Extra Edition / Business Management

Hot Topics, Cool Solutions 26: Expanding Into Other Trades

April 3, 2006
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Al Levi
Editor's note: Consultant Al Levi helps HVAC and plumbing contractors run their businesses with "less stress and more success." He has agreed to let us share with readers of The NEWS some of the questions he gets and the answers he provides. The focus is strictly on problem solving and handling the day-to-day operations of a successful contracting business.

To send Levi your own questions, which if selected will run anonymously, send him an e-mail at info@appleseedbusiness.com or fax him at 212-202-6275.

This column is meant to be a resource only. Please check with your own trusted business advisers, including your own attorney, to make certain that the advice here complies with all relevant laws, customs, and regulations in your area.

EXPANDING INTO PLUMBING AND ELECTRICAL

Dear Al,

I'm tempted to expand beyond the heating and cooling business into the plumbing and electrical businesses.

It's not that we're doing badly I just figure why not.

Are there pros and cons to doing this?

Sincerely,
Trade Expansionist

Dear Trade Expansionist,

It makes sense to think about expanding into different trades. But, only if you've mastered the trade you're in. If you're making money in the heating and cooling business, you need to ask yourself, "Why am I really interested in entering the plumbing and electrical businesses?"

If your answer is, "There's a lot of money to be made if we did it," or "We want to lock our competition out of our clients' business," I agree it's smart to consider adding the plumbing and electrical businesses.

Another great reason for doing it is you'll be offering your clients one-stop shopping for their basic home services. But one big reason for not doing it is if you're unprepared to do plumbing and electrical service the right way. This will require a lot of expertise that you may not have. You can fill this void by hiring someone who does or by partnering with someone who's already in these trades. But to enter any other trade than you already do, you must have written procedures in place for how to handle the tasks each trade requires.

You'll also want to dedicate the time for cross-training your existing staff. Unfortunately, a lot of technicians are set in their ways and may not welcome having to do anything other than heating and cooling. Plumbing can be less than glamorous to some.

In his book Good to Great, Jim Collins talks about something he calls "The Hedgehog Concept." He asks us to consider the following three and see how they work together:

1. At what can you be the best in the world?

2. What drives your economic engine?

3. About what are you deeply passionate?

Just because something is your core business, just because you've been doing it for years or perhaps even decades, does not necessarily mean you can become the best in the world at it.

Just because you want to do some new type of business does not necessarily mean you can be the best in the world at it.

I've found that when facing tough decisions like the one you're facing I needed to take my time and think about what I was going to do. What I suggest is you develop this excellent business habit. I call it, "Business Meditation." It requires that you spend 15 to 30 minutes each day thinking about what business you are really in, what business you should stop doing, and what business you should be in. This helps you and the company stay focused and flexible.

With time and focus, the answer about adding plumbing and electrical to your heating and cooling business will be a whole lot clearer.

Regards, Al Levi

DRESSING PROFESSIONALLY

Dear Al,

My wife is my partner in business and she's always nagging me that I need to dress better. I'm used to working in the field and turning the wrenches. What's wrong with a company tee shirt, blue jeans, and work boots?

Sincerely,
Clothing Challenged

Dear Clothing Challenged,

Your wife is right!

One of the things I stress with new clients is the power of getting dressed the right way when you come to work. You want to set the tone. Be professional. How you dress will let your staff and your customers know you see yourself as someone who takes pride in his appearance.

The facts of life are that whatever way you dress as the owner, the employees will dress one level less. So starting out looking like a worker, rather than a professional businessperson, creates problems for the company.

We may say differently but we do judge people by the way they dress.

I live in Phoenix and I moved from New York. When I went looking for a doctor out here, how do you think I would have reacted if my new doctor met me for the first time wearing a Hawaiian shirt, shorts, and sandals?

The biggest positive effect is on you. You will quickly see yourself in a better way and it will be reflected in how you do your job.

Regards,
Al Levi

Al Levi of Appleseed Business specializes, as his Web site says, in "Making Contractors' Lives Less Stressful and More Successful." Through private workshops, on-site assessments, customized operating manuals, and staff training programs, Levi delivers the benefit of the experience he gained from years of operating a large family-run HVAC and plumbing business. Learn more by visiting www.appleseedbusiness.com. You may also contact Levi by e-mail at info@appleseedbusiness.com or by fax at 212-202-6275.

Publication date: 04/03/2006

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