A contractor named Billy Bob has been in business for himself for about 10 years after he quit on his old boss, convinced that he could do it better himself. The firm has done well, billing about $1 million a year. Billy Bob has bought himself a Harley and a bass boat with the profits.
One Tuesday morning, he gets in to the office around 6:30, turns on the coffee and gets ready for the day. By 9:00, he notices that the bookkeeper, Hillary, hasn't shown up for work. Hillary always shows up for work, as regular as the sunrise. Billy Bob asks the dispatcher if she has a phone number for Hillary, but the cell phone number that they have for her is not in service. The home phone number has been disconnected.
Increasingly alarmed, Billy Bob drives to the address they have on file for Hillary. Not only does Hillary not live there, she has never lived there, the occupant tells him.
Back at the office, Billy Bob discovers that Hillary's desk is locked. He pops the lock and the drawer is filled with letters from the IRS. It seems that Hillary has not been sending in the 941s. There's a letter in the drawer from the IRS stating that they are coming to the office to see Billy Bob that day to talk about the $42,000 he owes! On top of that, upon calling his bank, a panicked Billy Bob finds out the company's line of credit has been maxed.
Billy Bob has nothing — nothing but the business he's spent 10 years growing. The business is the only thing that will get him out of this jam. How does he do it? That's the exercise that members of the Service Roundtable threw themselves into at their Las Vegas Roundtable.
I had the privilege of attending the Service Roundtable's Las Vegas Roundtable and even got to speak for a few minutes about new plumbing products and markets. I was extremely impressed by the quality of the contractors I met there.
The Service Roundtable is a best practices organization founded by a collaboration of leading contractors to share information and help other contractors improve their sales, marketing, operations and profitability. CEO (and CONTRACTOR columnist) Matt Michel and COO David Heimer, who both have deep and long-lasting ties to the industry, run the Service Roundtable. Completely internet-based, it's complementary to other affinity and best practices groups.
A case study of how to turn around a floundering business was right up the members' alley. The contractors in the Service Roundtable are all self-improvement junkies, catholic in their efforts — Contractors 2000/Nexstar, Plumbers Success International/Airtime 5000, Air Conditioning Contractors of America, Plumbing-Heating-Cooling Contractors, Quality Services Contractors, mix groups both formal and informal, they've dabbled in them all. "Buy Michael Gerber's book, 'The E-Myth'," one Service Roundtable member says to another. "It'll change your life." Contractors all over the country have good ideas, so why reinvent the wheel?
The contractors schooled Billy Bob on creating a vision statement, such as, "We create customers for life." That vision has to be converted into a 10-year business plan. Billy Bob and his managers need to start with a one-year business plan first, and then move to a five-year plan. They need to figure out how to fix the missteps and do more of all the things that worked correctly.
Service Roundtable contractors covered topics such as weekly training, lists and procedures, lead tracking, recruiting, human resources, establishing goals for average service calls and average tickets, cash flow projections, dealing with rebellious service techs, handling problems created by rapid growth, branding, customer retention, and marketing and advertising.
The contractors split up into tables of six to 10, hashed out the issues, and gave Billy Bob their recommendations.
The goal is to achieve 20% net profit to create a stable company for both customers and employees.
In the end, Billy Bob had transitioned to William Robert, the company was back on track and generating enough money to pay off that tax liability. The Service Roundtable had helped one of its own recover, something that these unselfish contractors do as a matter of course every day.