I’ve been in the industry a long time and have had many opportunities to see what was supposed to have happen and what then actually happened. I get the opportunity to sit in a room full of insurance repair contractors that are not geographic competitors. I see their financials before they go do work out of their area and after they return to their area. I hear the promises that they make to each other, because their buddies will hold them accountable for what they promised they would do.
They put their numbers on a common form with specific explanations as to what and how they fill the forms out. They also supply their income statement and balance sheet in whatever accounting software they use. This gives all participants in their network to know what’s going on in each other’s companies. I’ve listed some of the questions they start firing at each other when they start talking about chasing after work outside of their area. The first four questions are fired out very quickly, and the networks want to know their clear answers to the questions.
- Who will stay behind and operate the home office?
- Do you have access to additional cash to do the work and match the time it will take you to get paid?
- Have you run this by your family and circle of friends?
- Have you run your idea by your board of advisors?
The next set of questions quickly follow the first questions they’ve just been asked. All of the network members are in the same business they are, it’s very difficult to blow any smoke at their friends in the network. The companies have also gotten to know some of their key employees at previous meetings they’ve attended, also if the company has been critiqued in the past. This allows them to be very familiar with each other’s companies.
- Who is going to manage the new office?
- What will the pay be for working out of town?
- Would it be important to have a company meeting with both employees and their families?
- Where will the temporary people come from to replace the ones going to the disaster?
Most of the companies can answer their questions being asked of the company. They need to ask the company, so they know where the company’s thoughts are regarding traveling to a job.
- How many people should you take with you to operate the new temporary field office?
- Will the people left at home be able to run the company profitably?
- Will the amount of equipment left behind be enough to run the home company?
- How long is the trip scheduled to last?
The network continues to ask tough questions and they do not let the owner off the hook until they get answers to their tough questions.
- What points will trigger the decision to return home?
- Where will your people be housed and fed?
- What will be the rotation policy to return home to visit their families?
- What type of jobs are you going to go after at the disaster?
They continue to ask questions that they need to get answers to. They can then give answers based on their experience and what they think the owner should do or not do regarding leaving or not leaving their area for work.
- Do you have any friends in the disaster area who could help you with the following:
- Places for you and your people to stay?
- Assist you in finding the right kind of work?
- Will you be able to charge for and get paid for travel time and overtime?
- How are you going to handle what local companies will say about your company not being a local company and not able to handle warranty issues?
- Is this list based on your ego, your greed or your sound business practices?
My major point here is that by them all being in the same business, they are able to give real, accurate and timely feedback to the company needing input. In addition to them being knowledgeable, they can look at each other’s data and know that no one is blowing smoke at each other. They can verify what they are being told.
As I attend conferences across the nation, I’ve noticed two tendencies that occur a lot:
- The further distance away from one’s business one is, there is a tendency to tell others that both volume and profitability is a lot higher than it really is. As a result, there is no way to verify what they are being told. Besides, who would lie about their volume or their profitability?
- The second thing I’ve noticed is that other contractors think that intelligence increases with one’s volume (i.e. someone doing $10,000,000 is smarter than someone doing $1,000,000). There is no way to verify what they are being told. Besides, who would lie about their volume?