Editor's Blog


The Not-So-Sweet Spot

August 2, 2009
/ Print / Reprints /
ShareMore
/ Text Size+
Al figures out what a "Right-Size" company should be.

Frequently during my consulting work one-to-one with clients, and during the free 30-minute consulting calls I offer, I get asked the following question: “At what size company does this get easier?”

The answer is, “It depends!”

Not to be evasive, but the reality is you can be profitable at any size and be unprofitable at any size. It does depend on how well you run your business.

However, the ugly truth is you’re more vulnerable and have a bigger hill to climb when you’re a small company. Especially, if you’re a one-tech shop (that means the owner works while they try to run the business). If you get hurt, sick or worse, the business is done for. And the fact is you’re most likely to have to keep on working very hard till late in life because you’re the only income producer.

The next most vulnerable shops are where there are two to three techs working. The reason this type of shop is vulnerable is because if one of the techs quits, gets hurt or gets fired your sales can be cut by 33-50%. Plus, if you are in a trade that demands after-hours coverage, your techs tend to burn out because they’re pulling on-call shifts so frequently.

The other nasty truth is almost all of what it takes to operate a two- to three-tech shop can support a four- to five-tech shop. That’s because you already have overhead, such as a CSR to answer the phone, someone doing accounts receivable and accounts payable, possibly an office, phones, computers, software and a whole lot more. But the less techs there are out there making you money, the more profit is elusive.

So what is the right number?

Typically, life gets a whole lot better when you grow your company to a five- to seven-tech shop. I say that because then if you lose a tech you stand to lose as little as 15-20% of your sales – which hurts, but isn’t necessarily devastating. You have many more billable hours to cover your fixed overhead expenses like the ones I briefly covered above so there tends to be more profit.

And if you have highly visible trucks rolling (I’m talking rolling billboards here), you have a much more dominant position in the marketplace as they drive around your service area getting your name out in front of your target market.

How do you grow your company to this size?

Well, having worked with a lot of owners throughout the years I can tell you there are only two ways to grow your company. One is organically. That just means you are so much in demand and you’re such a great marketer that you have calls and all you need to do is add people. The second way is you acquire other existing companies and put them under your roof.

Master one of these two processes and you will be on the high road to “Having Less Stress and More Success”. Master them both and you’ll be unstoppable.

Give Me 60 Minutes And I'll Show You The Secrets To Running A Profitable Service Business ... Even During A Recession!

Al Levi is a consultant and a contributing editor to PM magazine and blogs for many other BNP trade magazines. He is presenting a free online video opportunity called the “60 Minute Recession Solution” Online Video Seminar.

For the first time ever, you’ll hear from him and just a few of the many contractors who have engaged the power of the Power! Programs. They’re happy to share how this dynamic program worked for them and how it is still working for them, especially in these tough economic times.

“This program has helped dozens of business owners I’ve worked with one-to-one,” Levi says. “The Power! Plans have also helped. But now thanks to new technology, I’ll be able to help many more contractors with my 12-month Power! Plan Coaching Program.” This program will include the building of your own customizable Operating Power! manual.

These programs have been working for him in his family business for years and in his clients’ businesses where they are now reaping the results. Click on the following link so you can see and hear for yourself: www.60MinuteRecessionSolution.com.
You must login or register in order to post a comment.

Multimedia

Videos

Image Galleries

The 2014 Experience Conference and Exhibition

A look in photos at the 2014 Experience Conference and Exhibition, which was held from April 24-26 at the Embassy Suites Convention Center and Spa in Frisco, Texas.

Podcasts

Don't underestimate the value of a good Internet marketing plan. In fact, if you do this right, it's not uncommon to see ROI along the lines of 30-to-1. Here's a look at 27 free and low-cost tips that you can begin implementing within your cleaning business today to drive more business.
More Podcasts

ICS Cleaning Specialist Magazine

CoverImage

2014 August

The August issue of ICS features stories on carpet mold, good training, marketing for cleaners, traffic lane cleaning, and cool products.

Table Of Contents Subscribe

Social Media

Social media is a good way to regularly keep in touch and interact with current clients and reach potential ones. What social mediums do you use in your cleaning/restoration business?
View Results Poll Archive

THE ICS STORE

Get Paid! book cover
Get Paid! (ebook)
Over 30 authors – over 40 articles…from attorneys, contractors, consultants, instructors and others, both inside and outside the restoration industry. R & R, C & R and Cleanfax, opened their archives and gave us the best they had, other chapters were created just for the “Get Paid!” book and its readers. And every one of them has ideas for how to get paid what you are owed.

More Products

ICS DIRECTORY AND BUYING GUIDE

Director_Buyer.jpgThe premier resource and reference guide for the cleaning and restoration industries.

Click here to view

TRUCKMOUNT EQUIPMENT AND ACCESSORIES GUIDE

Truckmount.jpgEquipment listings and specifications from the leading industry manufacturers.

Click here to view

STAY CONNECTED

facebook_40.png twitter_40px.png youtube_40px.pngcrc logo