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Fighting About Deductibles or Simply Collecting Them?

Many restorers have a challenge collecting deductibles (especially if they wait until the job is complete when their customers go from being grateful to greedy!) I recently read a post by Restoration Rebel Jason Monday that I thought was brilliant and wanted to share:

“I have found that offering in-house financing in these situations is very effective. You explain (to your customer) that you will offer to bill them monthly for up to 36 months with 0% interest and secure the deductible amount due with a lien. This allows you to come across as very compassionate and non-threatening. I have very rarely had a homeowner actually take me up on this offer. More often than not, they just pay by credit card or check in order to avoid a lien on their property. (Instead of threatening, it appears to them that you’re going out of your way to help.)”

The “Fu” in Jason is strong!

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Lack of Formal Processes Could be Costing You Thousands

Inefficient Processes Are to Blame for Wasted Work Hours

Wasted time by managers and workers costs many restoration companies as much as 20 to 30 percent of their revenue each year. WOW, that could be $200-300K per million dollars in sales. Talking about unnecessary money down the drain.

The most common cause of wasted time during the workday is inefficient processes and duplicated efforts, a new study shows. A research study conducted by The Powering Productivity firm that surveyed business leaders across the US, UK, Netherlands, and Germany suggests that workplace inefficiency is a core management issue. This study indicated that the primary cause of wasted time during the workday is inefficient processes (44 per cent), followed by an overload of paperwork (43 percent) and meetings

(41 percent). This wasted time can severely affect customer satisfaction and employee retention.

Business inefficiencies are more than a minor distraction for restorers and their managers. Research reveals that employees (57 percent) and customers (48 percent) are the most likely to suffer because of wasted time. This problem creates a burden on your employees and customers and can lead to retention problems in the long term.

As you review your restoration business, your processes may not be perfect; however, you have them even if they are random and have been developed by employees who are no longer with your company.

In order to operate with maximum efficiency your processes must have a common language and work in alignment with each other. That common language is your business operating system (BOS).

Just like a computer that slows down or does not operate correctly, you might be experiencing a faulty operating system. How do you know? There are several symptoms:

  1. Business feels chaotic and out of control.
  2. Increased sales are not resulting in increased profit- only more chaos.
  3. There is a high rate of employee churn causing employee retention and hiring issues.
  4. Poor accountability. Employees are not 100% clear on their key responsibilities. This results in dropped balls, frustrated customers and stressed out employees.
  5. Meetings feel like a waste of time and ineffective or seen as complaint sessions where nothing ever really gets accomplished or solved.
  6. The business is in constant firefighting mode, moving from one fire to the next.
  7. There is no budget which is used to plan spending. You do not have the information to make decisions. Cash flow is a problem.

Do any of these symptoms sound familiar? If so, in order to deal with all these issues, you need the right business operating system in place. The right business operating system contains a group of processes that go from the 50,000 ft. level of the business to the “boots on the ground” activities of each employee. The right business operating system drives clarity and results.

To solve the seven problems mentioned above, you need a business operating system with processes for:

  • Clarifying and communicating your Company’s vision.
    • Clarify and communicate your vision (core values, core purpose), so everyone knows where the business is headed long-term, why it’s going there, and how your team will behave along the way.
    • Studies have shown that only about 14% of all employees understand their company’s strategy.

  • Determining the right goals for your business.
    • Goals are what drive your business closer to its long-term vision.
    • Each goal should have an owner and a way to determine if it has been reached (a KPI or key performance indicator).
    • Keep your team aligned and on track to achieve the vision and goals with a proper meeting rhythm with specific agendas and meeting dates.
  • Linking the company goals to the day-to-day activities of each employee.
    • Each employee must understand the specific role they play in achieving the goals and vision. This process drives accountability by clarifying each team member’s key responsibilities and how their success is measured (KPIs).
  • Solving problems (fires).
    • Since every business encounters problems, each business needs a process for keeping the business out of firefighting mode by identifying and solving business “fires” in a systematic way. Without this process, a business can quickly become overwhelmed with all the problems and not make progress on its goals.
  • A process for your processes.
    • Your business needs a way to define each of the core processes which deliver value to the customers so they can be executed over and over again flawlessly.

