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One of the easiest ways to succeed in any industry is to follow the examples provided by the successful businessmen who have blazed a trail ahead of you. Belgard Master Craftsman Roger Van Alst successfully manages five central California locations for his company, Black Diamond Paver Stones & Landscape, Inc. President of his local ICPI chapter, Roger's business model was crafted around the operational systems of the various successful companies that he worked for prior to buying Black Diamond, and he offers some words of advice for hardscape contractors who are looking to take their businesses to the multi-crew level.
The first key to success in growing your business beyond a couple of crews is to standardize pricing and payment systems. Although it will be tempting to bill by the hour, it will be easier to ensure consistent margins by billing per square foot or by creating a task-pay system of billing by the type of job. Be sure to factor in variables like difficult access and geotextile needs. If organized properly, you will consistently earn an average 30% gross profit with net profit margins of 10-15%. You will also need a system for tracking the multiple crews, which can be as simple as a system of work orders. Each work order should indicate exactly what the crew will be paid on the job, and they should finish one job before starting the next.
Subcontractors should be in charge of their own equipment and make sure that everything is in working order. Blades should be kept sharp; motors should be in good shape. But for both quality control and safety reasons, take a proactive approach to OSHA compliance and protect your crews from themselves. Workers won't always be concerned with how their lungs will look 20 years from now. Hire an inspector who can travel from jobsite to jobsite to make sure that the proper safety and quality protocols are followed.
The two most important elements are referrals and training programs. The most reliable resource for finding new workers are referrals from competent members of your current crew. However, in this time of economic recovery, qualified crew members may be hard to find. Be prepared to advertise opportunities and train internally. Recruitment should be a constant ongoing activity.
The Importance of Delegation:
Once you hit critical mass of billing $4-6 million annually, you cannot survive unless you delegate, delegate, delegate. Anyone billing over $1 million who is still doing his own bookkeeping is making a mistake. Delegate operations and focus on training, growth, and development.
The Importance of Marketing
Although referrals play a primary role, you cannot consistently grow your business without proactively attracting new customers through an organized marketing effort. You have to continually get the word out that you exist. Having your name regularly presented in the marketplace will also lend credibility to your business. If you want to build your business beyond $1 million, be prepared to spend at least 5% of your gross revenue on marketing and advertising, and build the marketing costs into your overall budget.
Look for opportunities to build relationships with local dealers, builders, and industry professionals who can be a long-term referral source. Also align yourself with quality brands, like Belgard, who can help lend credibility to your business and provide you with additional growth opportunities and support. Take advantage of the business-building programs that Belgard has to offer to help stretch your training, operations, and marketing dollars.