Seasons Greetings!
My wife Deborah (perhaps the world’s most patient and forgiving woman) perceives fall to be the slow reveal of winter, so she has come to dread what I find beautiful – the softening light, the cooler air, the darker mornings. I know that winter awaits and with it the challenge of snow, ice, chapped lips and hat head; but while this slide into winter depresses my wife, I personally love the seasonal changes here in New England – it’s the main reason we moved here from San Francisco back in 1994, a lifetime ago. For me, winter is the culmination of the year, as well as the promise of a new one.
If summer represents positive cash flow, paying down long-term loans, investment in new equipment, vehicles, and training, (making hay while the sun shines), winter is the perfect season to reflect and to plan. If summer offers infinite possibility with its lazy 4-6 month exterior schedule, with the overwhelm of opportunities, the confidence lent by a high close ratio and the perception, real or imagined, that our busyness means we know what we are doing, that our share of the market is secure and growing, then fall and winter is the harsh reminder that the market place punishes the complacent, the arrogant and the presumptuous.
The season of plenty is slowly replaced by the hustle of working to find enough interior work to avoid layoffs, the churn of staffing smaller projects, the sharpening of pencils as we feel the imperative to close the deal; welcome back to the real world.
This seasonality of business is sobering but healthy, and this transition into winter is one I embrace.
Reflection
A friend likes to reference ‘project autopsies’ – his macabre but realistic assessment of a project. We apply a similar but kinder exercise on a monthly basis as we look back on the metrics and key performance indicators (KPIs) that illustrate the fiscal health of our company month to month. Taken in isolation, this information can be both exhilarating and alarming as billing cycles and timing can punish one month’s performance to the benefit of another. Reviewed quarterly, this information offers greater accuracy and a more sober assessment; reviewed annually, we start to see trends.
- Has our average wage increased this year?
- Is our hourly rate sufficient to guarantee profit?
- Which projects and foremen are generating the most profit?
- Are we spending within our budget or did we blow past it with too many new Festool vacuums?
- Why are we spending more than budgeted on vehicle repairs?
- What is our close ratio?
- Did we hit out gross profit and net profit targets?
- Can I give myself a raise?
It’s important to track KPIs on an annual basis, and to compare them to both past performance as well as budgeted or projected performance. This early warning radar reveals issues or problems that might otherwise be lost to the noise of the tactical demands of the business. Truth be told, this like subjecting your business to an MRI – the results can be both affirming and terrifying. But we’re in business to stay in business so we might as well uncover and face the truth.
Planning – Strategic
We’ve all been exposed to countless homilies and adages that remind us of the importance of planning, but most of us avoid this like the plague.
“Failing to plan is planning to fail”
“If you’re not growing, you’re dying”
“Start with the end in mind”
I resisted planning and its evil twin, budgeting, for years, to avoid accountability and because I felt there was no value to the exercise. I now embrace and value the exercise of planning.
Planning is not limiting the future, nor is it the avoidance of opportunity and spontaneity. If we plan for 10% growth and achieve 15%, this feels great – we don’t limit our growth based on our projection – we simply use the budget and plan as a map of what we hope to achieve.
Planning – Tactical
There are less grandiose components to planning of course – the tactical demands of equipment maintenance, proper storage and winterization of exterior season equipment, reorganizing and repainting the shop and office to keep painters working during gaps in the schedule. We also use winter to train existing and new staff – we refresh and reset technical training using the excellent PDCA Craftsmanship Training Tips, the COPs (Craftsmen Operating Procedures), we invite in manufacturer reps to train on new products and tools.
This fall we’ve invited Nick Slavik (does he need more introduction than his name? I think not … ) to present on new construction and kitchen cabinetry painting – we limit attendance to foremen but then invite them to become the trainers as they push what they learn onto their teams in the field as well as in the shop. We’ll also refresh on RRP protocols and general safety; we’ll identify any painters whose blood lead level has increased during the exterior season and bring them in for additional training.
Finally, but most significantly, we’ll all take a breath and relax as we head into the winter. Sure, in some ways churn increases because winter projects tend to be smaller and so require more sales, more transitions and back end support. But somehow this easing into winter is also a time to slow down, reflect, rest and then re-engage in time for spring, strengthened and inspired by another busy season’s accumulated experience.
We’ll even throw in some paintball, a Thanksgiving lunch and we all look forward to taking the week of Christmas to New Year off, fully compensated of course – one of our many employee benefits.
Nigel Costolloe is the president of Catchlight Painting, a full-service residential painting company serving the Greater Boston Metropolitan Area. He is active regionally and nationally in the Painting and Decorating Contractors of America (PDCA) as a leader, speaker, and mentor.