Tag Archives: growth

One question I’ve received often over the years has been, “Brad, how do you know when to add another service?” This question, or some form of it, has come from young business owners who are desperate to find some other income stream or from the more seasoned owner realizing that to become a bonafide pavement maintenance “specialist” they would need to expand their vocabulary and offerings to customers.

Let me share a few thoughts and observations that I’ve made over the past fifteen to twenty years that might aid you in your own evaluation of growing your business. Certainly, the lessons learned by others might prove helpful to you.

When NOT to Add Service

It might be helpful to quickly address some poor times to add new services.

1. When your primary business is experiencing increased amounts of customer call- backs and rework. This strongly suggests that your own focus on quality is in need of correcting. Fix your quality problems first and you might not be tempted to expand your company.
2. When an employee says to you… “I’ve done that before.” There is always an employee, usually a new hire that can be quite convincing on what they’ve accomplished in previous companies. In most cases this type of worker may be a new hire for a reason.
3. When you notice increased competition. Just the addition of new competitors shouldn’t send you packing for another service to provide. Competition, especially new competition, can be good for you. Such competition often adds pressure to getting things done right the first time, can force better attention to details, and generate a more creative mindset for marketing and sales.

Now, there are certainly more reasons why you might want to think twice before adding new services but let me provide you some proactive and positive reasons to add new services. [pullquote]Add a new service when it will compliment and further expand new business opportunities with existing clients.[/pullquote]

When to Add New Services

1. When adding a new service will compliment and further expand business opportunities with existing clients.    This is the primary reason to add a new service. If your current and paying customers are asking you to take on additional pavement maintenance services this is a good sign that you and your crews are doing a good job on meeting customer needs and consistently providing quality.
2. When your profitability is running consistently higher over the past season or two. It’s doubly difficult to acquire additional equipment, add another crew, and learn another service if you are not making much money.       Profits are good and they should be used to reinvest into your own company. Expanding into new services is made easier when you’re profitable.
3. When a specialty contractor is technically proficient but has little to no business savvy. It is just amazing how many technical experts get into power washing, curb and gutter, Infrared application, seal coating, etc. who can’t run a business. Offering to purchase one of these contractors out might be a “win-win” for both you and the business challenged owner.
4. When there is a new geographical opportunity available and it could be getting your foot in the door. Pavement maintenance contractors have begun a new service where they have little to no current business at and then use this new addition as a lead in for their existing services. This is sort of coming through the back door but it can be a strategy to add a new service that ironically opens the chance to do more business with current services.

Certainly one or more of the four reasons to add a service should be in place before expanding. It is important to also note that if you are seriously looking at adding a new service, develop a business plan. This plan should address such topics as: market needs, competitors in the market; cost of needed equipment; suppliers and their locations; and, type of customers to name just a few considerations.

The last consideration perhaps is that you really to have to have the proper attitude and mindset. Expanding a new service will renew your commitment to be patient and consistent. Prepare to have the needed capital needed to keep the new service moving ahead while you and your workers are learning the business.

Adding a new service should be a positive and profitable experience. If you’ve never added a new service you are in for a real challenge to your old policies and approaches. Be open to new lessons and best practices that you can learn and even pass on to your existing services. You might just end up adding a new service that becomes the new profit leader for your company in the future.

Brad Humphrey
Founder & President
Pinnacle Development Group