吃瓜不打烊

Quarter 2, 2019 - By Kate Jacobson (Kitchener, Ontario) -In 2016, Jaclyn Carpenter found herself in a situation she never thought she鈥檇 be in.

Carpenter was the chief executive officer at Ideal Restoration and had been at the helm for a decade. A savvy businesswoman who learned the trade from her father, she was excited as she grew her business. But suddenly, the phone stopped ringing.

鈥淭here was no work coming in one month. Then, the next month, still no work,鈥� she says. 鈥淚 reached out to my clients, and they told me the truth: 鈥榊ou鈥檙e screwing up. We鈥檝e given you a lot of opportunities to fix it, and you continue to do the same thing, so we鈥檙e done."

Carpenter says learning the hard truth 鈥� that her quality control had gotten away from her as she expanded 鈥� was difficult, but needed.

鈥淯ntil you鈥檙e in the midst of your own mistake do you truly learn,鈥� she says. 鈥淔or me, the last 13 years has been a series of mistakes that have made me so much smarter.鈥�

Carpenter and Kris Rzesnoski, vice president of business development at 吃瓜不打烊, opened up about their experiences with failure at their session 鈥淩estoration Rescue鈥� at the 2019 International Restoration Convention + Industry Expo. Both say not enough people in the industry are open about failing businesses and hope their honesty might help others.

鈥淭alking about the honest truth 鈥� the pains, the difficulties 鈥� that is important,鈥� Carpenter says. 鈥淲e decided to put on the presentation because there are not enough people being honest about these challenges.鈥�

The Fear of the Unknown

It鈥檚 not uncommon for businesses to fail. In the United States, nearly 30% of new businesses shutter within the first two years of being open, according to the Small Business Association. As time goes on, that number increases.

There are plenty of reasons small businesses fail: lack of market, poor crews and tough competition, to name a few. But regardless of the cause, failure can be tough to swallow.

Rzesnoski bought into a restoration business in northern Alberta in 2012. Business was good, but Rzesnoski felt like he was swimming in a sea of uncertainties as a business owner. He had to learn how to deal with banks, how to work with customers, how to secure financing and more. While he leaned on trusted friends and advisers, the stress of entering a struggling a business was not something Rzesnoski expected would be hit with so many unpredictable factors.

鈥淵ou can predict for some uncertainties and challenges, but you can鈥檛 prepare or anticipate all the hard lessons of the game.鈥� he says.

The deeper he got into the industry as a business owner, the more he realized its pitfalls. Some years were good, while others forced him to look for smaller jobs he would鈥檝e otherwise not considered. He saw unscrupulous companies doing shoddy work, grappled with firing employees or leveling with insurance adjusters on tough jobs.

鈥淩unning a business, you have to make hard decisions,鈥� he says. 鈥淎s a consultant who never had skin in the game or owned their business, you say a lot of things that you wouldn鈥檛 say if you had walked a mile in the shoes of a business owner. [Restoration business mentor] Ken Tucker told me, 鈥極nce you walk that mile, you won鈥檛 use words like never.鈥� I鈥檒l never accept less money. I鈥檒l never cut my bills. I鈥檒l never beg for work. Just wait until you own a business and you can鈥檛 make payroll.鈥�

During his time with the business, he had to deal with a partner passing away, a market that increased with competition, key career adjusters quitting their jobs and the challenge of running a business remotely. It wasn鈥檛 long before he realized that things were not going in the direction he wanted, and it was time to close that chapter.

Eventually, in 2017, he and his partners chose to shut down the business. He then focused his full efforts on developing products for 吃瓜不打烊 and teaching contractors how those tools would help their businesses avoid some of the challenges he faced.

鈥淢ost owners don鈥檛 understand the risks they鈥檙e going into,鈥� he says. 鈥淭hey don鈥檛 understand the required technical capabilities to dry a building properly; they don鈥檛 see the challenges this type of business mandates and the experience people need to have to protect themselves from the liabilities.鈥�

Starting Over

When both Carpenter and Rzesnoski reached their breaking points, they knew they had to reassess their situations. For Rzesnoski, that meant keeping a list of people he was willing to let go at any given point when money stopped coming in. He also turned to trusted mentors to get advice about what to do on years with major losses and learned how to cut emotions out of his decisions.

