4 Keys for Breakthrough Success in Your Contracting Business Beyond the Million-Dollar Threshold

September 6, 2018
Category: Be a Highly Effective Owner,Build an Accountable, Self-Sufficient Team,Define Your Vision and Plan,Management,Techniques and Solutions

Having a million-dollar or larger business is the dream of many business owners. It’s a sign that you have really made it; the point most owners think there will be enough money and time to do what they want when they want to do it. That’s the dream. The reality is often quite different.

For many owners, growth above the million-dollar threshold brings more headaches, slower growth, less profit, more time on the job, less free time for your family, and less time to do what you want.

Why is the Dream of Running a Million Dollar Business So Different from Reality?

When you were a startup, or a small company with one crew, your success depended on your ability to do everything, manage everything and be the go to person for every decision. In fact, businesses don’t get off the ground unless you’re a multi-talented, highly motivated, hard-working, achievement oriented, do-it-all owner.

But as your business grows it gets increasingly more complex. By the time you reach the million-dollar threshold, there are so many competing priorities, customers, employees, and moving parts for you to manage. These competing priorities make it virtually impossible to do everything effectively.

Yet most owners don’t adjust how they manage to adapt to the new challenges of leading their larger, more complex, million dollar or larger business. And this is the root cause of many of the problems owners face at, and beyond the million-dollar threshold.

Being the go-to person for everything, which worked so well when you were smaller, has now made you the bottleneck in your business.

You heard that right, you’re the cause for stalled growth. You’re the reason profits slip.

You’re why hours at work, stress, and frustration are growing—because everything has to go through you and there’s not enough of you to go around.

You Need to Master a Completely New Way of Running Your Business.

Have you ever heard the saying, “What got you here won’t get you there”? This is the key idea I want you to take away from this article. Your success beyond the million-dollar threshold depends on your ability to learn new management skills and techniques. You need to master a very different way of running your business.

Here are the four most important things you need to master for success above the million-dollar threshold:

1. Redefine Your Role from “Doer” to “Leader”

The first—and maybe the most important thing—you need to do to be successful above the million-dollar threshold is to shift the way you think about your role in the businesses. Your job is no longer to do the work and be the go to person for everything. Your job is to lead the business and manage your team. Specifically, your job is to:

• Chart the course for the business: develop the vision and plan for the future
• Build a strong self-sufficient team. Then give them the structure, support and accountability they need to accomplish their goals.
• Manage high value clients and high value projects (e.g. creating new services, opening a new location, buying a competitor, improving operations) that only you can do for the business.

Ideally your role will gradually shift from doing, to leading and managing, as you grow. By the time you hit the million-dollar threshold, 50% of your time should be spent leading and managing. And when you reach $2.5 million leading and managing should be about 90% of your job.

As your role evolves, and you build your self-sufficient team, its best to gradually delegate the “doing” parts of your job to the people who really should be doing them. If you delegate these doing tasks gradually over time, it will be relatively easy for you and everyone else to adjust.

2. Build Your Business with a Plan

To lead your business, you have to have a clear vision for where you’re going and a road map for the steps you need to take to get there. You can’t manage the businesses day to day like you used to. You need to look ahead to anticipate and prepare for the new twists and turns in the road.

Having a vision and a plan can help you eliminate many of the problems which eat up your time and keep you from stepping into your leadership role. That’s why one of the first things I do when I start working with a new client is help them create a 5-year plan.

Don’t let the concept of a 5-year plan scare you. It isn’t that hard to create. Here are four simple steps to get you started:

• Step 1: Envision the business and life you really want. The first thing you need to do is envision the business and life you want 5 years from now. The more clearly you can picture it the more you will be able to map out the steps you need to take to make it a reality.
• Step 2: Map out your annual growth goals for the next 5 years. Next, break your 5-year goals down by year. This develops a clear path to follow to get you to where you want to go.
• Step 3: Map out the implications of your growth for your business. With your annual growth goals in place, now think through the implications of this plan. How will it impact other areas of the business? What new management and support staff will you need? How will your role change? Etc. Answering these questions will help you sidestep problems and keep your growth on track.
• Step 4: Turn your projections into an annual plan. Take your next year’s goals and break them down by month so you have a clear path to follow. Next, think through the obstacles, challenges and other priorities you will need to overcome to achieve your goals. Build action plans for how to solve the most important ones. Now write it all down and follow it.

