Adventures with Lyrical: Buying a Business (REPOST)

OneofOne_sl said:

You keep going off on tangents about needing new equipment and more guys, and how you're going to blow up with business soon, all the while making no apparent progress on another estimator which you need (it sounds like) for any of the other issues to even matter.

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I've made quite a few changes in April.

I am on point with the issue (being slammed by customers). I just said I reinvested 35k in equipment (and improvements), hired two more guys so we can do $1,500 more a week, changed workflow for better efficiency and delegated alot of the Estimator's responsibilities to other guys. And I said I've started making calls and talking to potential Estimators. Stealing a guy is something I do slowly. I'm going to make sure we have a pretty good fit before I get him to leave another place. I have a guy who I have in mind right now, but he's not 100% sure he wants to do estimates. If you estimate wrong, you don't hear it from me, you hear it from the guys on the crew. They have to work harder, and they'll ride a guy pretty hard for a mistake. It's a thankless job (except that you make more than the laborers). If the conversation gets that far, I'll offer him $300-400 more a week (or about 1,200 to 1,600 more a month) to come work for me. The company he's at is ridiculously low in pay, and I can beat them easy.

I've stayed away from hiring agencies, because for the most part, my employees are always the best source for hiring other employees. Usually, when they are referred by a current employee, the wash out rate isn't as high.

Corndog_sl said:

He's just addressing the problem in a different way. By making the company more efficient. He can make up some of those lost calls each week. It's never bad to improve efficiency.

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You are 100% correct in your assessment of what I'm doing.

As I've said, by being more efficient, I can clear up time for the Estimator. For instance, I had a specially made trailer for a piece of equipment for one of my guys who works on his own (his job is separate from the crews'). I paid $3,100 for it. Currently, every time he drives the piece of equipment off, or puts it back on, he loses ten to fifteen minutes making sure it is chained down correctly at different access points. If it's not chained down correctly, it goes flying, kills someone, and I get sued for a million bucks. Anyway, ten to fifteen minutes savings a day doesn't sound like much, but it saves him 1.5 to two hours a day. For the special made trailer, it pops on with just a "click" and that's it, and there is less of a chance of the machine going flying off of the trailer and hitting someone.

The Estimator used to spend probably a day a week doing customer service and quality check ups. But since I'm saving two hours a day for this laborer, that adds up to a free day for him. This laborer (who has been here ten years and knows his shit about the ops) has taken on the customer service and quality check ups, as well as for hose breaks, the guys needing oil, or a piece of equipment needs to be taken into be repaired.

So I free up time for the Estimator by making someone else more efficient, and by using the time savings.It's like having two Estimators one day a week, for no extra pay.The $3,100 investment will pay itself off soon. And in general, being more efficient is good. We just bid a commercial job for 80k, and if we get it, the bottleneck would be the laborers, and dare I say it, the equipment.

Corndog_sl said:

The more Lyrical speaks, the more I would just go slap 100,000 infront of his biggest competitors estimator.

If it's that hard to get a new estimator, why not just eliminate your competition by buying theirs basically? If estimators are so hard to come by, just cripple your competition.

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Because in most companies, the owner doesn't trust anyone else to do his estimates, so the owner is his own sole Estimator. This is for fear of them being inaccurate, or them stealing sidejobs. Some Estimators have been known for bidding against the company they are with, and either doing the jobs themselves or selling them to other companies. So, in 95% of the companies, the owner does the bidding, and everyone else works, and God help them if the owner gets sick and can't run bids. In five years, I've seen two companies that had Estimators, and neither of them were worth a damn. One guy had an recent arrest record for domestic abuse and drugs. The other guy had an attitude problem and thought he was better than everyone else. He smashed a customer's roof open on a job, and when the Crew Leader warned him he was doing it wrong, he stormed off when asked about it. I guess he ran the company he was at, and couldn't handled not being the Manager, Lead Estimator or Crew Leader.

Like I said, if the guy I'm talking to interviews well, based on him working with my Manager in the past at other companies, I'll offer him $1,500 more a month to leave where he is at.

You guys can end the cutting of flesh over who I hire, I'm running estimates now. I've spent the last few weeks trying to get someone even close, and they just aren't there. The guys showed poor work habits and I canned them (as in no-call/no-shows).

I have one of my guys who is really good technically (but not so good with customers) shadowing me. He makes sure my prices are accurate, and I sell the customers. We work well as a team. I hired an unskilled guy to do all of the unskilled things, and it's freed up the best guys. Productivity has gone up over the last 30 days, from redirecting workflow, assigning new responsibilities and hiring more guys. We've gone from $2,500 a day to 4,000 a day in service fees. The goal is to get the magical level of 5k a day in service fees.

It's amazing, I come in, and all of the sudden sales shoot up (we've picked up $10k in the last day and a half). No one cares more than the owner.

