Today’s post comes from Ken Y, Training & Development Manager. He shares words of wisdom that every new entrepreneur should read. Check out this construction advice courtesy of Ken.
As a young man starting my own millwork company, I had all the confidence in the world. I had access to tools that weren’t exactly new, but were capable and dependable. I found a great facility that gave me space to do complicated projects while streamlining the process for production boxes. And perhaps most importantly, I had several talented builders coming to work for me. I had the tools and talent to produce high-end millwork and install it as well as anyone in the industry.
I had a solid business plan and I knew enough people that would feed me consistent work. I got the proper insurance and workman’s comp. coverage, an accountant, and a bank account and I was ready to go. Or so I thought.
As I was soon to find out, there was more to running a business than finding work and managing projects. There was also the business side of doing business.
I started bidding work immediately and we won several projects. We started making cabinets, installed a few jobs, won a few more – and things started to get busy. My days were spent drawing, building, faxing, calling, and installing. It just never seemed to end, and I loved it.
Then it happened. I had invoicing, lien wavers, draw submittals and approvals. There were bills to review and prioritize, payroll to manage, and taxes to pay. I found out that accountants only do what you pay them to do, and apparently I wasn’t paying mine to do much. I found that, not only did I lack some of the expertise to maneuver through this financial maze, it was extremely time consuming.
Some clients started paying late and it was hard to balance payroll with purchasing materials needed for upcoming jobs. I had to start extending myself in areas I had never anticipated, like personal finances. Chasing money started consuming large portions of my time, and while my craftsmen were talented and quality people, they were forced to operate without the supervision I no longer had time to provide. They were forced to make decisions that they should have never had to make, and it led to some costly mistakes. It was my fault, plain and simple, because I was not there for them.
At that point I made a decision that I wish I had made at the start. I brought someone in to manage the financial end of the business so that I could do what I knew best – running the millwork business.
While the first couple years were rougher than they probably needed to be, I learned the hard way what it takes to run a business, and it all worked out in the end.
If you’re thinking of starting a business, my advice to you is to think beyond tradesmen when bringing in talent. Make sure you bring in someone with the skills to manage the business side of the business. I underestimated the expertise and time the financial side of the business takes. Don’t make the same mistake.