Whether you are a one man chimney cleaning show by design or not, there are a couple of reasons why you might consider expanding. Firstly, there will come a day when you will not be able to do what you do. Youre body will say “Im done”. If this happens before you have stashed away a retirement plan you may be in trouble. Secondly, expanding beyond yourself can provide you with a better exit strategy. Selling your business can happen but it will require that you build a business that somebody wants to buy. Selling a one man show limits you to a very small buying pool. Selling a business that is turn key is a whole different story.
Going from a one man show to a business with a few employees is a big leap. I have noticed that most people try to get to second base while keeping one foot on first. This is safe and comfortable, but rarely works. Free markets tend to reward the people that take risks. However, here are a couple strategies I have seen work that do not require you to bet the farm:
By cheating I mean tohave some other source of income to support you and/or your family while you ramp up. Fireman are perfect examples. They work 24 on, 48 off. They have a decent salary with great benefits that allows them get their business off the ground. A spouse with a good gig can accomplish the same thing. The bottom line is some sort of other income can get you by when the slow season hits and you have no work.
A properly fundedcompany will be able to make it to the next level. Most entrepreneurs start out gathering enough money to buy the truck and the tools and head out. They do not realize what type of cash flow they need to generate and to sustain what they have much less take it to the next level. Growing a company requires cash. The quote, you have to spend money to make money is very true. Often you need to spend a lot more than you think. You cant hire your first employee by telling him/her that as soon as you generate revenue from their efforts you will pay them. Get an SBA (Small Business Administration) Loan or borrow from a bank. It may require a business plan, but there are some pretty simple tutorials to help you do this. With proper funding you can go out and hire a person to answer the phone or another technician in the field. A properly funded company can grow without pain.
BE ANA PLAYER
In our industry it seems you either have this gift or you do not. It is pretty tough to develop. By an A player I mean somebody that can go out and just set the world on fire. They learn the technical stuff easily. They have the gift of being able to talk to people. They a have the ability to sell. They are strong and can labor for hours. They are motivated, driven and hard charging. They have good business sense. The A Player is a rainmaker. They can make something out of nothing. They can single handedly produce $250,000 to $500,000 in revenue by themselves. The A player can grow organically. They do not need outside funding.
All three strategies revolve around cash. Cash is the oxygen of your company. When your company runs out of cash it dies. The challenge is to find some way to generate a positive cash flow that will allow you to grow. Cash flow is essentially how funds move in and out of your company. Cash is not profit. Many profitable companies have gone under because they lacked cash. The cash can come from your business organically, or it can be funded by an outside source. If you struggle with this concept reach out to somebody to clarify this. Shoot me an email (firstname.lastname@example.org) and Ill be happy to discusscash flow.
I think the most important thing one can do is take some time to really understand where they want to be today, and where we want to be at some point down the road. If you choose to be a one-man show and retire comfortably, your plan should include putting money away regularly. If you plan to build your company with the goal of selling it, you will not build it around yourself, but rather build it to operate without you. This will make your company more attractive to prospective buyers.