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Is Your Business Stuck In The Black Hole?

Navigating the Black Hole in Your Business

Many restoration and reconstruction companies get stuck at certain revenue levels and seem not capable of getting beyond these points. I have witnessed this situation many times as a consultant and coach to the restoration industry over the last four decades.

All businesses go through predictable stall points- what we call “black holes” and some businesses can disappear into them for many years.

According to Greg Crabtree, author of the book Simple Numbers, Straight Talk, Big Profits, the “The Black Hole” for small businesses is between $1 million and $5 million in annual revenue. Greg says that “this is the time in your business growth when you are forced to add employees and infrastructure before you can really afford to. Even if you try to add it as late as possible and maybe even pay for only part-time help, at the end of the day you are going to drive profitability down and risk destroying your business.’

Most black holes are due to insufficiencies in the company’s underlying organizational structure and its resources such as:

  • Not having the right people doing the right things.
  • Lack of effective systems and processes.
  • No formal organizational structure.
  • Inadequate operating capital.
  • Lack of a Strategic Plan.

Do not fall into the “black hole” of letting your company’s revenue growth outpace your internal infrastructure. This typically happens when a company is making revenues between $1 to $5 million in annual revenue because at this phase of the growth cycle a business may need more management staff, production workers, vehicles, equipment, office/warehouse space, and financial resources before it can afford to build the infrastructure.

One key action you can immediately implement is to set aside core capital reserves of 2-5% of your collected revenue and make a transfer of funds to a separate bank account on the 10th and 25th of each month. You will be pleasantly surprised as the money builds up in this account. This will be a great head start to help you on your journey.

To get through the challenges of the black hole here are 6 business building blocks that you can begin to design, build, and implement in your company immediately.

  1. Company Vision, Mission, and Core Values
  2. Financial Rhythm
  3. Organizational Structure
  4. Leadership and Management Teams
  5. Employee Recruiting, Retaining, and Training Programs
  6. Meeting Rhythm

Contact me to discuss your business and how you can avoid being sucked in by the black hole. I will be happy to give you a FREE GIFT of a Business Profit Assessment valued at $997.

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.

May the Profits Be With You!

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

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