Mark hasn’t been out to the desert lately. He hasn’t had a chance to clear out a Bass Pro Shop in a long time. Heck, Mark has barely been home. He knows it, and his family feels it too. He’s putting in 70 to 80 hour weeks to make his business succeed. It’s like he’s damned if he does, and damned if he doesn’t. Even when he is home hanging out with his kids, his mind is on his business.
The hope of “making it,” and having a business that can support itself as well his family and the lifestyle he wants to have, pushes him forward every day. Keeping his eye on the prize comes with its own adrenaline rush. It is its own addiction, and hope alone, drives him to get out of bed each day. But there has to be a more to it. There has to be a better way.
A successful business that operates smoothly and efficiently, because you made it that way, would be an awesome accomplishment. Allowing you to have time with your family, supporting you in the type of lifestyle of which you’d like to become accustomed to, and enjoying some of life’s small things like a cold beer with friends after a fun day of riding your dirt bike are the rewards for your hard work and commitment to success.
Along with the hard work, being a business owner can be a lot of fun. Each day arrives with a whole new set of challenges. It’s hard to put into place everything that you want to do in your business. Not only do you have to keep up on your troubleshooting skills, or your sheet metal bending skills, but you’re going to need to learn business skills. Not just marketing or human resources, but hard lessons that only you will discover in being a business owner.
I often hear, “They need to run it like a business,” and that is a concerning phrase. Considering that 50% of businesses fail within the first five years of business, it makes me think that running it like a business, means either into the ground, or until failure. It’s hard to know what circumstances lead to those business closures, but there are some strong takeaways that you can learn from to help you stave off failure, or keep you from achieving your goal.
Ready to turn your skill into a business? Here are some tips to help you start off on the right foot:
FROM BRETT NEAL, CPA:
Be intentional about your accounting. Bookkeeping and accounting are very tedious and repetitive. That’s why it’s important to get into a routine and make it a habit, that way it becomes automatic, like part of your mental checklist. BEAT the System with bookkeeping, education, accounting and training.
Implement the 3Rs of bookkeeping. Record your transactions into an accounting software, and use artificial intelligence (AI) to help you. Programs like Receipt Bank and Auto Entry allow you to take pictures of receipts with your phone, email invoices or drag and drop the info into a program that deciphers the info and adds it to your accounting software. Reconcile: It is important to match your info with outside sources like bank and credit card companies. Reconcile your books to outside statements, and you will find missing transactions or uncollected income. Review your performance. I don’t mean review your financial statements, I mean review your inputs to assure that you’re generating the correct output.
Work a framework to provide you with a plan and a process for completing the monthly routine, and getting the most out of it. Use the 4M Framework to keep it simple.
Money – This is all about compliance. You have to do the work to stay in compliance. This covers all statutory requirements like filing tax returns and business licenses, workers comp audits.
Metrics – This is the info that you use to gauge the path that you’ve set your business on.
Management – This is the formal review and long term planning of financial information. This is where you state your goals, and refine your plan to meet your objectives.
Maintenance – This is the upkeep and tedious work of having an accurate accounting. This is the day to day accounting, bookkeeping and record keeping that is required to make the system operate smoothly.
Pay yourself first, and create a reserve account. Set aside money based on profit to plan for taxes and seasonal slowdowns, based on percentages that are generated from your complete financial picture.
Anticipate your cash flow: Generate 30, 60 and 90 days cash projections to know how many days you can continue to operate with the cash on hand. Understand the potential affects of adding an employee during a slowdown. Adjust as necessary to maximize your cash on hand.
It’s easy to start an HVAC business. The hard part is building it into a sustainable profit producing machine. I’m talking about a machine that provides the owner with an owner’s lifestyle instead of a job that sucks the life out of them. Most HVAC businesses begin with a technician or installer who decides they are tired of working for someone else. They have earned the skills of repairing or replacing equipment effectively. These are the skills I thought I needed when I started my company in 2008, but building a successful business is an entirely different skillset.
Here is a list of 5 things I wish I would’ve learned before I began my HVAC business journey:
CHARGE WHAT YOU’RE WORTH: It’s not about replacing the capacitor or cleaning the flame sensor, it’s about knowing that the capacitor or flame sensor is the problem. It takes time to gain experience, charge for it. Charge enough to cover all expenses and then charge more so there’s money left over once all expenses are paid. That left-over money is why your business exists. Profit is not a bad word.
SALES/SERVICE PROCESS THAT CONVERTS: Every single home we go into has problems. We have to take the blinders off, find all problems, provide solutions and present them to the homeowner in a way that creates urgency to fix those problems. You must have a process for service and when new equipment is needed or requested, a solid presentation will close more sales and keep the company growing.
DUPLICATE YOURSELF THE BEST YOU CAN: Hire people who have values that align with yours. Give them the process, tools and training they need to succeed. Hold them accountable and let them do their jobs.
DELEGATE: You can’t do everything it takes to run a profitable growing company without the help of others. Every time you want to add something new to the business from processes to products, instead of saying how, think who. The lack of delegation is often a big problem that puts a strangle hold on the business. Stop getting in the way and delegate tasks to the right team members and the company will begin moving in the right direction. Instead of pushing the whole thing by yourself, you just have to steer.
COMMUNICATION: Communicate your vision to your team over and over and over again. Get excited!! It’s a better future you are building for them and for you. Show enthusiasm when you talk about where the business is headed, it’s contagious! For more support, sales, referrals and even more team members you got to get excited!