How do you structure your business?

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Rawls007

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How do you make the transition from a small 3 or 4 man outfit that is micromanaged by the owner to a larger operation with a self sufficient management structure? Right now my crew depends on me for just about everything from providing materials, tools, and ladders, to instructions for how I want each job completed and even a ride to work in some cases. Not only am I the owner, but I'm the foreman, the worker, the material runner, the estimator, and the secretary. My stress levels are very high and I find myself missing out on oppurtunities for more work simply because I'm already stretched to the limit.

I know the first thing I need to do is put another van on the road and fully equip it. My plan is to let my current right hand man use the van and put him in charge of two or three guys. I'll have to give him means for puchasing material and gas. Meanwhile, I'll have more time to do what I need to do as far as the business goes, plus I can take another man under my wing and develop another "right hand man".

My fears are that by releasing the micromanagement of everything that goes on, nothing will get done right, material will be wasted or stolen, production will fall, profits will fall, and everything will just got to sh*t. I've learned over the years that you just can't really trust anybody. Everybody seems to depend on me for motivation and direction. Sometimes I'll leave the jobsite for just a few hours and come back to nothing being done the way I explained it the first time.What if I wind up going crazy trying to deal with everything that gets screwed up?

How do I develop I business plan where my guys have just as much interest in the success of the company as I do? Do I continue to pay my foreman by the hour or put him on some type of commission system that gives him the incentive to not only work hard but wisely and accurate. When I worked for companies that were on a commision system there always seemed to be a ton of strife and resentment. Hourly pay with bonus systems seems to work better. How do I develop a management system that works for me instead of me working for it?
 
rawls,

great questions...but too much to answer in a forum post...break them down in order of importance to you...
 
You have to start delegating. If your lead guy is ready you have to let him run with it.

If the administration is your "thing" you need to focus on that and train trustworthy people for the field work.

If the field work is your thing you will have to train trustworthy people to run the office.

You are only one man.



In my case, I was fortunate enough to take on a partner who was aces at the administration end, leaving me in charge of getting the work done. It was a perfect match and has allowed us to grow.
 
Go to the book store this afternoon and buy the book E-Myth it is in the business section. Start reading it tonight, it will change your life and your business.
 
This is the number one issue facing small businesses that want to get bigger. You need to system-ize your business. If you have systems, then anyone competent can carry out the tasks required.

The first successful advocate of this approach was a chap called Michael Gerber, who wrote a few books on the topic. i recommend you get one out your local library, and when reading it, ask yourself the question "does this sound like my business?" If it doesn't you wasted a couple of hours reading a book. If it does, it will change the way you see how to grow your business.

Note that systemization is not the same as deskilling.

As an example of a systemized business see this ad: this advert for a food sales business for sale in NZ, which makes a point of this virtue.

(I dont run a business at the moment, but have in the past)

Edited to say - thats twice I've been beaten to the punch today!!!!
 
My fears are that by releasing the micromanagement of everything that goes on, nothing will get done right, material will be wasted or stolen, production will fall, profits will fall, and everything will just got to sh*t. I've learned over the years that you just can't really trust anybody.
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That's your problem you have people you cannot "trust" fire them. Or it may be a situation where your "micromanagement" has trained them that if YOU are not there to tell them exactly how to do the job they wont make a move with out you. If your guys know what they are doing, give them an assignment of what needs to be done, a basic how to do it, and a expectation of how long to complete it, and walk away to take care of other things. If you have people working for you you must have a level of trust. I'm not saying give them blank checks, keys to your house or let them date your daughter. I don't know of any one that gives a crap about their job that the boss is constantly looking over their shoulder and picking every move for them to make.
 
ceb58 said:
That's your problem you have people you cannot "trust" fire them. Or it may be a situation where your "micromanagement" has trained them that if YOU are not there to tell them exactly how to do the job they wont make a move with out you. If your guys know what they are doing, give them an assignment of what needs to be done, a basic how to do it, and a expectation of how long to complete it, and walk away to take care of other things. If you have people working for you you must have a level of trust. I'm not saying give them blank checks, keys to your house or let them date your daughter. I don't know of any one that gives a crap about their job that the boss is constantly looking over their shoulder and picking every move for them to make.
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that was my first thought.if you can not trust your people and you think they will waste material or steal it you need new guys.everyone has their own way to get things done.might not be the exact way you would ,but it gets done.
 
