Many plumbing contractors, especially those with smaller companies are content. They are content with the size of their companies. Growth is hard, they have concluded. It is hard to find people. It is hard to generate calls. Why bother? Thus, they are content to coast. But whether they want to admit it or not, when they are coasting they are headed downhill. Here are seven reasons why every company owner should seek growth.
1. Growth Protects Your Family
The owner of a one or two-truck plumbing company often believes himself to be fiercely independent and self-reliant. In fact, he is fiercely selfish. What will happen to this company if something happens to the owner? What happens if there is a bad accident, behind the wheel or on the job that prevents the owner from working? What happens if he gets severely ill and can’t work for weeks or months?
His customers will find someone else to take care of their needs. His family cannot. At the least, the company owner who is content to be small should build good medical and disability insurance into his prices to provide for his family should he be unable to work. Of course, most small company owners content with their lot do not think like this. To think like this would ultimately result in a conclusion that growth protects the family. A business that can operate without the owner is a business that can provide for the owner’s family in his temporary or longer-term absence. Growth protects the family.
2. Growth Reduces Dependence
One of the fears of small company owners is the loss of a plumber to a competitor, usually just when work is at its peak. This is usually the time when the employee is working long hours, on-call constantly, burnt out, and getting pressure from home to do something about it. Doing something may means switching companies or it might mean holding up the owner for more money. Either seems disastrous because the owner feels dependent on each plumber.
Lose one plumber in a three-truck company and a third of the productive capacity, the money-making capacity of the company is lost until a replacement can be found and brought up to speed. Lose a plumber in a ten-truck company and the lost is ten percent of the productive capacity. It hurts, but not that bad. Moreover, the ten-truck company likely has an apprentice or helper waiting in the wings.
Each time a company adds a truck and plumber, the leverage of any individual plumber is reduced. The company owner can make decisions based on the good of the company moving forward without fearing what any individual might do or how he might react. Growth reduces dependence on any individual plumber.
3. Growth Leads to Freedom
Owning a small company entails a degree of freedom. If the owner wants to start late during deer season so he can get in a morning hunt, he can. If the owner wants to take off any given afternoon to go fishing, he can. But take off a week? Two weeks? This entails closing the company for the single truck operator and fear of what employees might do in his absence for the two or three-truck operator.
By contrast, the plumber who builds a business that can operate without him—because he has people in key positions with redundancies and controls to protect his interests—can leave without worry. He can take long vacations. He knows a degree of freedom the small company cannot even imagine. Growth leads to freedom.
4. Growth Makes Exits Possible
At the moment, many plumbing company owners are taking advantage of private equity’s interest in the service trades and choosing to make lucrative exits. This is choice not available to the small company owner. He will never be able to sell, or at least, not for much. Thus, he better save and invest because when he reaches the day where his body is so broken down that he can no longer work, he will not be able to live on the proceeds from the sale of his life’s work.
Buyers of small companies are purchasing customer lists because nothing else is of value. There is no value in a business that cannot exist without the owner. Buyers want businesses that can operate without the owner and in today’s market, they are paying a premium for them. Plumbers who grow their companies to the point where they are not needed for the day-to-day operations have an array of financial options available. Growth makes exits possible.
5. Growth is Natural
Walk into your backyard and look around. Everything is either growing or dying. This is nature. This is natural. Growth, whether in nature or business is the natural way of things. To fight it, to deny it is to deny nature itself. This is why a growing business feels right. In a stagnant business, the sense of decline is pervasive. Growth is natural.
6. Growth is More Fun
Visit any city or town where there is growth and a sense of vibrance and energy is everywhere. These places are fun. They are exciting. By contrast, visit a city bleeding population. The decline hangs over the town like a dark, overcast sky. It is depressing. This is not limited to municipalities. It applies to companies as well.
Growing companies have energy. New goals are being set and met and exceeded. The future is one of possibilities. Optimism is everywhere. People are excited to go to work. There is laughter in the workplace. The reason is simple: growth is more fun.
7. Growth Begets Growth
People are attracted to growing enterprises. These are the places where people want to work. The recruiting headaches that small company owners encounter are lessened in a growing business. The growth-oriented company is not only more attractive as a place to work, it attracts optimistic, growth-oriented people. These people lead to more growth. The growth gains inertia. Growth begets growth.
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