  • Developing a budget and generating solid financials on a monthly basis.
    • So many businesses truly “fly blind” either by (1) not having a budget or (2) not updating that budget on a monthly basis with actuals so they can make adjustments.
  • Software for easily updating and tracking the right key performance indicators (KPIs).
    • Every business needs a process and software for easily tracking the key performance indicators of the business which define the success of the business.

As you can see, these processes are all interrelated and necessary for success. If your goals are clearly defined, but each member of your team does not have clear roles and responsibilities, the team will end up wasting time working on things that do not get you any closer to achieving your Company goals.

What to Do Now:

If you are ready to streamline your restoration business by implementing high-impact business processes, consider BDA as a resource to help you with this initiative. We have more than 3 decades of industry experience and have helped many of our clients build high-performing companies.

At BDA, we believe that every restoration business owner has the right to expect that their company can deliver to them what they want out of life- freedom and the ability to create wealth.

Make it a prosperous month!  Stay tuned for next month’s article.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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One of Many Truths About Salespeople I Have Learned Along the Way

I have personally hired scores of salespeople and here is one absolute truth that I have discovered in the process. When you hire them you believe that they “can do it” but you never know if they “will do it” until they actually attempt to do the job in the real world.

Now, this doesn’t mean that you just hire anyone, throw them in the deep end of the pool and see if they sink or swim. In fact, it means the opposite of that.

It means that you use the most rigorous hiring process that has proven to be effective. You cast a wide net, screen hard and whittle down the candidates ruthlessly.

You put in the time and effort to understand that salespeople aren’t like anyone else that is hired for your company and why HR sucks at it. You learn what strengths and weaknesses and other characteristics are required for salespeople to be successful and you don’t allow people that don’t have the right combination to join your company.

And when you’ve hired who you think the very best person is you on-board them with diligence and attention. You give them the tools and scripts and processes and hold them accountable. You make sure that they use the CRM properly so they can be organized and efficient.

You manage them with care, building rapport and coaching them to achieve their personal goals with the knowledge that if they achieve their personal goals you will achieve yours.

You back them up by delivering on your product and service promises and refuse to allow sniping from the production and admin teams and vice-versa.

And even after all of that, while you believe that they can do it when you hire them, you never know if they actually will.

Business, like life, is an ever unfolding process. You never stop working at it until it’s over. If you’re hiring salespeople that fail, learn what you need to know to stop doing that. Your business depends on it.

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Closing the Deal or Opening the Relationship?

Sometimes sales “experts” talk about closing skills as “going for the kill” or “not taking no for an answer” or they have 87 different closing techniques like the “Puppy Dog” (let them take it home and they’ll fall in love with it) the “Ben Franklin” (show the advantages against other options on a sheet of paper) and on and on.

Here’s the problem. If you are in a business that relies on repeat business and on-going relationships, your prospects see through these closing techniques instantly and their resistance to doing business with you goes up, not down.

There are some exceptions; time share sales come to mind, but for most of us, we need a legitimate and credible way to not just close a sale but also open a relationship.

The way forward starts with marketing. Do you understand the “pains” that your prospect verticals have? How does your company solve those pains? How different is your approach to those solutions from your competition? What programs have you developed to specifically focus on prospect pains?

If you start with finding pain, ask the right questions to uncover your prospect’s compelling reason(s) to buy and follow a consultative sales process there is no need for hard closing or fancy techniques. The sale should close itself.

This is not to say that there aren’t details to work out and obstacles to sometimes overcome. The point is that if the prospect sees their pain clearly and sees your solution as way that makes sense to address that pain, then you are at the point that you want to be, which is that you have determined that there is a mutually beneficial reason to do business.

All that’s left is to work out the details and open the relationship!

Tim Miller

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Creating Long-Term Success in Your Business While Creating Employee Satisfaction

Building a performance culture system in your business will help you develop the right habits to grow your business to new levels of success. This may mean changing the habits that were initially required by you to make your company successful in your initial owner-reliant model, and it may mean some hard choices; however, the reward is worth the effort.

Developing a performance culture that produces long-term benefit takes discipline and commitment- the essential components required to create good habits. Before you start to implement a high-performance culture in your company, it is important to recognize the bad habits your company may have as well as understand how you can develop good habits.