鈥淩ight now, I sit on the software side, and I still see customers who make these emotional decisions,鈥� he says. 鈥淭hey think, 鈥業 am going to build a great big business,鈥� but they can put themselves out of business so quickly if they鈥檙e not looking at the larger picture. If you run out of money, you can ruin yourself. They get too aggressive too fast; they want to be a big company with the prestige of size, forgetting that this industry is full of peaks and valleys.鈥�

Carpenter was all too familiar with this problem. The pace in which her business was growing outpaced her ability to maintain quality control. As her final product suffered, customers stopped calling, and the company bled money.

鈥淚 was in panic mode,鈥� she says. 鈥淚 had never been there before, but I just had to start firing people and cutting my losses.鈥�

She turned off her emotional connection, she says, and focused on what was right for the business. She had to make a plan, communicate that to her employees and redirect the course. It was hard, she says, and the losses made her take jobs she might not otherwise have considered. But, more importantly, being in that place made Carpenter reconnect with her business in a way she hadn鈥檛 done in a long time.

鈥淚 got too far away from it,鈥� she says. 鈥淚 jumped out onto the field again. If you鈥檙e going to run this business, you need to know what鈥檚 happening out there. I retrained the project managers, and core field staff to deliver top quality work. We fixed the quality immediately and got it under control.鈥�

Admitting Failure is Key to Success

Carpenter was able to turn her business around. She says in the year following her massive downsize, they鈥檝e been able to start hiring again and have seen profit margins like they鈥檝e never seen. A huge part of her success, Carpenter says, was acknowledging her failure. 鈥淭here鈥檚 not a barrier of entry for the restoration business, because you don鈥檛 need much to start a company,鈥� she says. 鈥淏ut for a company to grow and thrive, you鈥檙e going to be faced with periods of high and low volumes of work, some of which are very challenging to overcome. The industry has a lot of volatility, and that鈥檚 the challenge 鈥� getting past those points.鈥� Rzesnoski had a similar sentiment. In all the years he鈥檇 been attending restoration conferences, he鈥檇 never heard someone publically admit their massive failures. When he started out, he knew it wasn鈥檛 going to be easy, but he had no idea it would be so hard either.

鈥淔ive to seven years in the business, I thought I knew the world about restoration,鈥� he says. 鈥淲hen you walk into a conference, you never hear people say, 鈥業 lost $100,000 last year.鈥� They tell you about how many trucks they have, or how many people work for them or how much business they had last year. They never tell you their profit. If you lose sight of your bottom line, the rest of your business doesn鈥檛 matter.鈥�

Both say swallowing their pride, redirecting the course and being honest with themselves (and their employees) was key. They recommend thinking about how to respond to things before the worst happens. Who on payroll would be the first to cut? Is quality control where it needs to be?

Rzesnoski also recommends anyone starting their own restoration company to be proactive in creating a solid business plan. 鈥淢y advice to new companies, or anyone looking to overhaul their business, is focus on your strengths, adopt technologies that make your business better, hire to your weaknesses 鈥� not all owners are going to have the GM or president title 鈥� and make sure you build a culture of doing the right thing.鈥�

Overall, both say the most important factor is sharing these tough experiences with others to further education about the industry.

鈥淚t鈥檚 about skinning your knees, figuring out what you鈥檝e learned from that and adjusting your approach,鈥� Carpenter says. 鈥淭hat鈥檚 the value of RIA: being able to have these contractors share intimate details about what went wrong and sharing the knowledge to help someone else out. We鈥檙e going to have to push ourselves to share our stories.鈥�

ABOUT KATE JACOBSON

Kate Jacobson is the associate editor of C&R magazine. Want to be included in an upcoming issue? Email her at kjacobson@restorationindustry.org.

ABOUT ENCIRCLE

By making it easy to collect, manage, and use field data, 吃瓜不打烊 speeds up restoration jobs, gives visibility into a job's progress, and simplifies the creation and sharing of detailed reports. These reports meet and exceed the insurance industry's strict documentation requirements, improving customer satisfaction. Discover how 吃瓜不打烊 makes managing claims easy at getencircle.com

CONTACT INFORMATION

吃瓜不打烊.
Sarah Wight
Marketing Manager
media@encircleapp.com