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5 Signs Your Business is Growing Too Fast

Can a contracting business really grow too fast? You bet it can.

I remember waking up at 6 a.m. for the second day in a row after working until 2 a.m. the night before at my family’s 70-person plumbing, heating, cooling and now electrical company only to face another day of massive stress and thinking, “At this growth pace, something’s got to change, or I’ll be a rich dead guy.”

That was not my goal and I bet it’s not yours either!

You were handling it—somehow—until you one day you just couldn’t and that’s when the wheels started to fall off or at the very least began to wobble. It’s like you’re in a batting cage and the pitches you used to be able to hit are now coming so fast you can’t even get the bat off your shoulder. That’s how it feels when you’re growing out of control and can’t keep up anymore. Sound familiar?

Here are five clear signs your business is growing too fast and you need to act—now.

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Two Roles You Can Never Leave as an Owner

“I fired all of them,” said the Canada-based condominium developer I was helping to optimize his business. “Wow,” I said. “What happened?”

The developer continued. “You said you wouldn’t work through a bunch of layers, and so I fired all my vice presidents. And you know what I found out? They were keeping things from me. If I hadn’t done that, my business would have been out of working capital within six months. Now you just have to help me navigate out of this.”

I told him in a nice but direct way, “I blame you… not them. It was your job to know for yourself what was and wasn’t happening at your company, and we’re going to fix that starting with getting you to a much better designed Box Org Chart.”

And we went on to do just that.

Unfortunately, this is a story I’ve heard all too many times over nearly 20 years of 1-to-1 consulting with contracting clients. The owner would delegate responsibility for their financial position to someone only to discover all kinds of impropriety once that person went on vacation, departed — or the bank or creditors started calling!

The Financial Manager role is one of two roles you can never give up. The other is Marketing Manager.

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The Right Way To Cut Business Costs (Part 2)

As promised at the end of Part 1 of The Right Way to Cut Business Costs, I’m going to share here in Part 2 the rest of the 5 most common areas to look to cut expenses the right way.

The remaining three are:

3) Inventory is in overload and out of control. The vast majority of shops I visit when I first do my 1-to-1 consulting are way overloaded with dead inventory that is costing them money. To me, it costs money because they could be trading this excess inventory off for credits with a supplier or sold off at a discount to generate money. It’s easy to think, “I should have those items on my shelf because if I buy in bulk it’ll be a good deal,” or “I want a lot of it in my warehouse because I don’t want to run out.” It’s all flawed thinking.

The best thing to do is what I call “Exit the Warehouse” business process, and that means finding a great partner with a great vendor or even two great vendors if need be. They can help take control of what you keep in stock, and they can help you arrive at the correct minimums and maximums for each item. It requires restricting access to the warehouse itself to a very limited amount of…

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The Right Way To Cut Business Costs (Part 1)

Are all the expenses you’re “used to” carrying still pulling their weight?

Probably not!

Getting a better handle on this means you need to dedicate yourself to getting Financial Power in place.

Where should you start when it comes to cutting the right expenses in the right way?

Start by looking at all your expenses from the prior year listed in your Profit and Loss Statement (aka P&L). Take out a yellow legal pad if you want a manual moment or open up a Word document and list them all. Then, sort that list into must expenses and nice-to-have expenses.

It’ll be tough to do this because everything you now spend money on seemed like a good idea at the time. But a sinister thing about some expenses is they may be small expenses, but if they’re occurring every month, for instance, there is a compounding effect, and not in a good way. The reality is all these “small” recurring expenses add up.

Here are two of the five most common areas to look at when it comes to cutting expenses:

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Holiday Bonus Blues Getting You Down?

The holiday season should be a wonderful time for friends and family to gather. It should also be a time for everyone at your company to come together and celebrate another year wrapping up as a team.

But, the holiday season can be very stressful at work.

One of the reasons is the ugly thing that can happen at companies and that is the tug of war over giving staff holiday bonuses. It’s not that you’re cheap. But, a lot of contractors I’ve worked with have had to take the money out of their own bank account or even worse from their own holiday fund to pay these bonuses. That’s just not right, let alone sustainable.

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Why Buy Another Contracting Business Book?

Good question!

Is there a shortage of business books out there or business information out there on how to be successful in the contracting business? Nope!

Can trying to figure out what to do with all that information be overwhelming and confusing? Yes!

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Engineering a Turnaround

It’s never too late to engineer a turnaround at your company! Pretty bold statement! It needs to be. I want you fired up about taking back your company from the jaws of defeat and get it headed in the direction…

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Loaves of Bread

Many of the contractors I speak to and even work with have many common traits. But the one that undermines many of them the most is being too overly involved with stuff that doesn’t really matter all that much but…

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6 Tips On How to Lower Your Rising Accounts Receivables

It’s very likely you’re experiencing a cash squeeze and with tough economic times one area that’s bound to be on the rise is your Accounts Receivables. This is a double whammy if sales are falling at the same time. To…

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4 Ways to Improve Cash Flow Now

Are you struggling to meet payroll and make ends meet in general? Here are just 4 Ways to get the cash flowing again at your company now: Sell more service agreements, packages or other items that give us recurring income…

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