You say that I'm not supposed to handle day-to-day stuff around the office or on the jobsites, but if I didn't do that, what would I do all day?
Good question. If you're letting Elmer run the backhoe, what are you going to be doing?
Managing a business really means developing a set of skills that most contractors had no need to develop until they found themselves forced into a management position once their business hit a few hundred thousand or more. And no matter how outstanding your contracting skills are, they're a world apart from the skills needed to run a company. It's not a matter of intelligence or effort, the skills are just different. But they're entirely learnable.
The stand-alone owner focuses on strategic things such as revenue, overall operations, financial and manpower planning, performance tracking, productivity enhancement and marketing strategies that'll keep the business moving forward.
Your role shift will be like moving from the engine room of the ship to the bridge. Your job is to plot the course, steer the ship and make sure the crew, systems and equipment are ready to get you from point A to point B. You can always find a new crewman to handle the engine room properly, but the ship won't get far without a captain. When you think of it that way, being the owner feels a lot more fun and a lot more important than answering a million small questions every day.
As the captain of your ship, your job is to define where you want your business to be in a year, three years and ten years. What's the best way to get there? Do more residential work? Expand to commercial? Add locations? Acquire a competitor? Offer tonnage work or specialty stuff? Once you establish your targets, you decide what equipment, people, investments and systems will be needed to get there.
Another key role is watching to ensure you're making progress toward your destination. That means ensuring you have a complete understanding of how your business works (and many contractors fool themselves about this). Make sure you have extremely accurate, up-to-the-minute data to compare to your targets and a process for identifying deviations from the target and taking corrective action. Think of this as your GPS system.
An owner is constantly looking for new ways to improve productivity and profitability. This includes finding new, improved and smarter software; developing heavier training for employees; reducing turnover; and understanding all the components of profit and expense. You can't do any of these things seriously until you've off-loaded your day-to-day tasks, but you'll have no problem keeping busy once you do this.
I've described a lot of things, and as I said earlier, many of the skills required simply aren't in a contractor's toolbox. What's important is that you start thinking like a captain instead of a crewman. Until you start looking at the horizon, knowing how to read a compass doesn't matter.
How to Keep Your Business Moving Forward
- Define where you want your business to be in the future, and then determine the best way to accomplish this.
- Continue monitoring your progress by using accurate, up-to-the-minute data.
- Constantly look for new ways to improve productivity and profitability.
- Maintain a focus on strategic areas such as revenue, overall operations, financial and manpower planning, performance tracking, productivity enhancement and marketing strategies.
Construction Business Owner, March 2010