Here are some examples of bad habits:

  • Micro-management/lack of delegation- business owner and key managers that are overly involved in too many aspects of the business because they are worried about failure.
  • Constant fire drills- company leaders are too focused on solving immediate challenges versus strategic planning and continuous process improvement.
  • Immediate gratification- business owner and employees are focused on immediate personal benefit versus mid-term to long-term strategic results, i.e., “employees- what is in it for me today” or business owners who spend all the profits versus investing in future growth.
  • Directing versus motivating- leading by force versus developing employees to be their best.
  • Silo mentality/mavericks- focusing on individual effort versus the team’s over-all performance; lack of trust inside the company, office politics, etc.
  • Lack of accountability- allowing employees to get away with bad performance.
  • Hiring too quickly and firing too slowly- putting off hiring until it is absolutely needed and ending up with a subpar employee or not firing soon enough and being stuck with an undesirable employee or behavior.
  • Lack of communication- business owner and/or company managers who view meetings as a waste of time and fail to communicate strategic initiatives to the employees.
  • Opportunism- chasing the newest “shiny object or strategy of the month” versus focusing on what company does best.

If you can recognize one or more of these negative behaviors or have noticed unhealthy habits inside your company, you are not alone. Developing a high-performing culture will help you change these behaviors and develop positive habits that will increase profit margin and lead to long-term sustainability and employee engagement and satisfaction.

In the book, “The Power of Habit: Why We Do What We Do in Life and Business,” author Charles Duhigg explains how business leaders achieve success by focusing on the patterns that shape every aspect of their lives.  He explains that “a habit is an activity that a person deliberately decides to perform once and continues doing without focus, often frequently.”  This is a great read, as well as a good resource to help you implement a high-performance culture in your business.

There are four elements of a high-performance culture to position your company for success:

  1. Effective leadership- the cornerstone for transforming your company culture into a performance culture.
  2. Niche strategy- the foundation for building or increasing your competitive edge and includes your Unique Value Proposition (UVP)- your way of standing out from the competition.
  3. People management- simplifies the complexity of managing a growing business and helps you develop a performance culture.
  4. Process excellence- creates a system and scorecard that enables your company to grow profitably.

Implementing these four elements is a process itself and requires discipline and commitment from you and your key managers. After implementing this process, you will see significant positive change within your company.

How to develop a high-performance culture in your business:

  • Personal vision- define your personal vision and tie it to the company vison.
  • Leadership assessment- evaluate your leadership style and create an action plan to leverage your strengths.
  • Niche strategy- evaluate your unique value proposition and improve your competitive edge.
  • People management- determine the key positions in your company, select the right employees to fill these positions, establish focus, prioritize action plans, and create accountability.
  • Process excellence- define your value chain, achieve process excellence, and measure Key Performance Indicators (KPIs).

A written plan with weekly updates will encourage good habits to flourish. Research has shown that people do better when they write down their plan and document the activities in a journal. The same is true when developing a high-performance company culture. Writing down your plans creates clarity and forces you to think through action.

Having a focus on performance will help you as the business owner to develop strong leaders, high-performing employees, and a great company culture. It will create habits that drive profitability and increase your company value.

What to Do Now:

If you are ready to streamline your restoration business by implementing a high-performing organizational structure, consider Business Development Associates as a resource to help you with this process. We have more than 3 decades of industry experience and have helped many of our clients build high-performing companies.

At Business Development Associates, we believe that every restoration business owner has the right to expect that their company can deliver to them what they want out of life- freedom and the ability to create wealth.

Make it a prosperous month!  Stay tuned for next month’s article.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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The Will to Win: A Closer Look

The legendary basketball coach Phil Jackson said that he didn’t really understand the will to win until he saw Michael Jordan win the “flu-game” on the way to the Bull’s fifth NBA championship in 1997.

I have also seen the will to win play out with the salespeople that I have trained over the years. When we hire salespeople, we use a highly predictive assessment to help us understand if they have the right combination of strengths, weaknesses and other characteristics to make it within our industry and selling system.

As you might imagine, there is a range of acceptable assessment scores and deciding on hiring the right salesperson depends on a certain intuition on the part of the recruiter who is evaluating the three interviews we conduct, looking carefully at the resume, appraising the reference checks and so on. There’s a certain art as well as a science to this!

