Paint Contractor's Manual

Chapter One
Organizing Your Business

This book is written for painting contractors. If you've been working as a painter for several years and want to go into business for yourself - finding clients, selling the job, supervising the work, and collecting the money when it's due - this book is for you. If you've been running a paint contracting business for several years and want to compare notes with another paint contractor, this book is also for you. I'll let you look over my shoulder to see how I run my company. I expect that you'll learn enough to make the time you spend with this volume worthwhile.

Before I begin, let me explain a little about how I got into the business. Some of my experiences may sound familiar to you.

My partner and I have been in the paint contracting business for a total of 20 years. We learned the business through trial and error, asking questions, and determination. When we went into paint contracting, it seemed simple. All we needed were a couple of brushes and rollers. We learned very quickly how naive that was.

Our first job was an expensive home in an exclusive area of Malibu Beach, California. When doing custom work, you have to know a lot about preparation, color selection, paint application and, most important, getting the right price. My partner and I knew absolutely nothing about any of these subjects. So you could say we were bound to get off to a bad start. In fact, we lost our shirts, to say the least.

You might ask how we got a big custom job in the first place. Well, there's an old saying in the business world: "They saw us coming." Because we knew almost nothing about paint contracting, our first client knew he could get the job done for peanuts. He also knew we would have to do over anything he didn't like. Inexperienced paint contractors end up doing the work over and over again until the client agrees to pay up. Of course, we weren't licensed. So we couldn't sue to collect.

Naturally, the job took forever. We had to paint everything at least three times before the customer was satisfied. But there was one payoff on that job that we didn't expect. We learned more in that first month than on all the jobs we did in the next year.

Having launched myself into a career in paint contracting, I decided to find out as much about the subject as possible. I soon discovered that little has been written on the subject. I searched libraries, book stores and technical schools for anything that would help. What I found had almost no practical value to a paint contractor. So I used the only method available. I kept working and asking questions.

During those early years, my partner and I would start many mornings over a cup of coffee at the paint store. Usually we met some old-timers there who would share their knowledge of painting with us. If we ran into a problem on a job, we would be at the paint store early the next morning trying to pin one of these guys down. This worked more often than not. But we soon learned that no one knew exactly how to solve every problem. Old-timer Joe would tell us to mix our paint one way. A few minutes later, old-timer Bob would tell us that Joe's method would never work. We should do something else. This usually left us with only one alternative. We listened to everything the old pros said. Then we went out and started experimenting until we got the right result.

We also discovered that employees working in paint stores knew less than we did about applying paint. Most paint store employees have little practical experience. Some are working as clerks because they couldn't make it as painters. Most knew enough to help the average homeowner, but quickly got lost on the finer points that concern a professional painter.

We did, however, find a couple of retired painting contractors who were working in paint stores. Without them I'd probably be in some other business today. There's no substitute for years of experience on a job. Those guys knew more tricks and time-saving methods than we could imagine.

Our business grew over the years. We went from a little two-man company operating out of the trunk of a car to a full-service painting business with 18 employees. We've done every type of paint contracting: custom residential, new custom homes, industrial, commercial (like banks and stores), tract homes, apartments, remodels, new construction and large condominium projects.

Over the years we've worked hard and learned a lot. We've worked many 18-hour days and seven-day weeks to get the job done. We've worked with general contractors, architects, homeowners, and interior designers. We've learned that every type of work requires specialized know-how - knowledge of the best and quickest way to get the job done. Using an 18-man crew to paint 185 condos is an entirely different business than doing a custom home for a designer.

Running a painting contracting business can be good work. You can make a nice living at it. And there are advantages to working for yourself. As the business grows, you're building an asset that grows in value. Of course, there are also disadvantages. It's demanding work with risks and potential problems on every job. And you have to meet and deal with the public every day. But I enjoy my work and expect that you could also.

I'm not going to explain the basics of painting here. Several books are available that describe all a homeowner needs to know to apply paint and coatings. But I am going to suggest ways a paint contractor can improve accepted application techniques. There's a difference between a Saturday afternoon craftsman who enjoys putting a coat of lacquer on a cabinet and a paint contractor who's coating hundreds of square feet of casework. I'll explain the way production painting has to be done to make a profit. And I'll also show why production painting doesn't have to mean a sacrifice in quality.

Most of this book covers the "how-to" of running a paint contracting business. It takes both good painting skill and good organizational skills to build a paint contracting company. You're not going to make it in the painting business if you don't understand production painting. And you're never going to make it as a production painter if you can't run a painting business.

