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| Subject - Replace your self in business | |
| John A. Peters |
As adults, we continue to grow up and mature. We are constantly learning. Maybe even more importantly we are constantly training others. The apprentice is trained by the journeyman. The journeyman is trained by the foreman, the foreman is trained by the estimator and the estimator is trained by the owner of the business. Of course every step of the way is augmented with reading, studying, or school. Eventually you start to think about retirement, or at least a long vacation. Let me ask you: As the sole owner of business what do you do then? The business authorities I talked to said there are two or three paths you can follow. 1) Try to sell the business. Good luck if it's a sole proprietorship and the owner is the key man. This kind of business does not have much value to someone else. 2) Let the business run down and gradually drain the business resources, stop advertising, lower the level of stock, don't replace things that wear out, sell what you can for a little bit of money 3) Build up the business enough so that an outside investor would see some value in the business, its customer list and its goodwill. But there has to be an ongoing well documented system that can continue to smoothly function over the years. As far as I can tell, this 3rd business model needs to be of sufficient size to stand alone. Of course, a business with 27 service trucks, a service manager, double full page Yellow Page advertising, radio announcements and so on, can continue on while its owner goes on vacation. My business has only three electricians and one office person so how do I get from here to the point where the business is really worth something? 4) Is there may be a fourth option. Someone could be trained to take over the business and gradually buy out the ownership of business in a similar manner to that of a employee stock option program. The problem I see with an ESOP program is that it cost thousands of dollars to set up and maintain. I'm looking for any feedback I can get, please correct my mistakes. Thank you, John A. Peters, Owner, Brookline Electric Co. 415 239-5393 Office 415 509-3599 Cell http://home.pacbell.net/japeters/ is the web page I am building. |
| New Guy | Sounds like you have a real problem John, In your other posts, you mention that your too old to change your business practices to create something of real value. It was back in that esi thing. Looks like you have two choices. Groom an employee to take over the business and either have him buy you out or pay you a salary for a pre-determined length of time. Or you can do what one of my preious employers is going to do, and that is work as long as he can, then take everything he work all his life for and auction it off. See, he can't find anyone to buy his business because without him it is worthless. It might pay you in the long run to spend some effort building what you think you need as stated in a previous post. If it doesn't work out you can always go back to the old ways. Food for thought |
| John A. Peters | Let me correct the impression I gave on the other forum. I have -plenty- of time to change my business in a way that it can continue on with less in put by me. In fact I am the third owner of Brookline Electric. I have just now succeeded in booking two and a half weeks of work for my three electricians which will let me cut my hours back down to less than 40 hours a week. I am pulling out some time in the day to work on making things more efficient and productive. I may have previously written about the book The E-Myth revisited. It suggests that you fine tune your business after the model of a franchise. If a business can run like a franchise then it is valuable to some one else, who could take it over and continue to run it. A franchise emphasizes systems over persons. It is easier to hire another electrician than it is to buy another business. I am young enough to change. I like change. That is why I am learning from you here. The real problem/challenge I have is to implement the things I am reading about here. So let's move forward and try things, knowing that to fail is to learn. If we are not having any failures then we are not trying new things. JMHO |
| MONOLITH | quote: Very well said John. |
| New Guy | John, What are the problems you are having implementing the things you are reading about? You don't have to fail to learn, I live with the attitudes that if something doesn't work out it does not mean it is a failure at all. I have been moving forward with so many changes that it has redesigned my company almost completely. I encourage others to jump in and do the same. remember, there is no changes that can't be undone if you're not happy with it. I have been fortunate, that everything I have implemented has been very an asset. We have had to make adjustments, but that is to be expected. You seem you have researched this based on other posts on this site, so i encourage you to jump in. |
| John A. Peters | I see a problem as a small company trying to switch to having the electricians bid my jobs. Do you think I might have to give up my high end multi-day projects? My specialty is old houses. Two-thirds of my work is high end contracts for professionals who want to upgrade their old Victorian house or do a condo conversion. Working directly for the home owner we get paid promptly. Because these relatively lucrative jobs are usually multi-day jobs that last from one day to two weeks or longer, I am having trouble visualizing how to handle the scheduling. Of course if my company were the size of Mister Sparkly with twenty-seven trucks, scheduling would not be a problem. Also since Mister Sparkly concentrates on emergencies and service calls, it would not take very long before one of the twenty-seven trucks became available. Lets visualize if I were to switch to the business model where he each technician does his own estimate. Since we have only