If you’ve ever found yourself wrestling with the dilemma of trying to decide whether to grow beyond a one-man-show, or stay where you are… then you’ll love this post!
Read the post below or listen to the audio, and learn how Derek Nichelson hired his first employee, and then rapidly grew beyond that.
- Derek tells us you need to think of your employee as an investment in your business and in yourself.
- He also tells us that just as all investments require risk, so the investment in an employee takes risk as well.
- He gives some warnings and great advice pertaining to how you know when you are ready to grow as well.
Don’t wait. Check out what Derek has to say…
Martin: All right, today on the “Ask A Protractor” series I have Derek from Florida and we’ll get into the question here in a second. Derek, welcome.
Derek: Thank you for having me, I really appreciate it.
Martin: Yeah, it’s great to have you here. Real quick, tell us where you’re at and what it is that you do.
Derek: We are located in Lakeland, Florida, so it’s central Florida. We are anything from a general contractor all the way down to a residential finish trim carpentry contractor. So, we kind of cover the whole gamut.
Martin: Nice, and how long have you been in business?
Derek: This go around, it’s been about five years.
Martin: All right, the question that we have is, “How do you successfully transition from a one man show into a larger company?”
Derek: Well, when I first hear that question, it kind of brings me back to that point of my career where I was the one man show. I was swinging a hammer at 7:00 a.m. and taking the tool belt off at 5:00 or 6:00 p.m. and trying to manage time in the office, trying to manage estimates, trying to make sure I was invoicing appropriately. It kind of brings me back to that point where I knew I had to hire somebody if I wanted to take the next step. That’s a scary time. The question was, “How do you successfully do it?”, well, I don’t know that I have actually successfully done it yet. I think it’s all still a work in progress, but I had to find somebody that I could trust, that did quality of work that was very similar to what my standards were.
The guy that I hired had enough skill to kind of maintain the level of quality that I wanted and I could tweak him here and there to enable me to leave him on a job site, knowing that I was confident when I came back I wouldn’t have to go back and fix or redo a bunch of stuff that he did.
Martin: Yes. Was that something that you worked up? I mean, did it take a while to train that person or did you hire someone that was, you know, fully trained right out of the gate?
Derek: He was a journeyman carpenter that I hired and I was at that point so, I’d say, desperate because I could see the amount of work that I was letting fall through the cracks because I just couldn’t get to it as a one man show. I probably overpaid that guy but he was a good worker, he was good carpenter and I think I found him via an internet ad. I mean honestly, it was just one of those things, yep.
Martin: Cool, so what all else goes into that transition besides finding someone that you can trust?
Derek: You have to be willing to take, and I’m sure a lot of guys that have been in this situation can attest, that you don’t hire somebody and not take a financial risk.
Martin: Right, that’s true.
Derek: Especially that first person. I felt like I took a, like, two steps backwards because I didn’t have the cashflow because it was just me. I mean I could go out and knock out a trim job at that point in my career in two, three weeks on a semi-custom style home but it was still only one job. I mean, it was only one job, one line item as far as what income and what cashflow we had. So, it was an instant two steps back, but I knew that doing that, in talking with other business guys that had kind of taken that leap, that you kind of got to go through the growing pains and bear with it, make sure the guy is who you need. Then during that transition period where to take two steps back and you’re getting ready to take the leap forward, I was able to go out and sell more work, gain more clients and within two and a half months, three months tops of hiring that first guy, I hired another.
Martin: Oh wow.
Derek: I was able to grab the work that I had been inquired about, people had been inquiring about my work and wanting us to do work, I just as a one man show couldn’t get to it. So, when the word got out that I could take on more work, it was just like a snowball and it kept coming and two guys led to three, led to four and you know, I definitely don’t think we’re, successfully figured it out because I still learn every day. Now we’re definitely to a point that I can’t believe where it’s come in five years.
Martin: Well, that’s great. So, I mean, it’s something that I’ve heard before is you always want to hire two or three months before you actually need the help and that’s when it’s the hardest because you might not have the cashflow and you talked about that.