ceb58 said:
That's your problem you have people you cannot "trust" fire them. Or it may be a situation where your "micromanagement" has trained them that if YOU are not there to tell them exactly how to do the job they wont make a move with out you. If your guys know what they are doing, give them an assignment of what needs to be done, a basic how to do it, and a expectation of how long to complete it, and walk away to take care of other things. If you have people working for you you must have a level of trust. I'm not saying give them blank checks, keys to your house or let them date your daughter. I don't know of any one that gives a crap about their job that the boss is constantly looking over their shoulder and picking every move for them to make.
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I definitely have to agree as well, the owner of the company I work for is around less and less every year. He has been down in Florida since January!

He has guys in the office that he trusts and he knows things are going to get done the way he needs them to be to make money.

Also there are guys in the field that are competent and trust worthy, and get the jobs done.

I am a service tech, and the owner of the company has no idea what I do on a daily basis. The service manager gives me work orders to complete and I do them. When I'm done I call in and get more work orders. He does all of the service dept. billing and all the owner sees is the money he makes, he doesn't concern himself so much with the day to day operations.

Same thing with the construction side, project managers take care of the admin. side of things and job foreman get the jobs done. The owner obviously "oversees" everything and keeps an eye on the numbers, but he is able to remain somewhat "hands off" because he trusts his guys.

Until you have people you can trust working for you, and you give up some of the control, you will not grow any larger than maybe a handful of employees.

JMSHO
 
bikeindy said:
Go to the book store this afternoon and buy the book E-Myth it is in the business section. Start reading it tonight, it will change your life and your business.
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Absolute best answer. If you do this you won't regret it, if you do not follow Bkeindy's advise later on when you do get around to reading it, you will.
 
I am not a micro manager I am just highly organized.We are in a transition phase of delagating more responsibility to the techs in the field.I put my tools away at the first of the year and started to focus on taking the business to the next level.We began around this time last year by slowly turning over basic job responsibilities over to the men.The goal is for me to be able to step out of the business for a month and it survive.
 
Just a late thought on this - when I said "systemize your business" I wasn't particularly clear on saying what that means. Most folks can guess what it means when applied to office and stockroom situations, but what about to the hands you hire to actually do the work? How do you systemize that?

The key to this is to knock the individuality out of the system. Every EC has his own way of working, and if you've got four ECs that you've picked up from other companies, chances are after a while you can look at an installation and say "this looks like Jims work" or whatever.

What you want the installation to look like is your company standard, so you cant tell which of your crew did it.

The way to achieve this is to have policies on what you do. So, for example, in a Resi, do you fit outlets ground up or down? Do you accept MWBCs? Backstabs or pigtails? What latitude for change of spec is acceptable without calling the office? All these are issues upon which you should have a policy, so you can take an EC off the street, and give him your policy sheets, and he can then do the work the company way.

You also point out that after being rude to customers, and being caught with his hand in the till, not following policy is the third reason that will get him terminated. Since you're enforcing, you obviously need to inspect from time to time...
 
dbuckley said:
Just a late thought on this - when I said "systemize your business" I wasn't particularly clear on saying what that means. Most folks can guess what it means when applied to office and stockroom situations, but what about to the hands you hire to actually do the work? How do you systemize that?

The key to this is to knock the individuality out of the system. Every EC has his own way of working, and if you've got four ECs that you've picked up from other companies, chances are after a while you can look at an installation and say "this looks like Jims work" or whatever.

What you want the installation to look like is your company standard, so you cant tell which of your crew did it.

The way to achieve this is to have policies on what you do. So, for example, in a Resi, do you fit outlets ground up or down? Do you accept MWBCs? Backstabs or pigtails? What latitude for change of spec is acceptable without calling the office? All these are issues upon which you should have a policy, so you can take an EC off the street, and give him your policy sheets, and he can then do the work the company way.

You also point out that after being rude to customers, and being caught with his hand in the till, not following policy is the third reason that will get him terminated. Since you're enforcing, you obviously need to inspect from time to time...
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I look at it as duplication,when you hire the goal should be to duplicate yourself.
 
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