When Should I Bring on a Project Manager?

A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.

Contractor Question:

“We are scrambling day to day with the amount of projects going on. My partner has been handling the in field operations. Wondering when should we bring in someone else to help with this. ”

Contractor University Expert Response:

“It may be time to find an additional Project Manager (PM) and have that person manage either the RNC vertical or the replacement vertical freeing up your partner to focus on the other and relationship building. I would distribute duties like this, let your “new” person do tasks like take offs, create rough material lists, stage jobs and work with crews to ensure labor efficiency. (You may also consider sub-contracting your RNC rough-in installs, this is another topic we can discuss later) Your partner would want to keep the builder relationships and do the duct design/layouts. If you are not already doing it, I would suggest you have early and daily stand-up meetings with your crews and staff to ensure everyone knows the RNC and replacement install goals for the day and what is coming up in the week ahead. This meeting is very short…10 minutes max. We call it a “stand-up” meeting because the meeting is so short…no time to sit down. It is part of the 3 Cs of management, Communicate with Clarity and Consistency.

With this hire you want to make sure you have scalable processes and gain efficiencies so that you and your partner can grow the retail service/replacement part of your business. I can help you with that.

Here are my concerns, having a 60% RNC revenue stream is risky. If they stop building homes tomorrow, will you be able to survive? I would love to help you grow your replacement group so that your RNC becomes a smaller part of your revenue stream to the point it is down to 25% MAX. As you may know, RNC does not typically see the best margins, especially compared to potential margins for replacement jobs. RNC can also present cash flow challenges if your progress billing is not set up on your favor.

I was in your shoes, where RNC accounted for 85% of our revenue. We fixed that in time for the housing/financial crises of 2008/2009. If you would like to discuss more detail, please schedule a coaching call and we can get into more detail for your specific situation.”

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