How to Expand and Sustain for Long-Term Business Success

This article was written by Louis Cole, founder and president of Emecole, Inc. the precursor of Emecole Metro LLC.

When it rains it pours. Suddenly the phone is ringing more than ever, and your backlog of work has grown from two weeks to two months. You are excited. This windfall will surely put a lot of money in your pocket and allow you to do more for and with your business.

Or will it?

All reliable basement waterproofing contractors and crawl space sealing and insulation installers will eventually face two kinds of growth. One will reward you for all your hard work. The other has the potential to ruin you.

The example above creates a dilemma for a new or small business: should you add personnel and equipment to accommodate the flood of new work, or hold tight and simply accommodate as many calls as you can? Before making that decision, the contractor must ask one simple question: what is the cause of all the new calls?

If seasonal rains have flooded every basement within city limits, you must remain cautious. This “windfall” may be temporary; therefore, adding overhead – new employees and equipment – may be disastrous. That doesn’t mean the contractor should do nothing. In fact, this may be a great opportunity to introduce your services to a new neighborhood. Just because you can’t answer every distress call doesn’t mean this isn’t a lucky break.

Now, I said the seasonality of the situation may mean this is not a long-lasting surge – unless you can tie it to your strong, steady marketing effort. Perhaps you’ve noticed increased referrals from happy clients and more phone calls during sudden weather problems. These trends may indicate that it is time to add personnel and maybe buy another truck.

Through the years, my friend and colleague Roy Spencer, owner of Perma-seal Basement Systems in Downers Grove, Il., has learned how to analyze growth. That’s how he expanded from a small business to a corporation that has served more than 100,000 satisfied customers.

“You don’t want to get swept away by circumstances. Do you have a plan? Or are you just reacting to whatever blows your way? Sticking to a plan and calling your own shots is the best way to grow,” the 30-year veteran says.

Roy and I divide growth into two categories: seasonal and solid. You can assume growth is real, or solid, if the increase has persisted over a two-year period. Anything less may be a short-lived event that tricks you into making a capital investment that you can’t sustain.

“Some contractors over-expand in good times. I think that’s a bad idea. You want to build flexibility into your company. That means you’ve put aside money that will allow you to pay for new equipment and employees when the time is right. You have to be fiscally responsible,” Roy says.

He’s right. Compare two basement or crawl space contractors of equal talent and drive. One succeeds and builds a lasting reputation, while the other fails. Why? One word: management. The “unlucky” fellow goes out of business not because he lacks knowledge about basement waterproofing, crawl space sealing and indoor air quality. As the saying goes, “If you don’t have the business moxy, you have no business running the business.”

But don’t despair if you think your business skills need an upgrade. Sometimes the best thing a contractor can do is hire a business manager. Surround yourself with the right people who compliment your skills and you’ll succeed.

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