Earlier this year, I was catching up with an installer and talking about business prospects as winter gave way to spring. He reported that new customer calls were coming in daily and he was already booking dates into mid-2022. We reminisced about a time not that long ago when contractors waited by the phone for a new project to come along. We both marveled at the economic turnaround.
It’s often said that a good problem to have is too many customers. This is especially true for the small businesses that make up the installer community. A backlog of work ensures confidence in meeting future payroll, that you might be able to buy a new piece of equipment or meet the ambitious goals in your business plan.
It’s a strange question to be asking, but what happens when you have too much workload? When does it become uncomfortable to tell a homeowner that you can’t get around to a septic system replacement or a new-home onsite system for another year or more? It’s great when your services are in high demand, but too much work on the job board could also have a detrimental impact on your small business.
I get the dilemma. You don’t want to turn down any work coming your way. Yet you don’t want to disappoint your customers with delays, you don’t want to overburden your employees and you may not want to add a crew and then risk having to lay off workers if the current hot economy cools down.
Is your calendar is filling up past a month of Sundays? Here are a few suggestions to cope with the bottleneck and satisfy more customers:
Can you put another crew in play?
This is often the first question contractors ask when the economic rollercoaster climbs to the highest peak. Do your market research to determine if upcoming contracts will sustain a new crew for the long haul. Is your region growing rapidly and is new housing expected for years to come? Is the existing housing stock getting older, indicating a raft of system replacements is on the horizon? Are there more competitors today, or are installers retiring and opening up new opportunities? With enough study, it should become clear whether or not training new workers is a worthwhile endeavor.
Delay your way out of trouble
When customers call, quickly prioritize how soon they will need their project completed. For those wanting replacement systems, suggest helping extend the life of their systems through proper maintenance. This will accomplish something for both sides. The customer will be able to better prepare financially for the project, and you will be able to serve customers with more imminent needs first. Careful juggling and slotting of jobs will allow you to retain more customers and eliminate wasted days or hours as your schedule fills up.
Be choosier about the projects you take on
Narrow the focus of your work to improve efficiency and be more organized about the customers you have to turn away. Let’s assume your team is particularly skilled or enjoys installing either conventional or alternative systems, or working in new construction subdivisions versus waterfront sites, for example. As you get busier, start to specialize and accept work you can do faster based on your group’s skills. Consider partnering with another installer with different skills and interests and trade work back and forth.
Price for profitability
A hot economy might not be the only reason your phone is ringing off the hook. Could it be that you get so many calls because you’re the cheapest installer in the area? A busy schedule presents an opportunity to evaluate your pricing and make sure your profits match your expectations. One of the biggest mistakes a small business can make is not knowing the profitability of every job. If you and your employees are not being compensated adequately, a period of high demand might allow you to rectify that.
Create a smart pecking order
The client list for installers can easily be separated into groups of likely one-time customers and potential repeat customers. You will probably only install one septic system for a homeowner customer — unless they move from house to house frequently. But a residential homebuilder, a subdivision developer or a system designer is likely to reach out to you more regularly. At times of high demand, take on the work of potential repeat customers first, as they may still be hiring you when the construction industry cools down again. You want to keep them happy.
Do what you do best. Hire for the rest.
Recently we profiled an installer who didn’t want the challenges that come with hiring more employees, so instead he starting subcontracting work to other excavating contractors. That strategy might make sense to ease the workload at particularly busy stretches for your company. Concentrate your labor on tasks you do particularly well or have the right equipment for. Hire other contracting companies to complete the tasks they are either more skilled at or have the right equipment for. For example, you might subcontract the site prep and finish work but bring in your crew to place the tanks, pumps, control panels and drainfields.
Under-promise and over-deliver
When you’re wrestling with the calendar, give your customers the worst-case scenario for completing the job. You might think you can get to the project in October but schedule it for December. This allows you to beat the expectations on one hand, or to move up a more time-sensitive project on the other. Pushing the schedule also helps you better deal with unanticipated delays due to bad weather or government approvals. The longer the deadline, the more flexibility you will have to tweak the schedule.
WORDS OF WARNING
When the workload piles up, whatever you do, take care of your staff. Human capital is your greatest asset. Well trained and reliable installers are worth their weight in gold. You are better off turning down work than risking overburdening your crew and having valued employees leave. It probably costs more to find, train and retain a quality installer than you paid for your last piece of excavation equipment. So you want to keep the lines of communication open and watch for signs they are burning out on the job.
Also, be diligent not to cut corners as you try to keep pace with a crowded calendar. Aside from your workforce, you rely most on your company’s hard-earned reputation for quality work. It’s just not worth chasing more invoices if you can’t maintain the level of service your customers have come to expect.