I'm sitting here reading that the industry average is that the Estimator is paid 10% of all the jobs he gets. I'll pay myself that. And I'm better at closing than anyone in my company, I've been in sales for 15 years. I'm having to get my hands dirty, the days are long (7am to 8 pm), but somehow, it's better for me to be even closer. I might not be the best guy technically, but as I learned in Ops class, it's more about understanding work and cash flow through your business. These guys are great technically, but they don't understand what order, and how they do the job affects profits.

I've done all of the demand side planning I need to do right now, we need to work on sales. Last week was a record non-emergency week for us as far as customer calls at 77. At an average close amount of $762 per job that is some cheddar.

We are tracking to do almost $40k in profits this month, and I know we can do more. I'm expecting that we can do $55k in profits next month, based on seasonality and the number of incoming calls. The calls keep increasing, we've had 36 calls in the last 1.5 days, compared to 77 last week. Customers are saying they see us everywhere. I ran bids yesterday, and they said they saw our billboards, saw us on the news, saw us in the paper, the yellow pages and the Internet.

I'll be around a lot less, working my ass off. I'd worked to be to the point where I could be in the office more (planning and playing MMO's if I wanted at my leisure), but this is what I'm doing for now. I'll still have two days a week of office time.

I worked from 7am to 10 pm yesterday, but we got a combined $30k in signups in 48 hours. I'm taking an office day to day.

opiate82_sl said:

Every once in awhile, stepping in is necessary. Happens to me about every 5 years or so. I always have to remind myself that it is easy to get caught up in the short-term improvements that happen to the business when I step in. I am pretty much always going to be able to do the job of managing the restaurant better than my actual managers, but that is why I am the boss. I always have to remind myself that my overall goal when stepping in is just to right the ship and to get the hired help back up to an acceptable performance level.

The real money is made when I'm working on my business, not in it.

(Not that you don't already know this)

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I've been planning for so long, that it's good to get my hands dirty again. And it was our most profitable week in years. I've planned things out for a year now, it's time to stop planning and start implementing.

It's amazing how productive we are right now. We brought in $43k in approved service fees, our best week in two years. We had 131 calls (another record) and are now backlogged until July (with 100k in service fees). At this rate, I'll need to add another crew. I'm thinking that running on TV is a pot of gold, if you can afford it. Eighteen commercials a week at a targeted audience has increased calls 300% over last year.

We were all high fiving each other until we got a call that one of our newbies got near a live powerline and burned three of his fingers . That ended the celebration pretty damned quick.

Corndog_sl said:

So doubling back then. Is it all about the time slot on Tv then? Cause you had a morning spot that wasnt working well?

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Radio is what didn't do well. I was on a local talk station 190 times a week, and we literally got ten calls from it in five months.

TV has always done well for us. Since I started in the 5 am and 6am slots, 20% of my calls for estimates came from TV. I've since expanded to 6pm. The later you go, the more expensive it is (because of higher viewership).

A few months later, my calls from TV have gone down as a % of total, yet total calls are up 300% from last year. We've been on enough (two times a timeslot) that people have gained an awareness of us. Pretty much 75% of the customers we talk to say they see us on TV.

TV is hard to track, especially after you've been on awhile. After a long campaign, the only thing you can check is total call volume. A year ago at this time, we would have had 40-45 calls a week, this last week was 131. In the previous weeks, it was 83 and 77. And this is great, I'm winning bids where I am more expensive because I have a brand and the other guy doesn't. This last week, we won a bid for 7k (the competitor bid it for 5k) and another for 8k (the competitor bid it for 6k). Between selling value and having billboards and TV, I'm able to win bids while charging more. On both of those jobs, I could have charged less, but since they were a major PITA, I wanted more.

Lyrical_sl said:

This is what I woke up to today. The guys were working on a job for a wealthy family. Their security gate shut on my truck, and the safety sensors didn't work.

And they are expecting me to pay for it, when the gate malfunctioned. We had the original company that installed the gate determine this. Ugh.

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The customers are being absolute dicks. We had an agreement worked out where we were going to let the insurance companies argue it out (and finish the contract). They since sent me a letter telling me to suck it, they wanted me to pay it all, and are refusing to pay for the work done, or let us finish the contract.

So I filed a lawsuit against them last week.

I imagine they'll settle. They have money, and work for two large corporations. Losing a lawsuit would mean that their credit would be trashed. Most professionals don't want their credit trashed. A few years ago, I was involved in a non-profit, and there was a $50 charge that showed past due against me. I was the one that signed the form as an Officer of the non-profit, so the company came after me. Long story short, until I got it fixed, my credit score was 640ish. I lost 100 points over a $50 past due bill. What will several thousands do to their credit?

We'd agreed to let the insurance companies argue who was responsible, and continue to do business. Why they sent me a letter reversing this, I don't know. But now a judge will decide between us.

Cad_sl said:

I'm a lawyer, even small claims cases are done in front of juries, if either party requests it (which they nearly always do.) Virtually all civil cases are heard by juries. Civil vs. criminal has nothing to do with it.

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The last time I sued someone for non-payment, there was just a judge. That was five years ago, and it was in a small country town (if that matters). There was no jury. And I won.

This is in a much bigger and affluent area. I'm not sure if that impacts it.