Happy New Year Everyone,
At this time of the year I like to do a quick look back: What did I learn and what did my clients learn from 2021….?
Here are seven lessons that you can take advantage of if you have not already.
1. PPP Doesn’t Fix Your Mistakes
The government gave you a cash infusion to either survive or to fix your mistakes. Some of you only survived but left mistakes in play.
I saw this from my recent Financial Master Class. Equity in landscape firms was up greatly year over year, and sales were up greatly as well, but profitability margins on average were down slightly.
As an aside, if you are looking to buy companies, some of them may feel flush from last year but run thin on money again later in the year or next year. Keep your eyes open.The government gave you a cash infusion to either survive or to fix your mistakes. Some of you only survived but left mistakes in play. Click To Tweet
2. Residential Is Valuable, Too
Multiple residential clients of mine were made offers to be bought. Even companies with heavy design-build or bid-build.
I predicted this would happen a couple years back, and it did more quickly than I imagined. Private equity has taken notice.
This means you don’t necessarily need to convert your client base to commercial to have a valuable business, (but you still need to refine your strategy to build business value.)
3. Manpower Is Solveable If You Look Outside The Industry
There are many talented people out in the world that would like to work in your company. Training them (or them learning the business) is not as hard as you think. These people will fill roles such as:
- Second in command.
- Operations managers
- Sales people
There are also laborers who want to switch careers from working in-doors to working outside, as long as you have the training figured out.
4. Training Must Be Solved Like Any Other Issue If You Want To Grow
My recent podcast with Dustin Wolfe touches on this topic and how to solve it.
Dustin hired a part time trainer to build a training plan and then run the plan. Word got out and more and more people want to work for his firm because he invests so much in his people. In a year+ time he dramatically grew his business, from a smaller player to a big player. It’s not the only reason he grew but without it he would not have doubled so quickly.
Another client, Sean Baxter brought in a full time account manager to do part time training, spending a few days a week in the field on the crews training.
It’s time to start thinking bigger, in order to become bigger.
5. 25% Is The New 20%
What I realized in 2021 is that my tactics and strategies to get you to 20% net profit (15% if you are commercial) will also take a residentially focused company up towards 25% in a booming economy.
Of course if you are reinvesting in “dramatic scaling” your profit won’t be as high, but in this economy it doesn’t have to be low either. Don’t leave money on the table!
My point is, once you figure out the strategy how to get to 20% it’s a matter of tactical changes that can drive you further.
6. Investing In People Comes Before Strong Growth
Which comes first, the chicken or the egg? The answer: You need better chickens if you want more eggs.
You either need to be more resourceful with your good people, and put them into positions where they can better succeed.
Or you need to find better people to take your company to the next level.
But if you do neither, you won’t miraculously grow to the next level..
For many of you that means stepping up and hiring a key (more expensive) person that you can’t afford in your budget, someone that is out of your normal pay ranges. But hiring this person will make your budget and make your year if you do.
So do it.
In other words, you aren’t over paying if you are hiring potential superstars.
(I find the same with my coaching services or my high impact peer groups; some owners will tell me “its not in the budget”, and my response is “of course not, it’s never in the budget, but it pays for itself and then pays dividends after that, so what are you waiting for?”)
It’s the risk takers who reap the rewards!
7. Think And Plan In Quarters
With all the changes we are seeing coming quickly, like inflation, supply problems, opportunities for acquisition, technology changes, etc, you need to be on your toes and be willing to change strategies and tactics from quarter to quarter.
You should be meeting with your team quarterly and treating those meetings with the seriousness of annual planning.
What got you here, won’t get you to the next level, or even to the end of the year, if you are not on your toes.
With all the changes we are seeing coming quickly, like inflation, supply problems, opportunities for acquisition, technology changes, etc, you need to be on your toes and be willing to change strategies and tactics from quarter to quarter. Click To Tweet
Your Challenge: Build A Nimble And Adaptable Leadership Team, In Order To Take On The Surprising Changes In 2022 And Beyond.
The times they are a-changing….and that was back in the 1960s. They are still changing today, now more than ever.
P.S. Take advantage of my upcoming “Develop Your Second In Command” on Feb 15th, to help you build your foundation for growth.