Martin: I mean, and especially when you go from a one man show into that first employee. I think, like you said, once the ball gets rolling and you have a couple of employees it might be easier to make the third hire, or fourth, or whatever but transitioning from one man to the next is hard because every dollar that’s going to your employee is kind of taken out of your own pocket. I mean, what do you tell someone that’s right in those shoes?
Derek: You’ve got to trust your instincts, is what I would tell you and you have to make sure that you are prepared for what’s ahead. You definitely, if you’re ready to make that commitment and make that investment in, and that’s what it is in an employee, you’re making an investment. You’re making an investment in somebody but also in your business and in your future.
Derek: There is no investment out there without any risks so naturally there’s going to be some risks, there’s going to be some hesitation but if somebody’s out there, they’re waffling back and forth, should I hire or shouldn’t I hire … Some guys are out there, I’m sure, that have hired, don’t like it and are back to running their one man show and there’s nothing wrong with that.
Martin: That’s right.
Derek: Plenty of guys though, I know that are very successful, do very well and they’re a one man show and more power to them. That is just not where I knew my business model, 10, 15, 25 years down the road, that’s not what I wanted it to look like.
Derek: If there’s somebody out there that’s in that same vein and they’re a one man show and they don’t know how to get out of it, I would tell them two things. Make sure you have the clients or the potential work in line before you hire that employee, in other words, this sounds odd, but make sure you’ve turned down enough work to justify hiring that employee. If you are a one man show that just is sick of working 7:00 to 5:00 but after you’ve finished one trim job you’ve got a week and a half of downtime, well you’re probably not … Even though that might be hard, you’re probably not to the point where you need an employee.
Derek: If you’re in the middle of doing those two to three week jobs, or trim jobs, or whatever you’re doing and you’re constantly during that two or three week period turning down work that you can’t get to, then that’s probably the time that you may need to think about hiring that first employee.
Martin: There’s another thing that happens when you go to a larger company is then you have to start thinking about tools, vehicles, and things like that.
Martin: So, how did you wrestle through that one? Did you have the guy bring his own tools, or did you buy them, or what?
Derek: Now, I supply most of my guys with tools. Obviously in the trades there are guys that you’re going to have as your actual employees and they’re going to be on your payroll, and you’re going to have guys that are, quote unquote, independent contractors, they come to you. They may have their own mini LLC, their mini corporation, they’ve got a workers’ comp exemption and they’re kind of like their own entity even though you’re supplying them with work. If you can find somebody like that for your first employee, that’s golden.
Derek: That guy necessarily is not going to rely solely on you for work. If you go out on a limb and hire somebody, bring them on your payroll, begin to pay all the payroll taxes that are associated with that, all the liability insurance, all the workers’ comp, that’s a whole different ballgame. Those guys, you generally have to buy tools for. Most of the time, at least I haven’t found where I’m located here in Florida, you’re not going to find guys that are wanting to be full time employees that are going to come stockpile with a load of tools, it just hasn’t happened for me.
Martin: What about transportation?
Derek: Generally, yes. Transportation is kind of a must, at least where I’m located. I can’t speak for other parts of the country. We have two vans in our fleet, where I’ve put multiple carpenters together for some of our production trim and that’s just more for logistics. You know, I can get two, or three, or four guys to the same job and I can pay for one tank of fuel rather than try and pay for fuel for two or three vehicles.
Martin: That’s great, Derek we’re going to wrap this up now. Really appreciate you coming on, that was really helpful. Where can people follow along with what you have going online?
Derek: As of right now, you can find us at RedeemedCarpentry on Instagram. It’s @redeemedcarpentry, all one word spelled out. And “Redeemed Construction ” on Facebook.
Martin: With that, we’re going to wrap things up and I just appreciate you coming on and sharing your experience with us today.
Derek: I appreciate it, thank you for having me.
Note: This is our first in a series we are calling “Ask A Protractor.” Where each week we ask one Protractor one question. The regular Wednesday morning featured guests, will continue as well. Stay tuned! 🙂