Here at GB Plumbing, we knew we should be starting to hire when we were working over 70 hours a week and not seeing any slow down with jobs coming in. We’re now up to 3 trucks, and are looking to hire again as things continue to keep growing and we want to continue to provide more services to our community.
There are 3 main things you need to balance: 1) Your production vs non-production staff ratio (talked about earlier in the thread, for us its 5:1) - 2) Add up the hours your production teams are working per week and divide it by your base hours per worker (in our case its 35 hours per week but for many its 40 hours); this simple sum will give you how many workers you might need to cover the work available - 3) Finally, look at your production pipeline; are you going to sustain the level of business you currently have (in our case we are seasonal) - Hope this helps
It sounds like it's time to hire for a 4th truck. What's the hesitation?
We are a local Roofing Business in Worcester UK. Established since 1971 and currently have 21 staff all in. When ever we have expanded we always look at work crews versus office/management staff. As we hit certain break points we know that to take on more crew staff will require additional office staff to help manage. We then look at the profit of each crew minus the increase in office staff to manage them. We have found over the years that expansion is not always the best if you end up having more staff but no more profit.
Let me just jump in to add that I've found "Markup and profit a contractors guide" by Mike stone to be an incredible resource for this. He walks through all the basic contractor math and shows exactly how to calculate the effect on markup of hiring additional staff (or any other overhead expense). He does a really good job showing you how to work the math backwards and forwards to figure out either A. what your markup needs to be to sustain certain expenses (such as additional office staff) or B. what additional sales volume is required to make the new expense work at the same company markups.
There are lots of resources out there that cover this type of material but I can say hands down that Mike Stone's books are the best. I also recommend profitable sales, he's got a book on estimating as well but I don't find that one to be as valuable as "Profitable Sales" and "Markup and Profit". Those two books are always close at hand for keeping the knowledge fresh.
Thank you for this, we definitely agree to always looking at your numbers first. And like you said there has to be a balance of work crews to then office staff. You don't want to over run your administration staff.
Thanks for sharing your experience—it’s impressive to hear from a business that’s been around since 1971! Your approach to balancing crew and office staff is a great reminder that growth doesn’t always mean adding more people if it’s not driving profit.
Don't always assume that just because you're running around like a chicken without a head, that you need to hire more employees. Try determining what every employee should bring in monthly. make sure you hit that goal consistently before hiring more.
for example, if all of your employees do the same services and hold the same position, and you expect each one to produce, lets say $30k per month, then you would not outfit a fourth truck until you were consistently reaching or exceeding $90k a month.
you may find that you are super busy, but it may be due to inefficiency, routing issues, new guy mistakes, and follow-ups. the way to confirm you are on track is by ensuring each truck is making what it should make before growing.
Thank you for your insight. We definitely agree to always look at your numbers first, and make sure everything and everyone is running efficiently before hiring.
Great insights! I love the idea of making sure your team is producing a consistent revenue before adding more staff. Focusing on efficiency and profitability can really help avoid the common pitfalls of growing too quickly.
GBPlumbing Curious how long it took for you to get to 3 trucks? What services are you adding? Exciting to see that growth and thanks for sharing these tips!
It took us 4 1/2 years to get to 3 trucks and 5 guys. In the area we live, we look after a lot of cottagers and added a client list to our business of over 1500 customers (give or take) from a local retiring plumber.
We offer new builds (this year we started a new subdivision with a contractor), water/sewer hook ups, emergency service, renovations, and some commercial for our downtown businesses. We're hoping to add drain cleaning with a jetter in the next year.
My business is long way from that but I would guess i would follow your lead on this one. When ever I would see that the work is coming in pretty steady and that we are busy at least a month or to months ahead - I would definitely start hiring people.
Thank you for responding. I agree, once you're booking a month or 2 out, to keep up with service (plumbing emergencies), we had to hire.
I am in carpentry industry. Mainly manufacturing stairs and installing railings.
