By: Rick Phelps, Principal, Synchronous Solutions
At some point every fabricator that ever decided to start his own fabricating business runs into the wall – the point where the business ceases to be fun, or profitable, or most likely, both. For some it happens early when they still have a small team and one day they wake up realizing they work more and earn less than anyone else on the team. For others, they have grown a business to tens of millions of dollars a year with over a hundred employees, and the business is barely breaking even. The stress and frustration that results can be devasting.
It doesn’t have to be that way. The fact that you are reading this paper means you have hit that point where you are seeking help, the first step to healing your business and yourself.
In this paper we are going to lay out the pathway to building a successful fabricating business that is a joy to own, to work for, or to work with. A profitable business that provides for your life, rather than consuming your life. We call this pathway the ‘Synchronous Flow Operating System’ (SFOS), a way to lead and manage a manufacturing business that is the integration of the best ideas, processes, and business understanding accumulated over many decades of working with fabricating or manufacturing shops around the world.
Nothing in SFOS is new or innovative. It is just assembled in a way that makes sense and works for businesses like yours.
A great business requires two things:
- Great Systems – the way things are done.
- Great People – the team that runs those systems.
When you started your fabricating business, the chances are you were really good at fabricating countertops. For many, things went great as long as they were directly involved in that process. At some point, maybe as you approached about ten on your team, things started to fall apart. They just didn’t do things as well as you did. They certainly didn’t care as much as you! And one day as you finish the bookkeeping hours after everyone else went to bed, you realize the joy is gone. Now what?
Many fire most of their team at this point, shrinking back to the core handful that ‘got it’.
Others get lucky and hire someone good to help them handle part of the business, usually the office stuff, and they continue to grow.
The next stress point hits as the business approaches a team size of about twenty employees. Once again, more things are going off the rails and the stress raises.
I could continue describing the size of your team where things really fell apart, and at each point, some reader would say, ‘yup, that is when it fell apart’, but most fabricators don’t make it much past this point, so I will stop here.
Ten or so people are pretty much the limit on how many people one person can manage effectively.
And the chances are, you are not hiring people who are good at managing others, you are hiring people who are good at doing the work you need to get done. This is problematic.
What is the difference between a bunch of kids playing a pick-up game of baseball or basketball in the park, and kid’s playing in a league?
One is a bunch of people running around doing the best they can, the other is a team learning a system of how to work together to achieve the goal of winning the game, with each player understanding how they fit into and contribute to the team’s success.
If you want to win at the game of business, you need a game plan – a clear way to work together to achieve your goals. As you have found out, great individual players can only get you so far.
Many people who go into business do so by buying a franchise. We own an ActionCoach Business Coaching franchise. Why buy a franchise? They come with the systems and processes already designed, proven, and ready to use. You and your team just have to learn those systems and execute.
There is not yet a countertop fabricating franchise system that you can buy, but there is something close.
We have built the Synchronous Flow Operating System to be a comprehensive end-to-end system for how to lead and manage your fabricating shop.
We recognize that every fabricating shop is different, serving different markets, producing different products using different production processes. They come in all shapes and sizes! For this reason, SFOS was designed to be tailored to each unique shop’s needs, while maintaining the structures common to every fabricating shop.
We help you tailor your version of the operating system to guide your team in the execution of your game plan. You maintain autonomy and control without having to reinvent the wheel.
It starts with simple yet powerful financial models that clearly show the impact of the decisions you make on the profitability of the business. These impacts include:
- Changes in the mix of markets you serve.
- Changes in the mix of products (materials) you produce.
- When and where an increase in business volume will create issues.
- The impact of different pricing strategies.
- Where you will run out of capacity first, second, and so on.
Using these models, you can create a rational plan for getting your business out of the ditch, or to and through your next major milestone. The models create a clear picture of the financial boundaries associated with your business achieving the desired top-line and bottom-line goals.
It is one thing to say you think you want to grow your business to have $10M in Revenue with a Net Profit of 12%, with no clear idea how to get there. It is a completely different story when you know that to get there with your current product mix, know that you will need to spend $X on increasing your capacity in this area and that, leaving you a budget of just $Y to spend on everything else you will need or might want.
You now know you are going to increase your sales by a specific number of new jobs every day / week / month to achieve your goals. Those specific goals translate into needing an addition salesperson, another project manager, better marketing campaigns, and so on. Your shop is going to have to increase its capacity to handle the extra flow of jobs, perhaps requiring you buy a new machine or two as you approach specific levels of work. Those jobs translate directly into the need for additional Install crews or Measure techs, along with their vehicles and associated equipment.
Without the clarity of knowing what is coming and what will be required, you run the risk of investing in the wrong things or the right things in the wrong order, creating issues as you grow.
With that clarity, the advice of your tax accountant to buy yourself an expensive company truck for personal use to avoid taxes suddenly doesn’t look like such a great idea.
Knowing where you are going and what it will take to get there is how the Synchronous Flow Operating System guides you through the process of connecting every role in your business to the specifics of what that role needs to do to get you there. Just like the kids learning to play ball as a team, every player knowing how they fit in, and what they are supposed to do during the course of the game.
Knowing what every player on your team needs to contribute enables you to develop specific scorecards for every role in the business. No one plays sports (or video games) without keeping the score of the team and their own stats. It is how we get better and derive enjoyment from the activity.
When your team shows up for work and there is no score, no stats, just doing the same thing day in and day out, is it any wonder your team doesn’t have the same enthusiasm as you? You know the score – they don’t!
Like business owners that invest in a franchise model, you can invest in a proven operating system for your shop that you and your team can learn to execute, then customize to make perfectly fit your business and your dreams.
