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DING!!DING!!DING!!DING!!DING!!DING!!
You got it Andy. And I am actually pursuing folks to set up templating services where it is feasible. (Now that is a whole new subject!!!)
If I am following this, this is a service that subs out templating? I guess the obvious concerns I have are:
Controlling the appearance and demeanor of the templators. Normally that is me and this person is largely the face of your company.
Who eats the top when a template is “off”?
Overall it is an interesting approach. Kinda in the sme veign as cabinet shops subbing out doors.
I’d agree Chris, but the personality factor is more important in the templating. A cabinet company wioll find the right door guy sooner or later. The customer gets one shot and it should be you she sees.
That part of the product wouldn’t interest me yet. The online thing would be good for, say, Mory, but lil ol me?
Chris & Tom,
Your concerns are taken seriously since I too have experienced some of the same anxiety.
For many years I believed I had to have employees to install my kitchens and my own shop build my counters in order to maintain the control, look, and customer service of my company’s image. Candidly, I also lost a lot of $$ doing that due to non-productive time, waste, vacations, etc.; all the typical overhead costs that we traditionally don’t apply to our job costs. Man was I ever wrong!! I converted my operation to a totally sub-contract model and we took off, both in volume and profit. I sat with my installation sub, my counter top sub, my delivery sub, and everyone else and provided to them what I was looking for and what was needed on the customer end of things. They told me what they needed as well. We began working that way in 1991 when business was horrible, I had lots of debt, and I was pretty close to giving up. In 2004 my wife & I had retirement choice.
The point is that the relationships were better as subs than as employees. They knew they had to perform or be replaced. They took responsibility like no employee ever did. My customers did not know they were subs. It worked wonderfully and I got to concentrate on what I did best..produce business.
I am not suggesting that everyone should use subs…but my guess is that if you have trouble with employees you will still have less with subs.
As for the mistakes and who eats them…if a mistake is made now in your templating, who eats that? If you have a subcontractor templating and you have an agreement with him/her you can pass some or all of that cost on. Think about it from the templater perspective…”I can’t afford to be wrong for my sake or yours because you will change quickly to get another. As an employee and as long as it does not happen too much, what the heck, it ain’t my $$.”
But you do not have to go that way yourself, you can simply choose to be an MS for yourself and do it yourself. I am saying just do not rule it out as a possible option for the future.
Max,
I understand you’re position on subs instead of employees. It’s a sound business decision regarding expenses. I don’t agree that it’s a sound business decision for shops like mine.Part of our selling points is the personal service from myself, my partner or my lead installer. Our personalities are what make the company, and the customer tends to appreciate it more. I can spend two hours at a customers house explaining and answering questions, which clearly have paid off for me in both avoiding issues (no one can absorb the info we give out in one setting, and they should not be expected to), and helping to smooth over the problems that do come up.
I guarantee you I come up with more ideas and details than any sub I hired would. Not because they wouldn’t think of it, but because they are removed further from the quoting process, and might think I wouldn’t want that particular can of worms opened again. I’ll read the situation, look at the costs, and determine if it’s a freebie, or something I might have to charge for. If it is my suggestion, I will often throw it in.
It doesn’t throw your system out. Not by a long shot. It just means that that part of the functionality isn’t gonna be the thing that reels me in, if you know what I mean.
Tom,
You are dead on correct about the value of your personal owner’s touch. No one, absolutlely no one can duplicate the value of the owner in any business relationship. I would never suggest that you or anyone change that approach and we or any other digital templating process would be foolish not to offer an option to that working owner. The purpose of my post is to open the conversation to owners who have a number of employees running around and just assume they have a control on the situation and it could well be an illusion. You and companies like yours should not use subs at all; it would totally change what makes you of value. FULL SPEED AHEAD!!!
Tom,
Li’l ole you?
I saw you post your cable advertising budget or something once. Looked like my gross revenues for a few months 
Max,
I hope you didn’t take my post as me being angry. I think your approach is correct for all the shops that want to make that leap to wide area fabrication and supply. There are many markets that need to do just that, or they may not survive.Chris and Norm, my sales last year was a bit less than 1.5 million, total. For a shop my size, the ratio of overhead labor (me, sales, bookkeeping, about half of my partners time), versus five full time in the shop, plus the other half of my partners time as direct labor, there is not much left over for the business at the end of the year. I’m on the cusp of needing to decide if I’m going to grow enough to hire more employees for the shop, to enable another hire in the sales office, so I can stop working extra hours every dang night, or if I’m going to say “Screw it, I’m good where I am” and try to let an overhead salary go. More work for my partner and myself, but more money in our pockets as well.
Ideally we used to be about three to one with direct labor versus indirect labor. You could make decent money at that. With the increase in demand for different materials, and government demands of paperwork and records keeping, that is impossible to maintain.
Tom, My volumn is very close to yours. I just have a theory about growth. My thought is .. well in business your either growing or shrinking. No such thing as staying in one place. Just doesnt work that way. I am in kind of the same boat as you are. I dont have any desire to stay at this volume. I woul like to grow but it seems to be a hump I just cant figure out how to get over. From this point it will cost allot of money to get bigger. So going to 2mil in sales just isnt feasable due to the cost of the labor. Its like I have to double to make it all work. Well how do you double ??
Sorry,, just babeling
Travis, it seems we have similar problems.
With the economy heading the way it seems to be, it’s mighty hard to take a chance at expanding in the office in the hopes of generating more sales.
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