This is a fundamental question that is so obvious most of us overlook it. When we first think about what we want from our HVAC contracting businesses, we don’t know how to answer it. Ultimately, the answer is the business should support a lifestyle now and in the future. Here are five ideas to help you answer this very inportant question.
Stop Living on Leftovers
A lot of business owners live on leftovers. They live on whatever is left after paying employees, government, suppliers, government, rent and utilities, government, vehicle expenses, government insurance, and government. They manage their lifestyle to match the leftovers from the business.
That is exactly the wrong way to go about it. Business owners should not adjust their lifestyles down. They should build their businesses up. Identify the lifestyle you want, calculate how much personal income it requires, and grow your business to provide the income.
From the Mid-Game to the End-Game
Unless you plan on dying at your desk, you should give some thought to an exit strategy. More important, you should identify how much money you will need from the business when you do exit. Your business value will be determined by your book value plus the value of the business’ future earnings, adjusted by things like the size of your service agreement base, the value of your brand, the presence of standard business procedures, the strength of your management team, and the overall condition of your company. Your exit requirements might necessitate a larger business than you need to sustain your lifestyle.
Visualizing the Business
In Stephen Covey’s landmark book, The 7 Habits of Highly Effective People, the second habit is to “begin with the end in mind.” Covey explains that the concept involves “the ability to envision in your mind what you cannot at present see with your eyes.”
According to Covey, we create thing mentally before we create the physically. The example Covey uses is the way a set of blueprints precedes the construction of a building. Without the blueprints, who knows what might result from the construction activity.
Your business is no less in need of a blueprint, so create one. If you need to build a business that generates $5 or $10 million in gross revenue to provide you with a salary that lets you support your desired lifestyle, started planning what that business will look like. How many employees will you have? How many office and field? How many trucks? What is the square footage of your building?
Now, make it visual. Draw the organization chart for this business by position, not people. When you hire people, do it with an eye towards the future org chart. The person may wear multiple hats today, but the future will require more specialization.
Find pictures in magazines or on the Internet that represent how the business will look (e.g., people trucks, building). If you know someone with good Photoshop skills, tweak the images to contain your logo.
Give it Power – Make it Emotional
Once you visualize the company, you need to visualize what building a company of that size can do for you, personally. Building a $5 million company might be rewarding in and of itself, but it lacks emotional pull. What you can do because you build a $5 million company is entirely different.
Pull up a powerful childhood memory and you see images and you remember how you felt at the time. Our subconscious works with imagery and emotion. Visualize the company and visualize the lifestyle the company will provide and your subconscious will go to work on your behalf, solving problems and overcoming barriers before you are even aware of their existence.
Remember, do not let the business dictate the type of life you will lead. Let the type of life you desire dictate the type of business you build. We call this “Business Design.”
With greater depth, expansion, and support tools, the Business Design process is taught to members of the Service Nation Alliance. It forms the basis for the rest of the business planning process. To learn more, call Service Nation at 877.262.3341 and ask for a Business Coach.