Contractors Deal With Growing Pains: Industry Roundtable

These contractors have learned, however, that along with that much sought after increased cash flow can come an equally increased number of management challenges and headaches. Insurance costs? Up they go. Employee turnover? It too can increase if the employees aren’t treated as well as they are accustomed.

These, along with other challenges facing the contractors’ businesses, were among the conversation topics at this roundtable event.

KEYS TO MANAGING TO $1 MILLION:

“The number one thing is to realize the changing role of the leader, who has to become more concerned with the business issues of the business and develop formal systems that the business may not already have.”
– Chris Kujawa, Kujawa Enterprises

“Sometimes trying to do the work, make the right decisions and figure out where you’re going is hard to do at the same time.”
– Michael Currin, Greenscapes

“The real challenge is the transition from production to managing and quickly being able to identify people who can manage production for you. It’s difficult because good field people aren’t always good managers, so we look for people with the ability to make the right decisions on their own.”
– Michael Byrne, Byrne Brothers

“Managing growth is about keeping focused on what you do well and never being afraid to develop people from within the organization.”
– Phil Lundy, Northwest Landscape Industries

“The biggest thing for us is making sure our profitability and loss margins are staying in line. You have to have very accurate financial statements and be receiving them in a timely manner. ”
– Chuck Richardson, Gator Landscaping

“You have to be able to manage the information and cut down on the paper – find the redundancies and eliminate them.”
– Frank Mills, Hillenmeyer

“We’ve computerized everything with job codes so we’re automated from doing the work to billing to payroll.”
– Bill Gordon, Signature Landscape

KEYS TO MANAGING GROWTH BEYOND $1 MILLION:

“The management approach should stay the same. Focus on the people. An owner going from $500,000 to $1 million or even $5 mil-lion has to have people to depend on, especially in the middle of the company.”
– Lundy

“We keep the employees in tune with the growth and what it means for them and the company. Then we can look back a few months and identify challenges we’ve conquered so they understand that they won’t see progress in just a week’s time.”
– Byrne

“A critical area for us was between $2.5 million and $3 million. It was difficult to maintain our guidelines here because we had to hire a number of additional middle managers.”
– Richardson

“We used to have our division or production managers responsible for hiring, but they wouldn’t hire people better than them. Now, our upper management is doing the hiring.”
– Mark Arrimour, Pennink Arrimour

POSITIVES & NEGATIVES OF CERTIFICATION:

“It forces out the non-qualified companies and creates more equal bidding situations.”
– Byrne

“A certification challenge for us is dealing with these issues for different offices located in different states and the different regulations for each one.”
– Tim Lynott, Chapel Valley

“Certification drives up the cost of labor, but it also levels the playing field.”
– Larry Neuhoff, Landtrends

“It’s great, but my fear is that we’ll make it easier for everyone to get, thereby diluting the value of it. It needs to be something that is truly earned to have value to it.”
– Kujawa

“It makes sense if we can get it nationwide, but I don’t think we’ve impacted our customer base with it like we thought we would. I’d like to see it get to the point where customers only accept bids from certified companies.”
– Byrne

STRATEGIES FOR KEEPING INSURANCE COSTS DOWN:

“The first thing is to work with the insurance company and get loss control specialists in to visit. This creates a mindset among the employees that this is an issue the company has to address.”
– Kujawa

“We have a safety director who goes to the job sites to make sure things are being done properly.”
– Lynott

“We have a safety committee that meets monthly, and anyone who has an accident has to explain what happened to that committee. Our mod rate has fallen from 1.35 to .79 since that started that a couple of years ago.”
– Arrimour

“We had a workers’ compensation problem because we didn’t understand how we could control it by working with the employees and our insurer.”
– Byrne

“We have a raffle for employees who haven’t missed any days that month for every day we don’t have an accident. We put more up for raffle the longer we go without an accident, and this has definitely reduced our claims.”
– Peter Bowman, Four Seasons

“We have pre-employment drug testing and we drug test anyone who is involved in an accident.”
– Lynott

“If a company only stresses working fast-er, although you may never say so, you somehow diminish safety issues. Time is mon-ey, but not at the risk of injury.”
– Kujawa

MOST EFFECTIVE TRAINING TECHNIQUES:

“We have a corporate trainer that gives every new employee eight hours of initial training before putting them in the field.”
– Lundy

“Year-round employees receiving training in January and February with videos, hands-on demonstrations and instruction from foremen and supervisors.”
– Arrimour

“I think the two-year schools can offer us a lot of help developing better materials. The other thing is that people need to be trained to share information. A great ‘doer’ isn’t necessarily a great trainer.”
– Kujawa

“We take the employees through a job and compare things we’ve done to what we want the property to look like. We’ll even go on competitors’ properties if it’s good work. This is much more effective than just telling them what to do.”
– Byrne