Over the years I’ve had the chance to mentor or give advice to younger contractors. Before giving that advice, I try to do some fact finding. I ask questions first and look for strengths and weaknesses.
Experience tells me that about 75% of these contractors are going to be weak with numbers. Understanding their financials is a challenge for them. I urge them to delegate the data input task and teach them reporting and how to understand their numbers. I remind them that a good accountant and a good bookkeeper are two different people. Who is going to do the books? How soon can it be delegated?
I encourage the contractors to surround themselves with good people: lawyer, accountant, bookkeeper, mentors, marketers, and other young business owners. They’re also encouraged to start or join a mastermind and/or referral group. Who will hold them accountable? Next, I mention that good online contractor software (CMS) is key. Used correctly, it’s a great tool to manage jobs without having to set foot on them daily. Who will input what data when?
Financials, systems, and structure are the biggest challenges when taking on clients. I only accept those who have been in business long enough to do 750k to 1.5m a year. They’re usually good at juggling a lot of balls in almost every aspect of their business. Also, they’re usually in a little bit of debt, struggling to break even, and have more demand than capacity to do it. Their home life is starting to suffer, and they are generally not happy. What they’re getting is not what they expected.
So, I tell them… Take chances, risk happens every day. Forgive yourself for your past. There is only one way to learn and that is to fail. Don’t fall in love with your first employees. They won’t be around long, especially if you’re growing an organization.
Together, we create an organizational chart, and then a dream organizational chart. Most clients will have hired people and designed job descriptions around the employees’ capabilities, instead of the other way around. They’re told to call them Project Manager (PM), Project Coordinator (PC), Foreman, etc. Next we work on a job description, KPIs, and strengths of that position; then we start to interview. Sometimes we’re lucky enough to already have the right people, they just need more guidance or a switch to a different position.
Also, we usually design a job flow system—from the time the phone rings with a new prospect to doing the job to collecting payments to sending a thank you card. Who does what when? What department handles it?
Lastly, I encourage my clients to ask for help from others who have been there, established contractors who love providing that help. I emphasize that the wheel does not have to be reinvented with every little task. I tell them to be honest and let their mentors know where they are struggling. Many of those mentors will freely give advice or even forward their documents, i.e. Safety Training Manual, Job Descriptions, etc.