ANOTHER UNIT – IS IT TIME?
Over the winter and now as spring approaches, we at HMI are seeing more customers securing a second or third unit than ever before. We thought it would be valuable to explore the circumstances that motivated these customers to take the next step. The sales and service team interviewed a sampling of these elite concrete lifters to try to ascertain their decision logic so we could share.
PROFIT x 2+
Basic business math suggests the introduction of a second unit (or more) has an expediential effect on profit. It’s simple – with the introduction of another unit you are doubling (or more) your profit and probably not increasing your overhead. The net effect is increased profits and profit margin. Nearly everyone we interviewed referenced this concept in some way and in the end INCREASED PROFIT was the motivator.
- YEARS IN THE BUSINESS – When entrepreneurs, who are making the move, to a 2nd and 3rd unit, entered the business varies greatly. The pace of business growth or the decision to expand to a second market appears to vary greatly based on their individual goals. We saw no correlation as to the type of market; urban, suburban, or rural.
- OWNER ESTIMATOR – None of the company owners ordering a second unit are actually doing the work. Over 60% participate in estimating.
- SERVICE AREA – All interviews suggested they service a 150 – 200 mile radius from the primary business address. Over 60% plan to have an additional unit focus on a new territory and plan to domicile the new rig in the new market of focus.
- STAFF – Over 66% of the businesses ordering an additional unit will be adding an additional estimating resource to the company and their designee as the crew leader for the new unit has been active doing the work for over 2 years.
- MIX OF BUSINESS – Interviewee’s estimated that 75-90% of their work was residential with only 1 responding that they did governmental work.
- THE GUN- All interviewee’s switched to the EliteONE gun (released in 2016). It appears that efficiency in reduced downtime and other benefits contributed to their confidence to invest in further growth.
The information gained from the asking of specific questions of customers ordering additional units was telling. It appears that, from the class of current business owners planning significant growth in 2018:
- They spend their time working on their business and not in it.
- They plan on expanding to new markets.
- They have focused on training and retaining staff in anticipation of the investment.
- They continually update their system with the emerging technology and equipment that HMI provides.
We all know “every lift is different.” The same is true with each concrete lifting business. The entrepreneur’s objectives, the market and a multitude of other variables contribute to a decision to expand. Hopefully the information above assists you since we all know much can be learned from the experience of others. Sometimes just a reminder of the questions to ask yourself helps.
If you have contemplated a second unit for your concrete lifting and leveling business give HMI a call. We would look forward to assisting you in making your future 2x + successful.