Episode #38 - Managing Your Skilled Trades Business and its Finances
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David Wilton: Thank you for joining us on Money Clip. I am David Wilton, Director of Small Business Banking at Scotiabank. Our topic for today is managing your business and its finances. Again, I am joined by Joel Scopelleti, a partner and operator of Carick Home Improvements. Once again, welcome, Joel.
Joel Scopelleti: Thank you, David.
David Wilton: You bring many years of experience as a partner and an operator of Carick Home Improvements, which is a family-owned business since 1975. Joel, in our previous podcasts, we talked about the importance of sales and marketing, but now I want to look a little bit at the operational side of running a business. It's not only those day-to-day practical issues, it's also managing the finances. What are some of the key challenges that you've faced over the years?
Joel Scopelleti: Well, I would say it goes one, two, three: number one, is finding the client, number two is producing the work and number three is collecting the money.
David Wilton: So, it's all about finding the source of the sales, it's then turning that sales into profitable business and, finally, it's cash flow – collecting that money.
Joel Scopelleti: Yes, absolutely. Those are probably the three most important challenges that we find.
David Wilton: You've highlighted the importance of cash flow and this is an issue that we speak about with our customers across the country in skilled trades and other small businesses. Are there any tips that you would offer in order to keep your cash flow healthy?
Joel Scopelleti: Yes, I think the most important thing is obviously collecting receivables and that's where you have to be focused. But it doesn't start at the end, it starts at the beginning. What I find, what helps us, is having a payment schedule before the job starts.
David Wilton: So the customer has a clear understanding of what's expected. That's great.
Joel Scopelleti: Yes, it's sort of a win-win. The customer knows when the next payment is due and you are not financing their job and it's sort of, you're just working together and that's basically what you want to create, a win-win situation.
David Wilton: Now, it's a competitive marketplace out there right now. Is that a difficult discussion to have when you know that there are other people that are looking for this business too?
Joel Scopelleti: Well, I think what's important is that it's a fundamental aspect of having a healthy business. And when you're a small business owner and you're sort of doing everything yourself – you know, you're cooking the food and you're delivering the food, and you're cleaning up the food – you don't have time and time is very important. So, if you're able to establish a payment schedule at the initial visit, then that's just going to save you time and if the client has a problem with that, then I don't think that's going to be a good client for you. You need a client who's going to be understanding and you have to have a client who's going to let you do your job and you can't do your job without having getting paid.
David Wilton: That's good advice. One of the other aspects of managing a business is dealing with employees and in your business I know you now have employees – not everybody does. But tell me about the importance of managing the people that work for you.
Joel Scopelleti: Yes. Well, you know, there is pretty much six keys to a winning team. Basically, you need strong leadership, you have to be able to be - you are the leader, you are the boss and you have to be strong in that aspect. And you also have to have common goals – your leadership goals have to be common throughout everyone that you work with. Everyone has to know the rules of the game, so everyone has to be, basically, on the same page and you have to have an action plan so people know what you expect from them and you have to have it sort of very clear, clearly defined. You have to support them, you have to support risk-taking. You want your employees - thriving companies need problem-solving employees. You need people to be able to be creative and you need them to think and you have to support that. And, most importantly, you have to have 100% involvement and inclusion with all your employees. I believe that a good team is only as good as their weakest player, so you have to make sure everyone feels they're on a team and working for a common goal.
David Wilton: Joel, those are all great tips. I want to talk to you a little bit about growing your business. For many, that's a key goal, is to become larger and larger, but it does stretch your resources when you choose to do that. How do you deal with those realities of a growing business?
Joel Scopelleti: I am going to make an analogy with building a house. Number one, you have to have a good footing, your footings have to be solid. So, once you are able to get your footings underneath you on solid ground, then it's time to build, to put the foundation wall up. So then, you have your strong footings, now you are able to build the foundation of your business. Once your footings and your foundations are solid, then you are able to take it to the next step. And I think that all starts with - it takes time, and the most important thing is systems – once you are able to create systems for your business, then it's just step-by-step. I think it's not necessarily “big is better,” but I think you have to take it in a step-by-step process. But, like I was saying, if your footings and your foundations are solid, then you 're able to build from there. So I think that's very important.
David Wilton: That's a great analogy. Joel, you've given us some great advice about managing your business and I guess there are things that you would see as being particularly important to be successful. If you were to try and identify those Top 10, what would they be?
Joel Scopelleti: I think number ten will be: Focus on positive goals. Be very clear about your goals, write them down with a timeline, be positive, have positive goals. Number nine: Balance your life outside your work. Schedule time for your family, for your friends, for yourself. If you don't have a balanced life, it's not a satisfying life. Number eight: Profit should not drive you. Profit is necessary, of course – to survive, and grow – but your reputation is built on your passion to enhance people's lives. Number seven: Never forsake training. Training is a sound investment, it's not an expense, seek council from those who are in the trades and who are successful. Number six: You benefit when you give, give because you can. Number five: Sales are essential to growth. Number four: Keep your goals in front of you or you'll lose your way, written goals are your road map. Number three: Good employees seek good businesses, make sure your company is one that they want to work with and you are a leader that they will want to follow. Number two: Most problems come from communication breakdowns, so be aware of communicating. And number one: The most important thing is don't give up. To survive, you have to go beyond your comfort zone, you have to learn part of the business that you don't know. You have to learn about management, you have to learn other things that you don't know – read, go to seminars, listen to tapes and ask questions. Just remember to work hard, work smart and don't give up.
David Wilton: Joel, it has been great to share in the experience that you've acquired over many years. It's been wonderful speaking with you throughout this podcast series. Thanks for joining me.
If you found this information helpful, why not visit www.scotiabank.com/skilledtrades. You'll find lots of helpful information that will position you for success in your business. If you're interested in more information about Carick Home Improvements, visit carickhome.com. That wraps up our third and final podcast in our Skilled Trades series. I hope you find this series helpful and the perspectives and the advice that Joel has been able to share will be useful to you. I am David Wilton for The Money Clip, Scotiabank's business clips for small business. Thanks for joining us.
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