Almost all first-time small business owners are guilty of something called the E-myth. The E-Myth (Entrepreneurial Myth) was a book written by Michael Gerber, first published in 1986 and later revised several times. The basic message of The E-Myth is that just because you were a great technician or employee does not mean you will be a great business owner.
This is so true about contracting. I have known good technicians—who can make a kitchen or bathroom remodel look stunning—proceed to fail after opening their own self-employed businesses. Owning and running a successful business is, in itself, a true profession. Hence, we have TV shows like “Shark Tank” and “The Profit.”
Most entrepreneurs simply do not know what to do and are too proud to ask for help (old me included). Things are always good at first. Overhead is low, you’re doing all the work with maybe one or two skilled or unskilled laborers. Work keeps coming in, you start taking chances, and you start running more than one job. Cash is coming in; bills and payroll are covered. You have money in the bank. Then, at some point, you hit a slow point, whether it be economic or seasonal. Or, all of a sudden, your accountant informs you that you owe a crap ton of taxes you were unaware of. You dip into a line of credit. You lose employees. You spend a ton of money out of pocket to fix a job that went south when you weren’t looking. You’re now working longer hours, swing a hammer all day, and do accounting and ordering late into the night. The spouse is asking what’s going on, you’re missing your kid’s ball games and school functions, and you are ignoring your health. All in the name of a better life for you and your family someday!
With the amount of interest you’re paying on your credit line, you could have hired a really good coach or mentor to help you navigate these struggles. They’ve been there and done that. They see your future and they can help you save money with better systems, financial budgeting, and best practices. Just as importantly, they can show you what not to do! My coaches have saved me money by pointing out risks which I hadn’t thought of. A good coach is also an accountability partner who can explain news that you don’t want to hear. Most of my clients have designed a job description around an employee’s capabilities when it should be the other way around. We hire with the employee coming in and agreeing to a job description that will be reviewed frequently. Of course, every job description can be a work in progress, with “minor” changes.
Whether it be general contracting or a trade like electrical, plumbing, hvac, cabinetry, etc., my goal is to help you create structure through job descriptions, organizational documents, flow charts, financials, roles and responsibilities, and meeting cadence. You will then manage the system, and the system will manage the employees. That frees you up for more time to work on your strengths, spend time with the family, or doing whatever makes you the happiest.