There is huge power in looking forward with a 5-year and annual plan! Your plan, is a must-have leadership tool that enables you to anticipate what you need to do each year to keep your business growing profitably. By preparing in advance, you’ll avoid countless problems and fires which would divert you from leading and managing. You’ll avoid anything which would force you back into the “doing” mode!

3. Run Your Business Through Your Management Team

To build a growing, profitable, smooth-running business, beyond the million-dollar threshold, you need to run your business more like the CEO of a large corporation.

Corporate CEO’s have mastered the art of running highly complex companies with hundreds of thousands of employees by breaking the business up into parts (e.g. sales, marketing, operations, HR, finance) and entrusting key managers with full responsibility to run those parts of the company. Their job as CEO, then is to run the business through this team of trusted, key managers.

To step in to your CEO role, you need to build an empowered management team you can trust to take ownership of responsibilities you used to do yourself. Here are some of the most important steps you need to take to make this happen:

• Define the right management roles for your company so every priority in the company has a clear owner and nothing falls through the cracks.
• Staff your management team—either promoting from within, hiring, or outsourcing. You want to staff a team with the background and skills to become trusted, key managers.
• Ensure each manager is crystal clear on their role, the results they are responsible for, and how they will impact your company’s success.
• Develop your management team’s management skills to help them take full ownership of their function, successfully manage their people, and achieve their goals.

Creating a trusted management team does not happen overnight. As you grow, you should start by adding one manager—either someone to run operations or someone to take over sales. Then gradually add other managers.

Building your management team will also take significant time and support from you to help them transition effectively into their roles. But the results are worth it. You’ll dramatically increase the capacity of your business to grow and free up time for you to do the other things that you want to do in your life.

If you don’t build your management team, your business will flounder and your headaches and hours at work will grow. It’s that important.

4. Replace Hands-On Management with “Hands Free”

Since your million dollar or larger business is too big for you to manage it all yourself, your success depends on learning how to replace your old, hands on, manage-by-doing, micromanagement style. You will need to replace it with what I call a “hands-free management system”. This system still gives you plenty of control. I call it “hands free” because you can do it without ever leaving your office!

To implement the hands-free management system, you will need to:

• Create more structure for how you want the work done (e.g. policies, procedures and training) to replace your need to be there. This makes sure everything is done right. This added structure and training to will make your results more consistent, predictable, and better. The structure will guide your management team on how to do things the way you want them done!
• Create a system of performance measures (such as profit per job, estimated hours vs. actual, estimated material costs vs. actual, sales leads by source, sales close rate ,etc.) to track and monitor what’s happening in your business and the results members of your team produce. These performance metrics will give you a “dashboard” enabling you to spot what’s working and not working in your business without having to drive around and visit each job. You can then focus your and your management team’s energy and attention where it is needed the most.
• Hold individual weekly meetings with each of your management team members to monitor their results, hold them accountable for achieving their goals, delegate tasks, and to coach them. Having regular weekly meeting with each of your managers will give you the opportunity to spin them in the right direction for the week which makes it easier for you to let go.

Mastering hands free management is absolutely critical for your success. In fact, a recent HBR article said: “the inability of many owners to let go of doing and begin delegating and managing explains the failure of many businesses.” It will feel awkward at first, but if you stick with it you’ll be amazed at how easy it is to let go of doing, and let others take responsibility for running parts of your business while still having full control of what’s happening in your business.

Implement these 4 keys and have breakthrough success!

Beyond the million-dollar threshold, how you run your business makes all the difference in the world. If you master the 4 keys I laid out here you can have a smooth running, profitable dream business. If you continue to run your business the way you did when you were smaller, then you’ll end up with a slow-growing, problem-filled business nightmare. The choice is yours.

HINT: Implement the 4 keys and take the dream business! You’ll be glad you did!

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