Grow or Die
By Matt MichelIf you are not growing, you are either stagnating or dying. Here are nine reasons you should grow your business.
Based on an informal poll of contractors attending a number of trade shows, roughly four out of 10 do not want to grow. Curious. If you are not growing, you are either stagnating or dying. Here are nine reasons you should grow your business.
1. Grow to reduce personal risk.
Can your company survive if something happens to you?
Even if you think you will lead a charmed, accident-free life, scale still offers a form of insurance. If you get dinged in a lawsuit, fined by the government, or victimized by theft, attaining a certain size will give you the ability to withstand the hit.
Grow … or risk everything.
2. Grow to do what you want.
When you wear all of the hats, you do all of the tasks. This includes the tasks you hate. It includes the task you do poorly. When your company grows you can hire someone to do (most of) the distasteful tasks while you concentrate on the things you like, where you excel.
Grow … and focus on what you want.
3. Grow for better pay.
If you want to make more money, grow a bigger business. Many single truck operators claim they make more money without a payroll than with one, but that’s because they carry little overhead as a sole proprietor and fail to raise prices to cover the added overhead of a growing business. Since overhead tends to grow in a stepwise—not linear—fashion, overhead as a percent of sales tends to fall with growth, while profitability rises.
Grow … and make more money.
Matt Michel is the CEO of the Service Roundtable, the largest business alliance in the plumbing, heating, and cooling industry. You can reach Matt by email at matt.michel@serviceroundtable.com, toll-free at 877-262-3341, or follow him on Twitter as ComancheMktg.
“Stop being hostage to your labor force.”
4. Grow to create an exit strategy.
Size gives you exit options. For a small contractor, the only exit is usually insolvency. Close it up and walk away. At best, you can pray someone will buy your customer list. Larger companies, on the other hand, are attractive to employees who may want to buy you out and to third parties who will pay multiples based on profitability.
Grow … and profit from a lifetime spent building a business.
5. Grow to weather employment losses.
When a tech quits a three-truck company in the middle of the busy season, it’s a catastrophe. When a tech leaves a 20-truck business, there’s usually one or more apprentices waiting for just such an opportunity.
Grow … and stop being hostage to your labor force.
6. Grow to survive a hostile regulatory environment.
For the first time in decades, federal regulations are being curtailed. State and local regulations, however, are not. Each new regulatory burden placed on a business sucks profit from the company.
The smallest contractors ignore the regulations and try to skate under the law. The largest absorb the cost of compliance with existing staff and spread additional costs over greater sales. The rest get squeezed.
Grow … and survive.
7. Grow to have more fun.
Running a larger company is more fun. Sure, the responsibilities are greater, but so are the opportunities. The manager of a larger company has more options, including the option to work on charities, take long vacations, and so on.
Grow … and have more fun.
8. Grow to maintain a positive personal outlook.
People running businesses that are growing live lives of abundance. Those trying to save their way to prosperity exist in a world of scarcity. Positive, optimistic, can-do people abound in the world of abundance where the future is bright.
Grow … and live in a world of abundance.
9. Grow because it is natural.
Every living thing on this planet grows.
Growth is what people are supposed to do. Growth is what businesses are supposed to do. It is in our nature. It is not in our nature to stagnate.
Grow … or die.
“Growth is what businesses are supposed to do. It is in our nature.”
Get Help
There has never been a better time to grow your HVAC business than now. The economy is strong. Economy growth is projected to be the highest in more than a decade. Accordingly, consumer optimism is strong. People are buying houses and investing in them.
There has also never been the wide array of support for contractors. Manufacturer programs have improved. Local trade associations are on the move. National contractor alliances offer more support options than ever before. Any contractor who wants help, advice, and guidance can get it.
Grow … or die.
For more information on the PHC industry’s most affordable business support organization, check out www.ServiceRoundtable.com or call 877-262-3341 and ask for a tour behind the firewall so you can see what your competitors are enjoying.
