I received an email a while back from Beau Wheelock stating, “Hey man, I just thought I’d reach out and say how much I enjoy the new midweek you have been doing. I can relate on many levels to the topics you’ve been discussing. We are in our third year of business full-time, and we are getting busy beyond what I can handle myself. Similar to you, I would rather stay lean and work with a team of subs rather than a bunch of employees. Would love to hear you talk about dealing with the anxiety of being booked out too far and having to either schedule incredibly far out, or just tell people no and lose the work. Tough balance that eats at me.” 

Well first off Beau, thank you for the email and for following along. I appreciate all of the support, and hopefully the time dedicated to this platform is serving others as it is serving you. It definitely makes the sacrifices easier to swallow!

First off let’s talk about growth. Why do you want to take on more work? If it is to appease your customers or tell less people “no” it may not be the right move. As you mentioned there is a balance between schedule, customers’ needs, your needs, finances, and job security. If you are taking your business in any one direction without considering the totality of the impacts associated with each decision, you may be shooting yourself in the foot. If you need to make more money, then you need to understand the costs and burdens associated with either bringing on employees or subcontracting more work. Larger numbers does not mean larger profit; especially when you look at the hours spent working. 

If you are wishing to put people in place to maintain a quicker turnaround for your customers, you must understand the impacts of these changes. There is only one of you. Growing often means you will have less time and more irons in the fire. If you are in control of quality and managing projects, you must now split your time between multiple projects. Whether subcontracting or bringing the work in-house, it will be much more difficult to maintain quality especially with respect to cost. Paying people to do re-work is a very slippery slope when it is not simply a concession of your own time. Not that that is the right move, but it is less financially impactful in the short run. You can train someone to manage your projects, but if you do not have the time, money, or resources to do so, the first few years will be tough for you. The other option is to hire someone who is qualified and pay them a premium. This is certainly appealing, but you must ensure that you have the customer base to support the added costs of this business model. If you are unsure of how to operate a business with a high-level employee, you may not be maximizing your profits and it may create more of a burden than a blessing. You have more and larger mouths to feed. Is your business structured to support that?

Unfortunately for us residential contractors there is no standard within the industry. There is no playbook or path to success. Every municipality, business market, subpool, and employee market are vastly different. Generally speaking, we must all learn what works for us and what works in our market. This is not ideal, but it is the thorn in the side of our industry, and I do not see that going away any time soon. How do you want to learn? Slowly and organically or fast and furious? There is no right or wrong, but it comes down to your risk tolerance and how much stress you can handle. Growing a company is no walk in the park. You are constantly leapfrogging between trial and error, profit and loss. Every change and decision that is made affects everything prior and everything to follow. I personally prefer to micro analyze these decisions and changes, and if they do not work, sever the ties and proceed in a different direction. I am not one to force a square peg into a round hole. What do you want out of life and business? What is important to you? At what cost?

My current model of one employee/part time help with a more robust subcontractor pool works well for me financially, emotionally, and personally. I have established a reputation for which I can command a premium for my time with the toolbelt, my time managing subs, and my time managing employees. This was not always the case, and at times I struggled to truly make a living. I am content with the fact that I can only get to 4-6 customers a year at best. If they cannot wait, or it is an emergency, I can live with the fact that they may need to turn elsewhere. I have in fact suggested that to customers who were in a hurry, and most come back to me telling me that they should have waited for my availability. If a customer chooses another contractor due to price, turnaround, or any other reason; and they determine that that contractor provides them more value or a better experience, then they are not my customer. I am not doing my job. I want people to hire me for me. I want people to wait for an opening in our schedule. I want to create scarcity. That is my business model. It affords me an ability to charge a higher rate and perform less work. 

Big picture is that my sales are limited with this business model. I can live with that at this stage of the game. If I need to make more money at some point, I will need to address that and implement changes that will positively impact my profit margins. I am as lean as I can be, I am as selective as I can be, and I am charging what I feel is fair for my time and experience. Could I make more money keeping more work in house and subcontracting less work? Yes, but it would not support the lifestyle that works best for me and my family. Could I run multiple jobs at a time and hang the toolbelt on a hook? Yes, but I do not have the systems in place to support this style of business, and it would compromise the quality of my product (something I am not willing to do). Could I relinquish control and hire more people to help my work load? Absolutely, but I enjoy the amount of responsibility I currently have. It is not too little, it is not too much, and it keeps me on my toes without generating an abundance of anxiety. 

Right now, my business model works for me. That is not to say that it will work forever this way. I am constantly honing my model, making adjustments and changes, and then analyzing the impacts of said changes. Regardless of the size or scale of your business, you must always maintain a finger on the pulse of the system. Find what works best for you and run with that. There is no right or wrong for everyone, only what works for you. If having the capacity to serve your customers on their timeline is at the top of your priority list, then create a business that supports that need. If making money is the end all be all, then shape your model to align with that desire. If reducing your stress and having time outside of work is critical for your health and the health of your business, then find a model that meshes with these principles. After 13 years, I know what works best for me right now. That is the hand that I put forth. If something changes a year from now, I will make a change with respect to my needs. 

Beau, thank you again for taking the time to shoot me an email with your questions. While it may not be the solitary answer that you were seeking, I hope that it provides some insight as to what works for me and my business. There is no single right answer, and as soon as you realize that, you can start making progress based on what you want and what you need!

- Tyler Grace