I talk a lot about how to get more work using marketing and sales. And I talk about how to get the work done – build your operations machine with systems and technology so your team can do the work with few defects, on time, and within budget, so it’s profitable work.
But an issue that everybody who grows their business confronts, is the issue of capacity.
Now, I’m a business coach for tradies and I’m all about growth and structure and systems. The reason for that is that when it’s bigger and structured and systematised, it’s a nice place to be. And capacity is a constraint on growth, isn’t it?
If you don’t have enough capacity to do the work, it’s hard to grow and take more work on.
Lots of my clients worry about this. If a number of bigger jobs come on at the same time, you have issues. It’s harder if you’re a project trade and your projects are large. That’s a sudden large increase of capacity needed if you win a few at once.
Sometimes you can manage this by scheduling jobs and shuffling your teams around and that’s great. You’re good at that and it’s not what I teach (I suspect you’re better at managing resources like that than I’ll ever be).
How to increase your capacity
I want to talk about how to increase the capacity of your business so you can grow without taking too much risk.
You’re a trade business – you grow by having people to do the work. Your capacity is limited by how many people you have, tradespeople, labourers and apprentices to do the work.
1. The best way to have a good team of committed people is to have permanent employees – you’re making a commitment to them and you can ask for more in return.
But this is risky and scary. If there’s no work, you still have to pay them, don’t you?
2. Subcontractors are an attractive alternative. You can increase your capacity by bringing in subbies who work for you sometimes. This is nothing new. I’m sure you’ve already thought of it, but lots of my clients have become frustrated with using subbies. The care factor is missing and quality suffers.
But the step of hiring a whole new person is a big one and not taken lightly.
How to hire people
So what to do? Some options:
1. Hire a tradesperson and work like mad to train them and do marketing and sales so there’s enough work for everyone. (This is my favoured choice – it’s the long term, solid investment).
It’s possible – if you have enough money – to manage the period between hiring them, and revenue is growing enough to pay for them.
2. Use subcontractors as a stepping stone. You can hire someone or a business for a specific job with a fixed price quote and a beginning and an end.
Here’s the thing. You need to:
- Hire them just as carefully as if they were to be hired as an employee (make sure they’re good).
- Make them do it your way, use your procedures and systems.
- Manage them like employees and look after them and motivate them like employees.
- Manage the outcome and hold them accountable for producing the outcome you need (the one you agreed).
The mistake people make with subbies and with employees is to throw work at them and they do nothing else except, “Don’t do that, do this instead”.
And that is how you can successfully grow your capacity to do work without having to hire a whole person.
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