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Building a business: How three tradies are, literally

If your business’ business is entirely outside the office, how do you go about doing all the essential office tasks that are necessary for your organisation to flourish? We asked some tradies how they manage all their business essentials in between working on site.

When every day is taken up with managing multiple staff across multiple jobs, not to mention liaising with clients, dealing with issues, ordering supplies and fielding phone calls, any business could be forgiven for letting some of their operating systems and office maintenance fall by the wayside.

But this is where those tradespeople that do focus on putting in place efficient, organised processes for their business stand head and shoulders above the rest. Speaking with three different members of the trades industry, this is what Dynamic Business discovered.

Ben Mahony, managing director, Mahony Landscapes

Ben Mahony was only 23 when he started his landscaping business in 2003. As at the time it was just him and a friend on board, his business systems only extended to needing to invoice clients.

Fast forward nine years and Mahony Landscapes, in Sydney’s Northern Beaches, now has 18 employees and is operating three different divisions: Mahony Landscapes, Mahony Constructions and Mahony Maintenance.

“For the first probably five years we doubled in size every year and I think we’re maintaining about a 20-to-30 percent growth rate every year at the moment,” Mahony says. “Originally the business plan was to start and basically try to grow to about a five or six-man company. I wanted to have two teams running; me on one and either my brother or someone else on another,” Mahony says. With their growing reputation however, the work just kept coming in.

“All of our work comes purely through referrals from architects, clients and builders. We have a really good client base in that regard so we don’t advertise. We’ve just grown to help continue the service to that good client base we have. But yeah, the original goal was not to get to the size we are now that’s for sure, but as it’s happened we’ve adapted to keep moving.”

Ensuring that they kept on top of all the necessary business needs was important as the company grew in size and strength. “We’ve tried to systemise things to a degree. We hired some girls at the beginning who came from a bigger service, so they’ve come in and systemised the office the way they know and I‘ve simply had to adapt,” Mahony explains. “We were getting to the size where if it wasn’t systemised in that way we weren’t going to have any success, it was just going to be too big to organise.

“They brought in all the computer systems and software programs. My own quoting programs and quoting templates I’ve developed myself, but in terms of the actual accounting and day-to-day management it’s all been slowly built up over the last seven or eight years.”

Mahony knew that it was important to have this assistance in order for the business to move forward. “I was trying to do everything myself and it was just getting too much. It was about letting go and getting someone else to help.”

Despite its successes, Mahony’s business does come across the same problems that most SMBs face. “Cashflow is probably the hardest thing to manage in a small business,” he admits. “We decided to take care of all the invoices week to week. We make it clear before we come into a job when we’ll issue a payment plan to the client. Ninety percent of the clients stick to that plan, obviously there are going to be variations and blowouts along the way so you know your end figure will always adjust. But that allows me to manage cashflow and know what’s coming in over the next month or eight weeks.”

Without any official training, Mahony has been a self-taught business owner. “You learn from your mistakes. It’s something that I wouldn’t say I’ve studied but I’ve managed to adapt and systemise the office to allow everything to move quite smoothly. Everyone knows their own roles and their own jobs. It’s one of those things that’s grown, I’ve had no particular training in it at all. We take advice from people we know here and there, but generally it’s been a bit of trial and error.”

Chris Ryan, managing director, Glen Loddon Homes

“We would class ourselves as a medium sized builder,” explains Chris Ryan of Glen Loddon Homes, based in Bendigo, VIC. “We do around about 50 homes a year. It’s all domestic stuff, mostly new homes, occasional renovations, but mostly just new homes. We don’t really do commercial. We have a staff of 17, those are full-time employees and there’s obviously a large bank of subcontractors that we use.”

Ryan, who took the business over in 1995, has grown it from five staff working out of the garage at one of the display homes to 17 staff and his own joinery, “Just to make all our own kitchens and vanities to get a bit more control, and to ensure the quality was what we wanted,” Ryan explains.