three trucks. When a new job came in, I would have to pull a man off of his contract or make the client wait for the next opening in the schedule before we could look at the job.. This does not sound like good customer service. Problem #1 If this "estimate" changed in to just a repair or a service call, then there would be a risk that there would not be a next customer ready, and he would be out of work for a while. Problem #2 If I had one of my men interrupt his current multi day contract, and go bid the job, this would delay the start of work that day. It would create another communication to the client to get an ok for a late start or else eventually the client will ask "Why is the job taking so long and why does my man start so late?" So my question is, how do you handle the scheduling when each man does his own estimate and you are a relatively small company, but you have large contracts? Switching away from general contractors and their bid peddling practices is a relative no brainier, but these jobs are not like that. They support me at the same level as if I were a working journeyman, but I don't have to do the tool belt work that I used to do before graduated to the management level. If I can get this figured out I can either grow my business or keep it the same size and take a vacation to Hawaii, and it will keep running. Thanks for hitting the keyboard. I know you have your own work to do. JP |
| New Guy | That is a great question, John. It is actually easier to schedule when you have the techs pricing their own jobs. We don't go out and give estimates. The tech goes to the customers home and prices out the job. If the customer gives him the ok then he goes forward with the work while he is there. Alot of our work is multiple day jobs as well. When a call comes in, if it is not an emergency, we schedule it the next available day. If it is an emergency we either break someone free or I take the call. This way I am not running all over always giving out bids to keep my men working. I can work on other facets of my businesses. If we schedule a job for lets say thursday and my tech isn't quite done on Wednesday, then we just call the customer and explain that our tech was given more work while he was at his last call and is running behind. We also offer an incentive for having to postpone them. It is usually not a problem. I also don't believe it gets any easier to schedule as you get bigger. You just need that many more calls. |
| John A. Peters | Hi New Man, :-) Thank you so very much for your clear and astute description of how dispatching and scheduling can be handled when the electricians to their own estimates as well as the work. How often do you run in two little gaps in your schedule? ____ I guess it's not much of a problem because you ask for a small fee as the appointment is made. I gather this small fee is taken on a credit card and it ensures that everyone agrees what the responsibilities are. I don't know if you call it a set up charge, a truck charge or an appointment fee or a diagnostic fee. Whenever it is called it does contract the relationship a bit. I now realize the client is more willing to pay a retainer fee by credit card because they get a commitment for an appointment from a well-trained company with a good reputation. I guess it works like this. The customer calls in on the telephone, (no one has automated this function yet by using a web page, when the customer can see the schedule by using a Web browser) and describes what is needed. The dispatcher uses a script to make sure the customer understands how things work and then the dispatcher looks on the calendar and figures out when the next electrician will be free to handle her job. When the job ahead of her job starts to wind down and closeout customer receives a phone call confirming that we are about ready to come over. The electrician goes in the job site along with his flat rate book and looks at what needs to be done. He then either sits down in the house or goes out to the truck (Is this optional?) and looks up the prices in the flat rate book and neatly writes them down by hand on a form. He shows the prices and descriptions to the customer along with the total price. He shows the flat rate book to the customer so that the customer will understand that these are prices everyone else pays. (As any one tried using a computer for this process, yet?) There will then be some discussion about whether or not the advantages of the maintenance agreement pay off. If the customer signs up either the work starts right away or perhaps the electrician lets the customer know he'll be back as soon as he finishes the rest of the job he's currently working on. So basically your scheduling things the same way we do now with our service calls. Right now we look on the calendar and assign the first open space, or negotiate a later date if that's what the customer wants. If the job runs long we communicate with the customer and reschedule things. As long as you have several jobs with tentative start dates already scheduled and secured by a retainer payment there should be no gaps. Am I right here? I'm also wondering how far out in to the future you typically get scheduled? _____ Currently our service calls are booked for the four days next week. Our larger jobs are booked for three weeks on one he electricians calendar and three and half weeks on the other, with room to start another job three weeks from now. I think I'm starting to get the hang of it now. My next step seems clear to me now. I need to find out about some tools to help me start training my electricians on how to do their own estimates, and manage customer expectations. |
| John A. Peters | quote: How did you find (or train) you techs to do the pricing? We have just started with a CD based tech training program, but it is a 52 week program, and I want to convert at least one man sooner than that. Any suggestions will be appreciated. I have a flat rate book but there is more to it than just having that. |