio that you require?
All of these are some of the goals that our clients have chosen. At a minimum they look at their scorecard every week to monitor performance.
The next thing on the professional company list is organizational/accountability clarity.
If an eight-person team doesn't know the hierarchy, they need a chart.
You, as a manager or a leader, need to develop this hierarchy. Not to allow people to be the boss…..but to help clear up the chain of command so the people that need to report results, can do so.
But what I like to do is a hybrid of an accountability chart and organization. Every single position in the company is accountable for something.
For example, a lead tech is accountable for properly placing the equipment, maintaining the equipment, tracking it, and the like.
A CFO is accountable for the budgeting and a CEO is accountable to make sure that we have a vision that we know where we're going and that what we're doing is working to continue to grow.
So if you don't have that accountability chart and organization, then everybody's just doing whatever they want and you will likely really struggle.
You're not going to have a lot of structure and it's going to be frustrating, especially as you grow beyond that 1.0 to $1.5 million dollar range, these things really start to show up.
When you're doing an accountability chart, we're talking about the right people in the right seats. When you do it right, the result will fall into place. Everyone is enthused and focused.
We see very smart and capable companies and teams spin their wheels mindlessly.
It’s because a lot of times people are in the wrong position and they are actually feeling set up for failure.
So when you have an accountability chart you can look at, and ask yourself if this person you’re hiring checks all those boxes.
Is that something that this person can do?
In the hiring process, you go over that accountability chart with someone asking “, are these things you feel like you're capable of with my support, with my training if we show you how that works? “
If someone will say yes, then you now have an agreement.
Major companies (and some smaller companies) are structured this way. These are all things YOU can learn.
This is a system.
Systems create consistency and calm, even in the disaster industry.
This one is IMPORTANT..
A leader's job is to make sure that everyone's rowing in the same direction. Everyone has the same mission.
Companies have a really bad time allowing some people to advocate for themselves.
They are doing something else and not what they need to be doing.
Or they're doing what they would like to do more.
If you're really too busy with your business, you're probably going to miss these details or catch them too late.
You need to keep your eyes open and direct the team.
You need a comeback plan. How do you get everyone back IN ALIGNMENT?
I get with my team and I have a session that I call an alignment tune-up. It's where I get everyone together in a conference room or away somewhere and just check our system to make sure that we're structured and we're all aligned.
If you are the leader of the company, it's probably going to be on you to witness when it's not put together. You may delegate the solutions to other people, but ultimately you are the one that is going to be doing the performance evaluation and making adjustments to process and procedures that ensure a consistent customer experience.
Any good leader wants to have a structured company enough to where you have stuff you can see and measure.
Consistent Leads Process
A really good structured company has got to be a sales and marketing company. I like to call this the consistent leads process.
As the leader of the company, it is your job to ensure that you're feeding the whole family. You're feeding the group, the whole tribe.
It's your job to make sure that as a hunter, you still get everything. That is... until you have a proven process that can be trained to someone accountable for sales & marketing. If you don't have consistent leads, it won’t necessarily show itself until you get slow unless you have a scorecard process by which you are tracking performance. People don't get as many hours as they need to. People start looking for something trying to make up for it.
That’s why you really need to have a structured marketing role in your company. Many companies across the country are not staying busy consistently because they're not doing marketing well … some aren’t doing it at all. As a result, their community doesn't know they exist.
If you can build a strong marketing role, you’ll likely become the leader in the market as you market all the time… something that professional restorers do well. People will hear and see about your company everywhere they go.
One thing to remember when building a role for marketing is that just because people say how great they are, it doesn't make them great. Some of the greatest companies in the industry that do good work, don't tell anybody how good they are. A professional restoration company knows how to find that balance.
Be the company that does great work, put that on autopilot, and market it. Your community needs that good work. And they need to know that YOU are the one to call.
Job stability is very important for getting good & consistent applicants. Good marketing provides lead volume. Good lead volume produces more work naturally, but it provides the opportunity to choose the best work for your company (more on that in the next section - The Right Kind of Leads). It should be good jobs, not just any jobs. Profitable work with customers that love what you do.
Tradespeople will see that if you've got stability, where you actually are getting busier and better. There's a place for them to grow, a place for them to be promoted in a particular company or organization.
The Right Kind of Leads
The last one is the right kind of leads.
When you're trying to market, it's really easy to go out and do sales and increase revenue, to go out and hire and find customers that are not your avatar. Avatar is the term used to mean your ideal client.
Build yourself up. Have a structured company where you know who your ideal client is, you know where they are, where they shop, what you need to say to attract them, and what you need to do to have them say how great you are. That's what you need to figure out.
Another good structured company tenet is meaningful meetings.
