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Yet Another Into-Scaling the Family Business

PinPointing

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Hey guys,

I've been reading the forum for a while, gained some great nuggets and wanted to introduce myself and tell you what I'm up to at the moment.

27 years old, and my family has a (location dependent) business services company. My mom started and runs the company. My dad has a job in another industry and is not involved.

My mom was the typical high performer in her field that felt she could start a business and do a better job. As the story goes she wasn't able to grow it beyond herself.

I went to school to study business and came back to work along side her. I don't necessarily have a passion for this particular line of work, but have a passion for building and growing a business and scaling it to a point where it can give me the funds for other projects or an exit for both of us.

When I was in school she tried to scale it outside of herself (adding a location) and wasn't able to set up the systems and processes necessary to so successfully. My role is working along side her, keeping her doing the things she's good at, taking over some of the bigger picture aspects, and working on growing the business.

The first location was strong enough to support all over head for both locations as I hired new people and picked up more accounts to make the other location profitable.

The last couple years I've spent time growing the secondary location, learning the industry, and working with financial consultants to learn where the business really is and planning where I want it to scale it to in the next couple years. As in most businesses (I hope) nothing is easy and commitment to consistency is the key.

Since starting I've helped grow things from about $3mm to about $5.2mm/yr. I'm at the point now where I really understand the ins and out, and feel comfortable telling people what needs to be done. I always felt like I was the bosses spoiled kid trying to tell people older than I what needs to be done.

Right now the current plan (next 18 months) is me on sales and overall systems/processes, and her being the cheerleader making sure work orders are completed on time. Our goals are to have each location at $5mm/yr, then add a third location, then add another location or additional service offering.

Thank you all for providing a place for learning, harsh realities, and growth
 
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Andy Black

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Hey guys,

I've been reading the forum for a while, gained some great nuggets and wanted to introduce myself and tell you what I'm up to at the moment.

27 years old, and my family has a (location dependent) business services company. My mom started and runs the company. My dad has a job in another industry and is not involved.

My mom was the typical high performer in her field that felt she could start a business and do a better job. As the story goes she wasn't able to grow it beyond herself.

I went to school to study business and came back to work along side her. I don't necessarily have a passion for this particular line of work, but have a passion for building and growing a business and scaling it to a point where it can give me the funds for other projects or an exit for both of us.

When I was in school she tried to scale it outside of herself (adding a location) and wasn't able to set up the systems and processes necessary to so successfully. My role is working along side her, keeping her doing the things she's good at, taking over some of the bigger picture aspects, and working on growing the business.

The first location was strong enough to support all over head for both locations as I hired new people and picked up more accounts to make the other location profitable.

The last couple years I've spent time growing the secondary location, learning the industry, and working with financial consultants to learn where the business really is and planning where I want it to scale it to in the next couple years. As in most businesses (I hope) nothing is easy and commitment to consistency is the key.

Since starting I've helped grow things from about $3mm to about $5.2mm/yr. I'm at the point now where I really understand the ins and out, and feel comfortable telling people what needs to be done. I always felt like I was the bosses spoiled kid trying to tell people older than I what needs to be done.

Right now the current plan (next 18 months) is me on sales and overall systems/processes, and her being the cheerleader making sure work orders are completed on time. Our goals are to have each location at $5mm/yr, then add a third location, then add another location or additional service offering.

Thank you all for providing a place for learning, harsh realities, and growth
Great intro. Thanks for sharing. What a privilege to be able to work (and make it work!) with your mum.
 

ZCP

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@PinPointing awesome start!!
what were a couple of things that you learned that could help others grow that 2nd location?
what will you do different for the 3rd and the 4th?
any plans to franchise beyond that?
 

PinPointing

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@PinPointing awesome start!!
what were a couple of things that you learned that could help others grow that 2nd location?
what will you do different for the 3rd and the 4th?
any plans to franchise beyond that?

I've definitely make a lot of mistakes. Give me a couple days to recall some of the biggest.

Franchising is probably not something we'll do. Training new employees that work in our profit centers is one of the most difficult things as we don't have the best training material/programs. It's a lot of shadowing and on the job training. The idea of training a franchise owner is something that's just too overwhelming and not something I'd want to spend time designing or managing.