Now, even after all that careful vetting the one factor that trumps everything is the will to win. This is usually demonstrated by new sales reps that fully buy-in to their training. They don’t waste a second questioning the methodology, wondering if this will work, if the trainer knows what they are talking about and so on. They trust the process and therefore free up all of their attention and energy focusing on learning what they need to learn. They are usually champing at the bit to get out into the field to start using what they have learned.

I recently started training two salespeople for a new client. One had great assessment scores, the other more average. One tore through his training with total commitment and focus and the other struggled. One set four At the Desk Meetings in his first week of prospecting and one quit before the training was completed.

Which one is taking off like an F-16? The one with the average assessment scores but an amazing will to win. In fact, he showed me something more important than the will to win which is best exemplified by a quote by the famous college football coach “Bear” Bryant who said, “It’s not the will to win that matters—everyone has that. It’s the will to prepare to win that matters.”

This rep, who is off to an amazing start, has the will to win and perhaps more importantly, the will to prepare to win!

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Creating Your Organizational Chart for Business Growth

Creating Your Organizational Chart for Business Growth and Prosperity

Many restoration business owners start with a small number of employees that function informally to perform the company’s work. This informal structure usually works until change occurs, such as adding new employees, changes in responsibilities, or growth of the business. The owner often discovers the importance of organizational structure when uncertainty arises regarding roles, responsibilities, and supervision of their employees.

The Organizational Chart, often referred to as Org Chart, is a graphic representation of the company’s flow of command. It shows at a glance how each division or department of the company works together to make the business profitable, and demonstrates where the employees of each department or division fit within the internal personnel structure.

An Org Chat and supporting documents are necessary from the very beginning of a company’s existence not just when it gets too big for one person to manage. Developing a Org Chart is the first step to creating a larger strategy for your business. By determining the roles and responsibilities that you need, you will map out a clear structure for you and your team. No matter how you imagine the future of your business, an Org Chart will help you properly prepare your company for the future, and you can use it as a reference for the next steps that you need to take in terms of hiring and growth.

Benefits of an Org Chart

Fundamentally, an Org Chart has many benefits and the following are just a few:

  • provides a foundation to build and design your organizational structure to meet the business’ objectives
  • clarifies employee roles, responsibilities, and direct report
  • separates the functions of a company or department
  • indicates the reporting relationships between management and workers
  • provides clarity to improve employee performance
  • allows the business owner to delegate management responsibility.

A Common Pitfall- The People-Based Org Chart

Many business owners have jotted down an Org Chart at some point. Often, however, these are “people based” org charts, populated with boxes that say, “Sally,” “Joe,” and “Chris.” The problem with this type of chart is that accountabilities are often unclear, positions are vague, and the people holding the positions find themselves building their roles around their strengths and weaknesses instead of around the needs of the company.

Remember, as you work through developing your Org Chart, it is imperative that you organize your employees based on specific business activities, i.e., sales, marketing, operations, administration, and finance rather than individual talent.

With a “position based” Org Chart, you outline positions to produce the results your company needs to grow and prosper. In fact, a strategic business owner can use the Org Chart to design the company as it would ideally look in the future, determining which roles and skills the company will need to meet future revenue and profitability targets. Your Org Chart is your primary management tool to manage the growth of your company.

First, to get started in designing your “ideal company,” imagine what you would like your company to look like in two years. I call this a Mini-Plan. Consider these questions:

  1. What will your revenue be in two years?
  2. What will your gross profit be?
  3. What will be your overhead expenses?
  4. What will your net profit be?
  5. What service lines will your company deliver, i.e., mitigation, repairs/reconstruction, mold remediation, and contents cleaning, etc.

Second, consider what organizational structure could produce these results. Begin to build an Org Chart that depicts the key roles and responsibilities that will fulfill the goals of your business. Review my previous articles regarding organizational structure.

