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Old 02-10-2011, 12:49 PM
Maco Services Maco Services is offline
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Join Date: May 2010
Location: Birmingham, Alabama
Posts: 229
Good read I agree, and honestly, didn't read the entire thing from page 1, but I disagree with some of what was originally posted, and it's really based on economic mentality, and that is the item of expanding with debt, rather than reinvested cash from operations. A few have touched on it, but it's all based on that.

If you have a single crew and can make money off that, and decide to save, to buy your next truck, or equipment, or shop, or whatever, you can be profitable with two trucks as ten or twenty in a scaleable fashion.

If you think good business equals the flexibility to finance, or lease 5 times more shop than you need, or become more flexible with employee pay or customer payments, you are giving away money. If you wouldn't do it on a single crew, why would you do it now? Convenience? Laziness.

It is a fact, your OH will change when you get larger. But a knowing your costs, keeping a regimented business model, and not venturing too far from that can be your biggest asset. Know your customer, and do the best job you can.

Pay employees what is the market equivalent to what you NEED, not what you want. Buy what you NEED, not what you want. Get rid if idle equipment, shop space, or employees that don't make you money. Help them out like they were family, but don't coddle or overpay for what you are getting. If they can add value at a higher pay rate elsewhere, let them. Don't get into a "chase the employee" scenario.
Don't be afraid to overprice a job if it's out of your expertise, or going to cost you excess money to do it. It's ok for a customer to say NO. But if they say yes, you invested direct labor in a job that made you money, and thats why we are in business.
If you want to do good for a community, volunteer, donate to charity, but don't do that through lazy running of a business or being satisfied with mediocre work (or for that matter, sitting on Lawnsite all day, like I'm doing). That brings another point, we all have things we do that aren't profitable. Identify those things and minimize the BS where ever possible.

This is certainly a more troublesome, time intensive, aggravating, and slow road for expansion, but I'd rather have a very profitable business 10 yrs from now than a bankrupt one in the next five years. This thread is a great reminder to not spiral into debt. That has been much easier to do in years past, but I think a lot of people will back away from that model due to credit contraction and margins of safety. If not, I'll be there to pick up the targeted accounts that they lose

Have a profitable day!If you don't often feel like this guy getting hammered, you should work harder to get more profitable.

John
 
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