Breaking Away from the One Thing You Do - The 7-Power Contractor

Breaking Away from the One Thing You Do

I joined in on a teleseminar call the other day that my consulting partner was hosting. The blog talk radio show had as the guest Jack Stack. He has become famous for engineering a monumental turnaround at his company years ago by sharing the score with all employees and teaching them business financial basics.

Jack’s written a lot of good books over the years but I’d suggest you pick up a copy of “The Great Game of Business” and learn the power of giving your staff a stack in the game.

But, what really intrigued me was that Jack said that despite the successful turned around of their meat and potatoes business of rebuilding engines they were smart enough to know they needed to diversify. And are they glad they did!

The recession would have hit them hard had they not looked out and seen how exposed they were.

It’s no difference for us if we still only do one trade or only one particular type of segment of the marketplace.

My family and I could see years ago that despite running a successful heating business we risked losing customers if we didn’t give them all they wanted in the way of products and services plus we could suffer massive economic impact because we were so weather dependent. And a new threat was on the horizon with the utility companies who had shunned service in the past were now ramping up to enter the market.

We decided that we’d have to move away from just doing heating and instead we’d seek to “Own the customer’s basement.” Simply put, this meant we’d provide plumbing and air conditioning as well as heating or we would risk our customers inviting others in for those trades who would steal away the heating work from us as well.

We knew we needed some heft to begin with and we also lacked the know how to make the trade a bonus and not a headache. That’s why we sought out partners who had the size and the brains to allow us to seamlessly add the products and services we lacked. It worked great and it’s still working great!

It worked great because adding additional trades was easier for us than it would be for most. That’s because we had already been acquiring companies in our field for years. We also had built operations manuals and training centers for the stuff we did. So, we knew all we needed to do was find the right fit for adding to our list of offerings and we could create the manuals and training center we would need for it to make it systematic and repeatable. And that’s exactly what we did.

We also made the decision about what trades we wouldn’t do. For us, we had no interest in becoming a home security alarm company despite the threat from one competitor who did both heating and alarms. We instead sought out an alarm company who assured us they had no interest in doing what we did and we let them know we felt the same. So, we signed a stand still agreement [fancy for a promise not to enter one another’s business] and we setup a partnership to stop our loss of customers and they did the same. We both benefited from being able to send in the “expert.”

So, what’s holding you back from doing the same at your shop?

Can you really afford in these economic times to continue to shun the diversification you need?

Now is the perfect time to diversify because acquisition is never going to be cheaper and your need to spread out your risk and increase your call count will never be higher.

Leadership Power

Connect With Us