Seven Steps to Complete Your Org Chart

  1. Free yourself from your current organizational chart.
    • If you already have one start with a fresh one. You need to feel free and unencumbered as you begin to create something new.
  2. Begin with a title and the President’s box.
    • Take a blank sheet of paper and at the top write: The Organizational Chart of (your company name).
    • The first box will be President or Owner.
  3. Draw a box for each of the major departments. Typically, an Org Chart has at least three main departments, so create a separate box for each:
    • Sales and Marketing
    • Operations
    • Administration/Finance
  4. Create each managerial and nonmanagerial function.
    • Draw boxes that represent functions and work grouping to accomplish each result.
    • Create a box for the Manager of that function, e.g., Production Manager.
    • Identify the positions that do the tactical work of each function, e.g., EMS Tech, General Repair Specialists, etc.
    • Draw vertical lines to represent those positions.
  5. Create position titles for each function. Each company has a different structure so here are some examples of management positions:
    • Marketing Manager
    • Restoration/Mitigation Manager
    • Reconstruction Manager
    • Office Manager
  6. Review and revise the Org Chart.
    • Implement the Org Chart and then evaluate the process to determine if it is producing the results you want. Revise if necessary.
  7. Check listed business activities.
    • Make sure all the activities your company does are listed somewhere on your Org Chart.

If you take the time to define the structure of your future company, you will have in your hands a strong outline for building a successful company. Likely, it will help you to view your company from a new perspective, causing you to make key personnel changes now rather than wondering “what went wrong” down the road.

Taking Action Now:

Send me an email to request your FREE example of an Org Chart for a restoration company. You will be glad you did!

If you are ready to streamline your restoration business by implementing a high performing organizational structure, consider Business Development Associates as a resource to help you with this process. We have more than 3 decades of industry experience and have helped many of our clients build high performing companies.

At Business Development Associates, we believe that every restoration business owner has the right to expect that their company can deliver to them what they want out of life- freedom and the ability to create wealth.

Make it a prosperous month!  Stay tuned for next month’s article.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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Ah, Grasshopper, Do Not Overlook the Sales “Fu”!

As I work with salespeople I notice that there are three related aspects to sales performance that are worth considering for those looking to improve sales performance. That’s because the salesperson that can mix these elements (much like a medieval alchemist) can create real magic and results.

The first element is what I call, “We exist!” In other words, we are a company actively in business providing the service that your prospect needs sometimes. Like the blind pig that finds a truffle once in a while, salespeople representing these companies can find business in much the same way—by luck. Usually, the prospect’s current vendor has dropped the ball and since the salesperson happens to be in the right place at the right time they get an opportunity.

Salespeople that go into the market with the “We exist!” strategy have a tough row to hoe and not much sales “game”. This is the domain of the “show up and throw up” “me monsters” that simply hit the market attempting to trade donuts for dollars. This is by far the weakest sales position.

The next aspect is the value proposition. Simply put, having a valid and relevant value proposition puts your company in a class many steps above the “We existers”. It gives the salesperson a reason for the prospect to listen further and explains why the company is different and better than the competition and provides reasons for the prospect to switch!

Simply put, modern sales organizations must have a powerful and well-thought out value proposition and train their salespeople how to effectively communicate it.

The third aspect of sales performance is the salesperson’s “fu”, as in Kung-fu. Kung-fu usually translates as skill developed over time with hard work. Another way to think about this (depending on your generation) is mojo, moxie, chutzpah or the unique personality, persuasiveness and communication skills that the salesperson uses to “own” the value proposition. It is style but style with commitment and intelligence.

What’s great about “fu” is that each salesperson’s fu (if they have it!) is unique to them. It reflects their personality, their style, their life experiences, their approach to life and work and really, their essence.

When the “fu” is strong, salespeople can make the “We exist!” strategy work because they themselves and their “fu” is what differentiates the company. Unfortunately, if they leave, so do their customers. And, “We exist!” organizations often have an over-inflated idea of their own value in the market and fail to appreciate the power of strong sales “fu” to support their weak value proposition. These companies often mistreat their salespeople who move on to greener pastures.

Where “fu” really makes an impact is in combination with a powerful value proposition. Now you have compelling reasons for the prospect to do business with you and a great salesperson to communicate the value proposition, develop the on-going relationships and drive the sales program forward.

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Should Your Company Use Job Descriptions?


Why Your Company Should Use Job Descriptions:

The current state of the restoration industry is continually changing with governmental regulations, insurance company overreach, the increasing presence of TPAs and franchises, and the lack of qualified employees to meet the growing demands, to mention a few. The high-performance of your employees is more critical now than ever.