The other issue I have with franchising (in this industry) is that each franchise owner would create too much overhead in payroll costs and really slim the margins for the company/owners (I want that money! :). We'd have to have a lot of locations for that to make sense. I'd rather have a regional manager that's responsible for 3 locations and given incentives for their success.
 
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PinPointing

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Jan 10, 2014
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@PinPointing awesome start!!
what were a couple of things that you learned that could help others grow that 2nd location?
what will you do different for the 3rd and the 4th?
any plans to franchise beyond that?

Mistake #1- Having my second location too far from the 1st location.
  • I want to have accounts ready to be serviced before the other location is staffed.
  • You can have the first location working on those accounts until the second is staffed up and ready to go.
  • You can have people train/shadow with your top performers on those accounts in the first location for a week or two. Your top performers can also go to the second location from time to time for more training.
  • If someone is out, quits, or is fired, one location can pick up some of the slack until you get another person in place.
  • We can still do this to an extent, but having the office a little closer would have been better.
Mistake #2-Not giving the profit center a performance bonus.
  • We originally thought just pay the profit centers a flat wage regardless on how much work they do. The idea behind this was to avoid people doing sloppy work so they could get more done and get a bigger bonus.
  • They just need to understand that sloppy work will work for the short-term, but result in fewer repeat customers. It's a balance of speed and quality.
  • You need to know exactly how much a person costs you and how much you need to make from them to justify keeping them.
  • I have a clear scale that everyone get's so they know on a weekly basis, if I get this much work done, this will be my bonus. Be careful with this because I've over inflated the bonus scale and it sucks having to tell someone they're going to make less for the same work. You can always make it higher in the future.
Mistake #3-Not setting clear expectations/KPIs for employees. I thought because we're small it didn't matter, but it does. Accountability is huge.
  • You have KPIs for the business overall, but you want KPIs and expectations set for your people too. Even if it's just one. Make sure they get these as often as makes sense. I do them every week and if I get behind or forget, they actually get mad and pester me about it.
  • Share certain office KPIs with the staff. I don't give them sales numbers, but I say how many units we sold or billed. People like to see progress and the work they put in is helping grow the business. I think it helps build a team atmosphere.
  • I set them up so as long as they're hitting numbers, it doesn't really matter if they're playing on their phones or F*cking around on facebook. You don't want to have to rely on everyone being the perfect employee. It still pisses me off, but hey're a stable employee, making me money, and allowing me to grow the business. No one will ever care as much as you, but some are still savages and kick a$$.
  • It also makes easier "performance reviews" or letting someone go because they know they aren't hitting the numbers they agreed to in the start.
Mistake #4-Poor Online Project Management
  • This eliminates a lot the "where are you on this" phone calls and meetings.
  • It also creates further accountability that I, along with everyone else can see who has done what.
  • I love office 365 shared docs/excel. it's cheap, requires little to no training, and does what I need.
Mistake #5- Getting good people. Having good people that are capable makes things way easier. Still not great at this but getting better.
  • I've found a particular past job/experience that translates well to what they'll do for me.
  • The job I offer them isn't the greatest job in the world, but it's better and higher paying than what they did before.
  • I don't want someone that's overqualified that could leave at the drop of a hat for something better.
  • I Interview a lot of people multiple times. I've had it happen where I interview someone once and I want to offer them the job, but then they don't even show up for the second interview. Now I try to do 4 interviews. 1-Learn about them and they're experience, 2-sell them on the job and company,3-try to scare them away with the negative aspects of the job, 4-see if they show up and have one other person interview them and give me their thoughts.
  • If you can, make sure they get along with the people they'll be working with. Have another person talk with them before one of the interviews and get feedback. They don't need to be best friends but I don't want constant complaints about each other.
Mistake #6- Thinking I'm better than doing some tasks that I don't like.
  • As Andy Frisella from MFCEO says, you gotta do things you hate for a long time before you can do what you like.
  • I still do things I hate, but you can't work on something before you put work into building it.
  • I don't like dealing with our customers. being tied to my outlook responding to them and their complaints. I realized I had to until we could afford to bring someone on with the experience and ability to be a good account manager.
  • Sometimes I still have to jump into things I hate if someone had planned a day off and another person called in sick in the same day.
 

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