Create an intelligent game plan

BY RICHARD DiTOMA, L.M.P.

American football is a sport that many people vigorously enjoy watching each year. The object of the game is simple. After a coin flip, it is determined which of two teams will get the ball first. Then the two teams line up facing each other.  Behind each team is an end zone. The point of the game is to place the ball in the end zone your opponent is defending and receive points for the accomplishment. The official game playing time is one hour which takes about three hours to complete. Go figure. Sounds like those jobs you thought would be completed faster than they actually were. The team with the most points at the end of the game wins.

But before the football season begins, and before any head coach of a National Football League organization leads his team onto the field to engage in a contest of skill and strategy, long hard hours of planning must take place. Owners, general managers and head coaches make the big game plan, which defines the parameters in which they intend to build their teams. Once the season begins, head coaches must also make weekly game plans that will hopefully allow them to take advantage of their strengths and exploit their opponent’s weaknesses. This goes for the teams that have been in existence since the dawn of the game of football, as well as new expansion teams just starting.

The big game plan starts with the owner choosing the general manager. Next, often with the assistance of the gm, comes the choice of head coach. The head coach, in turn, chooses his coaching staff. The gm and head coach then start the process of choosing players.

In making their weekly game plans, football coaches can utilize different types of offenses and defenses. Their offense could be built around the “run” or the “pass” play in any combination that will help them attain their goal of success, while their defense can be built upon different formations that will upset their opponents’ offense.

Coaches with intelligent game plans and teams that are able to execute those plans successfully will usually win. I use the word usually because footballs are not round. They have points on each end. The direction of their bounce is often not predictable, just like business trends. Coaches without smart game plans usually lose before they ever enter the field.

As a PHC contractor, you are the owner, general manager, and/or head coach of your business team. You must make a game plan before entering the business arena to engage in the skillful and strategic game of commercial enterprise. Regardless of company size, every contracting business consists of a team.

If you have a single person phc operation, you must wear each of those hats and discharge your duties in a respective and responsible manner as if you had all those persons in your organization. If you don’t, you are on the path of implementing a defective game plan. Regardless of your company size, any business with a defective game plan is destined to having a losing team. Like the teams that don’t make it to the playoffs, you’ll exist, but you’ll have a losing team and you will not attain the success you really want.

Before you can determine what an intelligent game plan is, you must first understand the meaning of the words that make up the phrase. “Intelligent” is defined as “having or showing a high degree of intelligence,” which is defined as “the ability to perceive logical relationships and use one’s intelligence to solve problems and respond appropriately to novel situations”; and “game plan” is “a plan for a course of action, especially, to attain a certain end.” [definitions according to Webster’s] 

In the contracting business, the only certain end any business person wants to attain is profit with no stress and frustration. Therefore, it makes sense (& cents) to be wise and create, monitor and always alter your game plans in order to keep them intelligent in an effort to attain your goal.

Most contracting companies start with the concept of a single person. As that person, you must make the decision as to the size of the business you intend to create. If you decide to remain a single person operation, you must take into consideration some logical facts. There will be occasions when more help will be necessary to properly execute certain tasks, or take a day off. If you want to have others in your employment, you must remember that when hiring more people, it is very possible to hire more people than you really need. This could lead to lowering prices to a dangerous level in order to keep those people busy when work is sparse. Lowering prices is dangerous because it has the distinct possibility of not allowing you to attain your certain end [goal]. That is profit with no stress and frustration.

You must be aware that you will not have work for all your technicians all the time. Therefore, your game plan must take this into consideration in order to be intelligent. If you lay them off during slow times, you may increase your problems. You may not be able to get them back when you become busy. They may decide to go into business for themselves often with your clientele. That’s the reason you must always understand the domino effect of your decisions. It’s why some game plans are smart. Others are absurd. And, the rest lie in the abyss between intelligence and absurdity. Thus, it is necessary to have a wise game plan that will not interfere with you reaching the end zone [success].

As part of the intelligent game plan, you must decide which services you will offer and the ways in which those services will be presented. By that I mean that there is a choice of doing plumbing, heating, and/or cooling; and then, the choice of whether that will be done in the field of 1) service/repair/replacement, 2) new construction, and/or 3) alteration and remodeling. When choosing you must realize that if you decide to mix fields such as doing service/repair/replacement and new construction with the same personnel, you will have difficulty pleasing your clientele and reaching your goal. After all, the same crew cannot address either field at the same moment in time without ignoring the other. A client who requires service work cannot be served when a construction project must be contractually completed during the time the service work must be done or vice/versa. You must also decide whether you are going to be a primary contractor and/or a subcontractor.

Before opening your business doors to the public, you must know the first commandment of business. “Thou shalt calculate your true cost of operation and maximize your profit to attain your goals.”

In order to accomplish this you must know the amount of money it will cost you to operate your business and the profit margin you will need to implement before you can arrive at a proper profitable selling price. To do this you must understand which costs are tangible, which are intangible, which are fixed and which are variable. Once you know your costs, you will be able to turn ignorance into knowledge, and turn your game plan into an intelligent one. But, be aware that if you allow fear, ego and anxiety to turn your intelligence into stupidity, your game plan will be on its way to absurdity.

After deciding upon your product/service, identifying and correctly calculating your true costs, establishing a profit margin that will give you the opportunity to reach your goal, and developing profitable selling prices, you must set up the administrative protocols that will keep your game plan intelligent. You will have to consider: the everyday managerial tasks to employ, and the ability of the persons performing those tasks; the forms you will utilize such as invoices, contracts, etc. that will allow you to be intelligent, fair, equitable and legal; the types of vehicles you will use; the inventory you will stock; the hours your business will be open; the warranties you will offer; the technicians you will hire; an objective method to evaluate technician [and all other employee] performance; and the level of quality you will deliver to consumers.

Here’s a hint regarding quality. Paraphrasing a quote from Vince Lombardi, former head coach of two Green Bay Packer Super Bowl championship teams and namesake of the Super Bowl Lombardi Trophy, “If you strive for perfection, you can attain excellence.” To that I add: If you deliver excellence and implement a wise, intelligent game plan, then you will be a champion.

If you need help with your game plan, give me a call. My Solutions© support system is confidential and customized to meet your needs and help you develop an intelligent game plan. And, as the name suggests it can give you Solutions© to help you attain your goals while offering continued support during and after the process.

Richard P. DiToma is a business consultant and contractor with 36 years of experience in the P-H-C industry. He conducts seminars, evaluates business operations, publishes customized price guides for contractors and offers continuing support.

His book -- “Solutions Management Theories & Methods for the Contracting Business” -- deals with solving pr-oblems contractors face; identifying & calculating costs; developing proper profitable prices; addressing consumer questions; hiring and evaluating technicians; and logical management procedures

It’s also available as a “Workshop On Demand” for individual businesses (from one person to multi-person businesses); contractor groups  (organized or informal); trade associations; and wholesalers to the trade.

Date: Arranged according to your schedule

Location: Wherever you wish. Richard P. DiToma will come to you -- or you can come to him. Contact Richard to find out if there is a workshop coming to your area.

His other book -- “Readily Available Pricing Information Digest 2006” -- for the plumbing-heating-cooling contractor service price reference book is available with plumbing &/or heating &/or cooling section(s). To receive more info about his services, to order his books or to contact Richard at 845-639-5050, by fax at 845-639-6791 or via email at richardditoma@verizon.net