In my career I’ve come across a lot of companies that have a lot of meetings. They aren't all good meetings and they aren't all needed. In fact, they're a real waste of time and energy and they do more harm than good.
I believe in meetings. But only meaningful meetings. Get very clear and specific before starting a meeting.
Who needs to attend the meetings? Maybe not everyone is required to be there.
What is this meeting all about?
Is this a training session?
When is the best time to have these meetings?
How long will the meeting be?
And what are the objectives?
A good meaningful meeting can really set you apart as a company. And that's not only with everyone, but individual divisions, the water division, the fire division, and the office staff should be having meaningful meetings that don't include everyone.
You don't bring everybody in to talk about the POS system, or how we answer the phone. The only people that need to be in those meetings are the people who are accountable for that particular process.
Contracts and Sub-Agreements
A good structured company is really strong in the areas of its contracts and their sub-agreements.
You might be surprised to find out that your state may require contracts versus work authorizations.
Make sure you know the laws of your state, and have a really binding agreement that will hold up in court should you need to stand your ground.
Everyone on the team needs to be clear that we need a contract to protect the customer and protect our company. It's for both.
Perhaps you need to consider employee contracts. You may have never even heard of such a thing.
For example: I'm going to pay you $$$ monetarily, as well as [ABC] benefits. And maybe there's a bonus in return for this employee contract.
This could also be tied in with their handbooks. I'm going to do these things if you do these things. This is an agreement between you and your employee.
You need employee agreements.
If anyone is doing work as a subcontractor in your company, please invest in getting subcontracts, and knowing how to work and operate them, have them well written with promises that the subcontractor will do these things per this scope for you. And then you will, in turn, do this.
They also need to be up to date. You need to get a certificate of insurance for your employees or for your subcontractors. But it’ll also help your payables.
You're not paying them for something work they didn't do. There's no discretion around it.
However, when you get unhappy vendors, it hurts your company. When you have happy vendors and subcontractors, you have happy customers because they will show up when you need them to.
But when you do not have a good system with subcontractors in your company, you are risking your response times, and your ability to complete the jobs like you maybe promised you would. Eventually, you'll run out of subcontractors to work with and you’ll also have to keep a good reputation in the market you’ve chosen. And I know you don’t want that.
In addition, you need to have good security. Again, by having contracts and sub-agreements in place, your staff and your company are going to thrive. It feels safe.
However, if you have a new set of subcontractors and they start really bad, maybe they don't do really well with the agreements or maybe they're great in the field, but awful in the office, will you need some security to protect your company, your staff, and the financial well-being of your company?
If you've got any subcontractor who doesn't want to enter into an agreement with you, keep looking for some who do because the best ones probably would not be happy working with you without them.
If you have any questions about that, you can reach out to us at restoration advisors. We do it all the time.
Lastly, a structured restoration company, any disaster company, the professional ones, the 8% are profitable.
I can't tell you how many people I talked to in a month or in a year who love to tell me how much revenue they're making. How much they collected. I've invoiced 5 million, and I've got 4.2 million of it. It's great. Those are great starting numbers and that means you're doing something right.
But how much are you profiting?
How much do you keep taking a lot more than just selling to be profitable for the company?
The companies structured to what I call rich on Friday and poor on Monday, they're just swapping hands in restoration. The single digits, 15% not really enough to grow.
I love 25% net after everything's paid.
You need that profit. That's how you have a secure company that's structured well so that no one has to worry about their check not bouncing. You aren’t the bank for the insurance company.
When you have low profits, more sales don't help.
You won't have the money in your reserve that you need to fund your next two or three jobs.
You don't have any extra and you're probably not charging enough. Your overhead is likely too high. It's one of the two or both. And it's going to hurt.
When you do have an opportunity to do a bigger job with more revenue, and more profit potential, where the number of jobs increases, you're going to be borrowing if you have that ability for a line of credit.
You're borrowing money to do more work, but you're going to be waiting to pay that loan back. You're not going to get paid for that unless you're doing cash work. Then you're probably lowering your margins anyway.
You've got to be profitable in every single job that you do. But you have to try to make it to where you only do the job. Otherwise, walk away.
Set your thresholds, and commit to the following statement, “If I can't make [$$$], it's a job we don't do.”
It doesn't cost you money if you don't do that job. It costs you if you do it and don't get paid for it, then you're out of cash. After that, you're waiting for somebody else to pay you. We all know where that goes.
A company that has a strict and tight structure will always weather the storm and grow faster than one without.
A team that knows where to go will always get there faster.
If you are an owner, you have to get out of the weeds of running the day to day of your company and work on being a professional firm.
Reach out to us in the form below and let’s take the industry back one company at a time. Let us know how we can help you structure your company so that you can have greater impact on your company resulting in greater impact on your family and your community!
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