What does structuring your business mean and why is it important that you structure it right?
Structuring your business means that you've identified the tasks and processes that must be carried out properly in order to keep your business running. It means assigning those tasks and processes to specific individuals and giving them the tools and time to perform the tasks properly.
Structuring your business means getting the right people assigned to do the right work.
You might be amazed to learn how few businesses are structured for success.
Rarely have the business owners I've met been structured for success. When my consulting team dove in with new clients, we almost always had to start off with a restructuring of their staff.
It was almost as if we were a chiropractor and they needed a major adjustment to eliminate their aches and pains.
Several critical tasks would have been left unassigned. Tasks would have been grouped in strange ways that hindered smooth work flow. Employees would have been poorly fit to their positions based on personality or skill set.
Regarding fit, a good analogy is that catchers make horrible shortstops and shortstops make horrible catchers. From a business perspective, great salesmen make horrible estimators and great estimators make horrible salesmen.
Once we had re-aligned our clients' businesses, they became much easier and fun to run.
The worst structuring problem of all is where there is no structure. Everything rests on the back of one person.
That individual would have inserted himself or herself as THE essential decision maker; approving all decisions (can you say micromanager); trusting no one...and holding up everything.
He or she would be horribly overloaded and holding things up for everyone else. Hopefully, you've learned not to do that yourself nor allow someone working for you to do that.
Let's get to the solution: how to structure a construction company. Today, we'll focus on the basics.
Every business, no matter how big or small, must have three roles performed adequately: sales, operations, and administration/accounting. Failure to perform any one of these three effectively will hold back - and eventually kill - your business.
The challenge for small businesses is staffing those three positions. Few can afford to support three full-time people for those roles.
This explains why so many small businesses have one spouse running the books while the other runs the staff and performs the other work needed. Effectively, they are filling the three roles with one wage (since all income goes to the same family). A very affordable approach, but very limiting in its ability to grow the business.
The downside to having only one or two people filling these three critical roles is that one of the roles usually gets shortchanged.
As you have heard a thousand times, you need systems to grow your business. What you probably haven't heard, unless you've been reading my articles since the beginning, is the current position holder's duty is to get his or her systems figured out and documented.
You just can't buy off-the-shelf systems that are ready for prime time. Whether you create them from scratch or greatly modify the ones you purchase, they must be customized for you and your business.
The best way to systematize your business is to put someone in the role, let them succeed, THEN document how they are succeeding.
- First structure.
- Then succeed.
- Then document and systematize.
- Then staff and grow.
Now, we're back to the importance of structuring your business for success. Then reap the financial rewards of owning a business that others can run for you.
Ron Roberts, The Contractor's Business Coach, teaches contractors how to turn their business into a profit spewing machine. To receive Ron's FREE Contractor Best Practices Newsletter visit www.FilthyRichContractor.com.