What happened this year?

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I was recently gchatting with my friend who asked me why I have only been compensated $4000 this season so far (end of August of 2015!).

It has been so busy, we really haven’t had time to reflect on what happened. Now that things have finally slowed down, I figured out why:

In summary, all our equipment broke this year, partially due to having a bad mechanic last year and putting off last years problems to be fixed this year. We planned on finding a new mechanic this year to save money on repairs, but could never find the right person. On top of all the repairs (30k to date), we bought trucks.

On top of all that, we grew very fast and hired a bunch of unskilled labor and didn’t have the administrative resources (production manager) to train them properly.

At the same time, we switched up our payroll system from commission to hourly, which since the season did not go as it planned, amounted to each employee getting 20 hours of overtime a week.

We bidded new jobs very competitively to try to grow and things just went unchecked because we were all so busy! My field Manager, Office Manager, and I were all putting in 70 or 80 hour a week so obviously we had no extra time to monitor important things or get organized.

I think it is to be expected that if a company is growing aggressively, there is going to be a smaller (or no!) profit margin.

To recover for this season, my plan is to sell off a bunch of our old assets such as our Bobcat and old dump truck. This will provide us with the cashflow we need to start next season. We are also going to come up with a way to get money earlier from our customers, such as switching to contracts and payments starting before the season starts.

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