During my time working with restoration contractors, I’ve been asked all the time “should I have job descriptions?  How do I develop them?” My answer is always the same, so to make this a short blog article the answer is Yes!

If you want to grow your business profitably, you should use lean and practical job descriptions that accurately reflect essential job duties, roles, responsibilities, performance results, and compensation required to perform successfully in each position. They will help you build a company that is not owner-reliant and continually requires your day-to-day involvement. It will allow you to build wealth and achieve the goals of ownership that you envisioned when you started your business. This will be one of the most critical business decisions you will make!

Many restoration companies are on a treadmill and the owner and employees are running as fast as they can to meet increasing demand for their services. I find that many are in the “Ready – Fire – Aim” mode while continuing to deal with the day-to-day chaos. Their hiring process becomes “just hire the warm body and get the work done, and they will learn on-the-job or we can train them when it slows down.”

What is a Job Description?

Simply stated, a job description is a useful, plain-language tool that describes the tasks, duties, functions, responsibilities, and compensation range of each position on the Organizational Chart. It outlines the details of who performs a specific type of work, how that work is to be completed, and the frequency and the purpose of the work as it relates to the company’s mission and goals.

The stresses and responsibilities that come with running a small to medium size restoration and reconstruction business aren’t so “small.” In fact, there are a lot of issues that quickly arise when systems and processes are not properly implemented. It all starts with the expectations you set for your employees from the beginning.

Here are 6 typical problems caused by inaccurate or nonexistent job descriptions:

  1. lack of employee performance measurement,
  2. chance of hiring someone without the necessary skills, experiences, and personal qualities for the job,
  3. greater risks for discrimination lawsuits,
  4. difficult for employees to know what is expected of them,
  5. too many delegated tasks essentially fall under the “other duties as assigned” umbrella,
  6. difficult to know how to train and develop employees.

One of the most important systems in your business is your Organizational Structure, which was discussed in last month’s blog article. It is an important stage in developing accurate job descriptions for all the positions (boxes) on the Organizational Chart. The key is to develop job descriptions around the functions, e.g., Sales, Marketing, Operations, and Administration of the business and not the people in the business. Additional examples include Marketing Representative, Operations Manager, Production Manager, Project Manager, Estimator/Sales, Senior Technician, Customer Care Coordinator, Full Charge Bookkeeper, etc.

There are effective strategies to let employees know what’s expected of them without coming off as a tyrant. It is critical that you understand that without job descriptions, or with poorly written ones, your team simply cannot function at its best.

Here are four benefits of accurate employee job descriptions:

  1. Increased Productivity – employees that have a clear understanding of their daily responsibilities, as well as their short- and long-term goals, work more efficiently.
  2. Better Team Atmosphere – detailed job descriptions prevent the “That’s not MY job” argument among employees.
  3. A Simpler Promotion Process – job descriptions provide the standard and act as an effective measurement tool.
  4. Reduced Turnover - people tend to stay with jobs where they feel there is a future for them, a chance for professional growth.

Taking Action Now:

Send me an email to request your FREE job description for a Project Manager. You will be glad you did!

If you are ready to streamline your restoration business by implementing detailed and accurate job descriptions, consider Business Development Associates as a resource to help you design and develop them. We have more than 3 decades of industry experience and have helped many of our clients build high-performing organizations.

At Business Development Associates, we believe that every restoration business owner has the right to expect that their company can deliver to them what they want out of life- freedom and the ability to create wealth.

Make it a prosperous month!  Stay tuned for next month’s article to learn how to develop an organizational chart.

John Capponi, CR
Operations and Management Consultant
Business Development Associates, Inc.
john@gobda.com
Cell: 407-745-7698

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The Importance of a Good Organizational Structure to Growth and Profitability

One of the most common reasons why some restoration businesses fail is because they are unable to maintain a balance between sales and operations. In other words, they do not generate enough sales (jobs) to support salaries and other fixed costs throughout the company, or sales are too high and operations cannot keep up.

