Keeping Your Small Rigging Business Afloat, Part 2 of 2
In Part 1 of this article, we touched on a number of areas that create problems for small rigging businesses; problems that prevent small companies from continuing operation. Among these were technical inferiority, rigging market shrinkage, uncontrolled costs, runaway business expansion, mediocre accounting practices, and false presentation of capabilities. Continuing, here are some additional reasons that small rigging businesses often fail:
Do you possess insurance coverage for liabilities particular to your rigging business? You may have general liability and workers compensation insurance, however, the nature of your business has higher associated risks. Inadequate insurance coverage can spell an end to your company's existence in the event of an unfortunate incident.
Are you paying wages comparable to the prevailing market? When possible, do you competitively bid subcontracts in order to obtain the most economical price? Do you 'shop' rental equipment rates to minimize costs? Do you purchase materials from suppliers who offer you the biggest discounts? These areas determine the 'leanness' of your rigging business. In today's world, lean companies are the successful companies.
Rainy Day Back-Up
Recent events have shown that very few business types are insulated from cyclical downturns. Construction and rigging can be extremely vulnerable to institutional and governmental funding cut backs, because they are considered less important or discretionary during economic recessionary periods. Do you maintain a monetary reserve that will allow your business to weather these cyclic events? Such a reserve may allow your rigging business to recover more quickly than your competitor. Not having this financial cushion could result in bankruptcy because of a shrunken construction market.
It's All Relative
Many small businesses are created in partnership with friends or relatives. Unsuitable partners and unqualified relatives can be detriments to successful rigging business efforts. First and foremost, make sure your selected active business partner has the level of interest in the rigging industry that you hold. Additional partner attributes are high ethics, appropriate skills, experience, and financial stability. Working or partnering with relatives can be difficult in any circumstance. The same partner selection guidelines above apply to relatives who are partners. Should the situation arise, the hiring process for a relative ideally should be identical to that for any other employee; objective and based on potential merit and overall job contribution. Only employee disgruntlement will follow an act, or even perceived act, of nepotism. (Nepotism is patronage bestowed or favoritism shown on the basis of family relationship). While maybe not illegal, nepotism that leads to large scale workforce unhappiness can be telegraphed to existing and potential customers.
Although less common, small businesses have failed because the previously successful manager has over-delegated the managerial responsibilities to a less qualified individual. For instance, the upwardly mobile manager develops a greater interest in golf than day-to-day rigging business activities. Little attention is given to this failure reason here for the fact that you are reading this article. A form of remote control management also can occur when an unclear plan of managerial succession is in place following the retirement of a rigging business principal. Do you have an established succession plan?
Lack of Exposure
How do you market your rigging business? Do you prominently display signage at your business location? Is your rigging company listed in the Yellow Pages under an appropriate category?
Anymore, if you do not have a website you are at a definite business disadvantage. This will become increasingly true. Not having a website today is like not having a telephone in the 1970s. Outsource the creation of a professional looking website if you do not have the internal talents to do so.