What’s the right shape for your business?

Franco Miceli, Operations Director at HomeServe Alliance, looks at how to ensure your heating business is the right shape and size:
greenhomeI’ve been working with contractors in the gas trade for nearly 10 years now. One of the most frustrating challenges contractors face is understanding how they can grow their business, or what the right size is for their business. There are lots of facets that determine the best approach for increasing the size of your business.
At HomeServe Alliance, the franchise business for local heating companies, we have criteria for the ideal contractor, who is ready to grow their business. The criteria insists on contractors having a minimum of four engineers. When last researched, the results revealed that there are circa 40,000 gas safe registered businesses across the UK, of which only 8%, have more than three engineers. I have also interviewed many owners of gas businesses and most want to grow their business, but just don’t know how, or what to do.
One thing that I come across time and time again, is that, if you’re working in the business, then it’s your job. In the heating industry, if your sales are under £250,000 a year, after overheads you’re just earning yourself a wage. If you decide to work 80 hours a week, then you might make a bit more. But that’s no good! 92% of the Gas Safe registered businesses across the UK have opted for a tough job, not a business.
So, if you want to sell your business at some point in the future or take an extra holiday every now and then, you need to work on your business, and not in it.
The typical company
There are two kinds of businesses I’ve come across over the years: the first is a business that has grown organically and led by a technical owner; and the other is a business that is run by a business leader.
The business that’s led by a technical owner typically starts with the owner doing the repairs, and as the volume increases, the business takes on friends, brothers, cousins or anybody else who is known to the business owner. At some point the business finds itself with half a dozen employees, doesn’t know how it got there, or what to do to move forward. This kind of leader, isn’t an entrepreneur. This business might be successful, but only because the owner has a solid knowledge of the business, and is very hands-on.
The second type of business is run by individuals who don’t have much technical knowledge, but have a solid understanding of what’s required to run a business – a vision and a plan. Usually the end game for this kind of leader is to sell the business. If you want to grow your business, you need to know where you want your business to go, how much you want to earn, and what to measure.
You need to have industry knowledge, experience, a plan, the right systems, KPIs, a good management team, and most of all, be willing to learn to let go. This tends to be difficult for business leaders, because there’s a fear that if they let go they’ll make less money– but having the right specialist support and team around you makes the difference.
If you want to sell your business, and you’re seen as the final piece in the jigsaw, any potential buyer would be nervous that the business wouldn’t survive without you. So creating a business with the right vision and resources is critical.
The right people
I’m never shocked when I learn that a company’s doing well. This is something I usually find out within the first 10 minutes of a conversation with the business owner. They know where they want their business to be, have a plan and know the kind of people they need to employ to help them get there. They’re good at motivating and leading their staff.
Many times I meet businesses who have sound technical structures, a good customer base, and have a plan, but seem to have plateaued. In the case where the business is run by a technical leader, it’s because the owner is trying to do everything, whereas the business entrepreneur leader just doesn’t know how to access the tools available to leading installers.
HomeServe Alliance has a number of franchisees across the UK; the quantum leap for these businesses came at the point where specialist staff were employed with experience and knowledge in specific roles. I.e. a surveyor or sales manager.
HomeServe has over 20 years of experience in the industry, seeing it secure over 2.1 million customers, 5 million policies and an 82% retention rate. This has been achieved by experienced people, who specialise in their roles.
The right shape
What is the right shape for your business? If you’re able to answer this question, then you’re well on your way. If you know what to do to get your business into that shape, but don’t have an action plan, then you’re no further forward. Knowing what to do, and not doing it, is the same as not knowing what to do.
Depending on what kind of leader you are, there are often times in your growth journey where it is time to call in additional help. HomeServe Alliance has already helped a number of businesses across the UK increase their sales by 30 to 40%. There are 1 million boilers installed across the UK each year. Our mission is to market your business, and capture 10% of the boiler install market for you, every year.
If you want more than five installs a week, an unprompted awareness of your brand and plan to retire earlier than the majority, then HomeServe Alliance can help you.
Laying the foundation
The first step is knowing what you want. Put the foundations in place, and start with the end in mind. Where do you want your business to be in five years’ time? Where do you want to be in five years’ time? When do you want to stop work? If you can answer these questions, then we can start to put an action plan together to help you achieve your goals.
Why not give HomeServe Alliance a call and let us share with you what we’ve achieved in the last 12 months, and what we have planned for the future? HomeServe Alliance will help your business achieve a sustainable competitive advantage by bringing you the big business benefits only available to the leading national installers.
In fact, we’re so sure that with our tools and your experience, we can grow your business and increase your revenue that we’ll work with you through a six-month trial period. After that, if you don’t like it, you can just walk away. If instead you do like it, we can move in to a more secure relationship, where we can really ramp things up. ‘Try-before-you-buy’ isn’t what you typically get in franchising, but that’s how sure we are.
If your business has four or more engineers, an office with customer support staff, and an appetite to grow the domestic part of your company, contact Franco Miceli, Operations Director at HomeServe Alliance.
Tel: 0203 642 2764 | Email: franco@homeservealliance.com