Starting a building business (Cooper and Cooper Renovations) during the recession was tough, but winning 29th place in Deloitte’s NZ National Fast 50 Fastest Growing Company Awards 2014 was recognition Graham Cooper’s efforts had paid off.
Shortly after the awards ceremony I asked him what he had learned during the process.
Quit trying for perfection
Resist the temptation to buy work
Get to know the people around you
Don’t expect new employees to know everything
Keep a careful track of jobs
Know your key numbers
So, Graham, tell me a little about what you have learned leading the 29th fastest growing company in NZ
I’d say the first thing I have learned is to quit trying for perfection. I’m a bit of a perfectionists and it’s a nice goal to have, but I don’t think any businesses really achieve it – certainly not in construction.
It’s impossible to do a perfect job all the time every time. Things just go wrong in the building industry. It’s normal. But guys get all stirred up about it. So I reckon you shouldn’t spend long hours chasing perfection.
It’s better to spend those hours securing existing and new sales. Then, when you have plenty of good jobs on the go, there is more money coming into the business. And you can use some to fix up the problems that inevitably happen. But if the little problems become your obsession, then you risk creating an even greater problem of not having enough money coming in.
It’s the same in quiet months. You should resist the temptation to buy work. When you have a quiet patch (and it happens) and you don’t have much work on you still need to focus on getting good jobs. Because if you take on any old jobs, just to keep the team going, then you tend to pick up problem clients. And these really hurt small construction businesses.
You seem to be saying that in almost any situation the business owner should focus on sales.
Absolutely. More than ever.
So, how did you go about creating the sales opportunities you needed to get to where you are now?
Get to know the people around you. Talk to your clients about their friends and family and get their referrals. Then follow them up. I got involved in networking groups and learned how to work them.
I found it was worthwhile keeping in touch with our past clients by email – better still by calling them and having a catch up. We got referrals.
Guys tell me they don’t have time to network. In that case they need to get to know the people they do meet.
We landed a great job from the coffee guy. I think it was because we talked to him rather than just bought his coffee. We focus on talking to the people we meet, rather than trying to find people to talk to.
I guess growing any business requires adding to your team. Any tips?
Yes. Tell me about it. But you do need to persist in recruiting. One thing I’ve learned is that it’s difficult to know what you really need until after you’ve employed someone. You kind of learn after the fact.
For example, you employ a great builder but it turns out he’s totally useless at teaching an apprentice. But you want to keep him on because he’s good. Yet another is not so good at building, but great at teaching. They both have the same work ethic and fit your culture – but they’re so different! So you end up changing their job description to suit.
Also, don’t expect new employees to know everything you’d like them to. It takes time to come up to speed. Not many builders can afford heaps of recruitment tests to find the perfect fit every time, so it is a bit of a risk.
Was the risk worthwhile for you?
Absolutely. If you don’t take any risks you will never learn what it takes to overcome the challenges of growing a team.
Tell me what you’ve learned about money.
That’s an important one. There is much to learn. And it’s really important to get it right, because when builders go under it’s almost always because of money problems.
So you need to keep a careful track of jobs to be sure they are profitable. You need to learn what it is about your operating style that causes some jobs to go over, and avoid doing this time after time.
And you need to know your key numbers – all the time – that’s really important. For example: How much has been sold this month? What needs to be finished this month? How much should we be invoicing this week? What is the expenditure budget next month and do we have the cash flow to manage?
You have taken your business through recession, and growth; two very different markets. What differences have you noticed?
Yes it has been a journey. In recession I found customers were not in a hurry to start their project, they were more price conscious and looking for ways to save money. Providing the most value was very important.
But in a growth market customers have the money, are less concerned about costs and want the job done now. So focusing on the completion date is important.
What’s really important it listening to what concerns your customers and shaping your business to meet their needs.
Finally Graham, what would you say to a young builder wanting to start a building business?
Don’t be afraid to ask for help. It certainly helps.
Why not share your thoughts on Graham’s success. Do you have any further questions for him?