In my experience the first reason for companies not making the transition is that most businesses cannot afford the expense of administrative staff. This is easily remedied by accounting for the extra people in overhead and charging that expense to the customer.

The second reason is that the owner is too busy doing the day-to-day, and does not delegate. There are over 1,200 accountabilities in any business. If there was only one employee, he would have to do 1,200 things to run the business. This list includes buying stamps, cleaning the washroom, ordering kitchen supplies, ordering equipment parts, dropping off supplies, preparing estimates, operating the skid steer, fuelling the trucks, making sales calls, etc. Notice that the tasks are in no particular order! The business owner is literally running around like crazy, trying to do 1,200 things — sometimes all at the same time.

The third reason is that owners do not sort the 1,200 accountabilities into tangible divisions. A great example of this is sales people dropping off equipment while fixing the computer that crashed, and then going to pick up stamps after collecting money to make payroll.

How to divide the business
The five pillars of the business are as follows:
1.Economics: finance, taxes, law, insurance
2.Sales and marketing
3.Operations: estimating, asset management, purchasing, inventory, scheduling
4.Human resources: recruitment, safety, hiring, firing, training
5.Technology: computer software, hardware, training

It is important, as your company grows, to divide your staff in such a way that they are working in no more than two departments, and preferably one.

Physical divisions
In the office: Where is everything stored?
On the computer: Where and how are things stored?
In the shop: Where is everything stored?
In the yard: Where and how are things stored?
In the trucks and on the job sites: How and where are things stored?

Everything must have a department and be stored accordingly, so all information and supplies can be found by anyone at anytime. People should never own the information about where things are stored! Everything must have a home. There must be a department for things that do not have a home. In our company, we call it Purgatory! We make a department if we need to, or give, throw or recycle it away.

Everything must be stored in order of operations. When our trucks roll in at 6:00 p.m., the first thing they drop off are empty skids, then towed cement mixers, then tools, then garbage, then trailers behind the dump trucks are parked and then the clean fill is dumped. The trucks are then loaded with stone and or aggregate/cement/sundries and then parked until the next day. Our yard is set up to minimize wasted motion because we all know time is money. Our yard is a drive-through supermarket, designed to get you in and out past the checkout as fast as possible.

Get rid of stuff that collects dust or else you will end up in the unprofitable junk and garage sale business!

Labeling is key
Use The Five Ss: Sort, Set in Order, Standardize, Shine, Sustain. (Look this up on the Internet for further clarification.) Your business should look like Home Depot! Everything is in a department, easily labeled, so it can be restocked.

Always apply people to the departments, not departments to the people. The expression everyone is replaceable is true. You cannot set yourself up to be vulnerable to the situation where if Johnny leaves, the information and the business goes with him. In addition, you do not want to be held hostage by one employee’s ownership of information.

All things, and I mean everything, must be clearly labeled A great analogy for this is the library. Everyone can find what he is looking for in the library. Returns are brought to the return section and the books are then re-distributed to where they belong. Fire trucks also are organized so that any person from any crew will find an identical set-up no matter where he goes.

Administration
So now that the business is physically organized, so too must the paper flow be organized. In our company the estimate, which becomes the contract, also becomes the written directional tool for the crews to perform the work. The estimate: • Directs the crews on how much time is allotted for each task.
• Tells what and how much material is required for each task.
• Indicates who and where the materials are coming from.
• Tells the equipment and tools required for each task.
• Dictates in what order all of the above is to happen.

Project management
So now that we have learned all this stuff, how does this affect project management? By organizing the business as suggested above, project managers can focus purely on the job and not all the unnecessary logistics behind the scenes. The foreman now has the tools to “run the job.”

In fact, the project manager is more like a client manager, worrying about change orders and sub-trades, because sub-trades require more attention, due to not being part of the in-house process. The client, not the crews, should be the project manager’s biggest worry. The client usually is the biggest unknown, and potentially the most volatile. If your crews are volatile, then you have a whole different problem! Your poor project manager will also become the babysitter and HR rescue squad.

The correct paperwork will, in fact, allow your project manager to communicate with crews more efficiently.

Working on the business
The truth is, an entrepreneur is not a true business person until he is not actually doing the estimates, the installations, the sales and all the day-to-day work. We work for the business that we happen to own.

The next step is when the business owner manages the business; coaches and teaches, but does no or very little actual day-to-day work.

The final step to being a true business person is when you only make strategic decisions, and do not perform any management tasks whatsoever. At this stage business people seem to play a lot of golf!

Are you?
Are you going to lunch with your peers and learning from each other, reading books or articles like this one, hiring consultants to improve your business, networking to find other employees at job fairs, getting involved with your provincial trade association and hanging around with those who are connected and experienced? Are you looking for other lucrative business opportunities, like buying someone else’s business, finding better value and contacts for suppliers, etc.?

These things are all necessary to grow a successful business that works for you — as opposed to the other way round.

Now you now know what to do!The question is, how?
Step 1
Hire that person to relieve you of the admin or the operations part of the business you are currently doing. I know it will cost money, and I have already told you how to pay for it. Yes, you will be taking a risk, because any change is risky, but of course, the only thing certain is change. If you have been thinking of hiring someone to help with administration and are afraid of making a mistake, that is okay, provided the mistake is not big enough to sink you. It must be done, and we all make and learn from our mistakes. This will generally make an instant improvement in your quality of life.

Step 2
• Organize everything in the order that it is picked-up and then dropped off.
• Create a receiving and distribution area.
• Start to organize your business by department, and do not label anything but the department. Create three piles: I absolutely need this, I am not sure, and I do not need this for sure — and then get rid of all the stuff in the last category.
• Start to categorize and subdivide the departments and gradually start to label everything.

This will generally take one to two years and tons of money to accomplish, but remember, it is an investment in organizing your business so you, too, can play golf!

Good luck.
George Urvari has been a partner in Oriole Landscaping, a Toronto-based design-build landscape firm, for over 20 years.