Most restoration businesses are in the former category, i.e., they need to sell more jobs to support the overhead of the company. So often I hear, “All I need are more sales. I solve that problem, and all my problems will be gone.” For those restorers in this category, you would be surprised to hear how devastating it can be to have too many jobs. Without the proper infrastructure in place, too many jobs will create chaos in your company. In fact, too many jobs can almost always break a company faster than too few sales.

So, let’s start off by providing a solution to creating a company organizational structure that has the adequate production capacity to handle the amount of jobs being generated by your marketing and advertising functions.

Organizational Structure Simply Defined:

Organizational structure is the method by which a company communicates, distributes responsibility, and adapts to change. According to the Encyclopedia of Small Business, “An organizational structure defines the scope of acceptable behavior within an organization, its lines of authority and accountability, and to some extent, the organization’s relationship with its external environment.”

To have a business that is sustaining profitable growth, a restorer needs to keep their company’s structure dynamic and effective so that it can respond to the ever-changing environment of the restoration industry. Keeping the structure lean and productive will allow the company to adapt and change so that it can grow and survive.

Problems Caused by a Bad Organizational Structure:

Without a formal organizational structure, employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what.

Evidence of a bad organizational structure include:

  • poor communication
  • reduced productivity
  • high employee turnover and hiring problems
  • misalignment between technology and decision-making
  • poor customer service
  • and the inability for the business to grow.

Why Organizational Structure is Important:

A restoration company’s organizational structure is what maintains the hierarchy in the business and provides guidance and clarity on specific employee issues, such as managerial authority. Its purposes are to:

  • facilitate internal communication
  • make business decisions
  • perform required tasks
  • provide exceptional customer service
  • and keep the company running smoothly.

Benefits of an Effective Operational Structure:

A well-designed organization structure promotes success and facilitates company growth and profitability. Designing an organizational structure helps the restorer:

  • identify talent that needs to be added to the company
  • ensure production capability to accomplish the company goals
  • clearly defines reporting relationships
  • provide each employee with a job description and standard of performance
  • create a framework for establishing compensation for each position
  • and provide high-performing employees room for growth.

How to Create an Effective Organizational Structure for Your Company:

Determine what your company’s organizational structure looks like today. Create an organization chart that lists all your current key functions and management positions. Include the order in which they supervise and are supervised by others, and titles and job descriptions. Review this chart and determine whether your employees know their exact duties, who they supervise, and whether they are being used to their maximum potential.

Create a “Dream” Structure:

The easiest way to begin creating the optimal organizational structure for your business is to design one as if you have not opened your doors yet. Doing this allows you to create a management and position structure that best suits the needs of your company’s model, rather than one that best suits the needs of your current staffing levels. Pretend you can structure your organization without regard to any employees you currently have or honoring any commitments you have made to see how your company should be set up, then work from there to tweak the organizational structure based on the realities of what you have in place.

Organize by Key Function:

Look at the various functions your company has and create your organizational structure to ensure each one is properly staffed. Typically, a restoration business has key functions, i.e., marketing/sales, operations, and administration/finance. Even if you are using subcontractors for production, a manager must oversee their performance.

Many small companies give multiple responsibilities to different department or function heads to save money, such as one employee filling the positions of production manager and project manager. Other examples are combining bookkeeping and human resources, marketing and sales, or office administration and information technology.

Create a Chain of Command:

Your organizational structure should clearly designate who each employee directly reports to. This prevents departments from competing and employees from going over the heads of their supervisors or believing they do not have to follow a co-worker’s direction because that co-worker is not a superior.

Communicate Your Structure:

An organizational structure is not a top-secret document and will work best if every employee, down to the lowest worker on the chain of command, knows your company’s structure. Have a meeting to explain the reason you have created the structure, how it will benefit the company, who reports to whom, and any grievance procedures.

My Personal Mission:

Is to serve the owners of small businesses that suffer from sleepless nights, make little to no money, and have people problems. I help them increase year-over-year performance and profits, build high-performing teams, and get some time back for themselves.

At Business Development Associates, we believe that every restoration business owner has the right to expect that their company can deliver to them what they want out of life- freedom and the ability to create wealth.

Make it a prosperous month!  Stay tuned for next month’s article to learn how to develop an organizational chart.

John Capponi, CR

Operations and Management Consultant

Business Development Associates, Inc.

john@gobda.com

Cell: 407-745-7698

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