Growing quickly, as many successful SMBs can attest, can be just as much of a problem as slow growth. This was just one of the issues that Ryan came up against when taking over the business. “One of the hardest things is managing expansion; trying to pick your spot in the market and to be the best that we can be in that area. For us, it’s individual design, usually second and third home buyers. They’re people that want us to design houses for them and then go through and build them.”

Finding a niche area means that it’s easier to target a marketing message. “We do TV and print media every week. We’re constantly trying to mix up the marketing message to reaffirm what the business is about. You’re just trying to make sure your message is clear, that it’s engaging, and that people understand what they’re going to get from you,” Ryan says.

While they rely on a lot of referrals from happy clients, there’s always a need to stay on top of their marketing message. “A very large percentage of our business is through referral so we work very hard on our customer service, and our after sale service, trying to engage our clients and get feedback from them to see what we can improve on. It’s just constantly trying to improve the business and make it more current, or more relevant to the industry as it stands today.”

With 17 in-house staff, Glen Loddon Homes is a very different kettle of fish to a small, one-man contractor. So what are the different business needs of an established medium-sized builder? “A lot of it obviously is to do with the overheads,” Ryan explains. “The higher level your overheads the more sales you’ve got to make just to meet the cost of keeping the organisation buoyant. It’s about having or sourcing expertise in a lot of different fields: accounting, marketing, etc.

“All the other business management elements are magnified as your business gets bigger. Smaller contractors have the same problems but in a micro version. Their overheads are smaller so obviously they don’t have to sell as many houses, but then they don’t have the capacity to sell or build more houses unless they put more people on.”

Paul Smith, general manager Parmic Pty. Ltd

Working in the fire protection industry, which involves designing, fabricating, installing and maintaining fire protection, detection, and special hazards systems, is nothing new for Paul Smith, who’s been working in the biz since August 1971.

After working for other companies for over 20 years, in 1992 Smith started out on his own and created Parmic. “I decided to start on my own just as something to achieve. Back in 1992 there wasn’t much work in the industry. Victoria was bankrupt, and Tassie was a basketcase. Interest rates were up 19-to-21 percent. It seemed like the right time to build a foundation for a business, because things couldn’t get any worse.”

With just himself and a van and some maintenance service work, after three years Smith had three employees and a turnover of $300,000. 20 years after the business initially started, they now have around 15 staff and a turnover of $4 million.

But 20 years is a long time to be in the business. “The biggest thing at the moment is that the business is starting to outgrow me. I’m looking into setting up a succession plan or selling the business to some younger guys who are a bit more dynamic. That’s one of the biggest problems when you start off on your own, working out succession planning.”

While Smith did get some assistance from consultants who helped him work through business planning and SWOT analysis, throughout the years, Smith has taught himself everything he’s needed to know to make his business successful. “I did a business diploma in the early days and employed an administration manager, but I’m self-taught. Self-taught with computers as well.”

Smith knows however, that his biggest investment is in employees. In the late nineties he put all of his employees through a diploma of business and is continually investing in keeping his staff up-to-date with any new courses relevant to advancing the business. “It was to get everyone on board to look at ways and means of moving forward. After we had the foundation of the business organised we decided to put them through that course. You need to invest in your staff, they’re the most important asset of the business.” This investment has obviously paid off, with staff staying with the business for eight, 10 and 17 years.

Work in this niche industry comes from tendering for jobs, and competition is strong when work comes up. The biggest challenge however, according to Smith, is dealing with the peaks and troughs in the industry. “Without buildings being built, we can’t install fire systems.” In those times, Parmic redistributes work back to its maintenance and service and, in the past, during particularly down times, they have been forced to reduce hours and cut staff. “You do need to look after your core employees throughout these times,” says Smith.

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Rhiannon Sawyer

Rhiannon Sawyer

[NB: Rhiannon Sawyer no longer works for Dynamic Business]. Rhiannon Sawyer is the editor for Dynamic Business online. She also looks after online content for Dynamic Export. She loves writing business profiles and is fascinated by the growing world of homegrown online businesses and how so many people can make money in their pyjamas.

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