Emphasis will be on what distinguishes a successful paint contracting business from a company that bumps along year after year, doing O.K. in most years, but never really becoming an established name in the business. In the years I've worked as a painter and paint contractor, I've noticed that the most successful, most profitable painting companies seem to have a lot in common. That's what I'm going to dwell on: what it takes to establish and build a successful painting business.

Before we get started, I want to warn you that I refer to "he" and "him" rather than "she" and "her" throughout this book. I do this for two reasons. First, most professional painters and owners of painting companies are male. I realize that women make good painters. And I know several women that are running successful painting companies. But men are still in the majority. The second reason is convenience. It's easier to stick to one pronoun. And I'd rather not invent a pronoun like he/she that would cover all the bases.

So don't think that my choice of gender is intended to exclude anyone. Every reference to the male of the species is intended to include the female. Maybe in the second edition of this book I'll make all my pronouns female just to balance the scales.

Having covered these preliminaries, let's get down to business.

Setting up a system of organization is the subject of this chapter. Good organization is the foundation of every successful business. So that's where we'll start - with the foundation.

Getting Organized

The main difference between a freelance painter and a paint contractor is organization. It doesn't matter whether a freelance painter has his paperwork organized. He's paid for his time and craftsmanship. Organization may be irrelevant. But for everyone else in the painting business, organization is essential. Once you put that first employee on the payroll, you're running a company, and that company has to have procedures, standards and objectives. That's organization.

The foundation of every professional company is good organization. Good organization is just having a place for everything and putting everything in its place. It's deciding who does what job, what procedures to follow, and setting up guidelines for your company's success. Without organization, you have misdirected effort, confusion, neglected opportunities, waste, theft, and jobs half-completed or never started. Organization is essential in the painting business, from maintaining the company files to estimating, from painting a room to making phone calls.

How do you organize a business? Actually, it's a simple process. It starts with setting some goals. One major reason why many businesses fail in their first year is that the owner didn't have a business plan, some goals to shoot for. Reaching the goals is the reason for putting in all those long hours. If your goals aren't clear, your effort may be misdirected, wasted, or both.

Company Goals

Have you ever asked a small boy what he wants to be when he grows up? Usually you'll get an answer like, "I don't know," or "I want to be a doctor. Or maybe a plumber, like Daddy. But I'd like to be a cowboy, too. Or maybe a pilot!"

Now, that's fine for a child, but when you're talking about your business, your livelihood, your future, you should be more precise. A lot of maybe's and I'm not sure's will add up to no direction. Take my advice. Make your decision. Decide exactly where you want your business to be in ten years. There's nothing that says you can't change your goals as you go along. The important thing is to have an express goal as a guide.

You could start off in the painting business wanting to do top quality custom work and nothing else. After a few years, you might decide to expand and take on new construction, possibly dropping custom work altogether. That's perfectly all right, as long as you continue to set new goals and define them precisely.

Set optimistic goals. But also be realistic. Most beginners in the painting business want to have the largest, most profitable company they can imagine. That's fine. But with scope like that come problems of the same size: employee problems, cash problems, accounting problems, legal problems, and many more. Maybe you'd be more comfortable with a slightly smaller company with a few less problems.

Setting goals is even more important if you have a partner. Both of you should agree on exactly where the company is going and how it's going to get there. Bungling these initial steps - establishing company goals and ideals - is the most common cause of failure in partnerships. If you've got one or more partners, get an agreement on goals. If you don't, you'll end up with two partners in the same harness but pulling in opposite directions.

Here's an example of a company goal:

I will have eight to ten qualified painters working for me. The company will have two vans, three trucks, and all the tools and equipment necessary to do our work. We'll have a fully-equipped office with a secretary. We'll have well-established contacts in the business community and established credit where needed. There will be enough work to keep most crews busy nearly all the time. Annual volume will be $500, 000 and our after-tax profit will be 5% of gross.

That's a reasonable goal. We could start working on it today. But to be sure we're on the track all the way, let's break that ten-year goal down into some intermediate goals that happen a little sooner:

After one year we should be 10% of the way to the final goal. After two years we should be 20% of the way there, and so on. After two years volume should be $100,000, we should have two painters on the payroll, and profit after tax should be 5% of $100,000, or $5, 000. If you hit an intermediate goal sooner than expected, that's great. Simply adjust the remaining intermediate goals so they still reach the final goal at the time you established.

The final step in the goals program is to type up a neat copy of the finished product. Post it near your desk or on the back of a closet door. Study it once a week to see how you're doing and to remind yourself what your next move should be. If what you're doing is getting you closer to the goal, keep doing it. If what you're doing isn't taking you there, determine what changes need to be made that will get you there.

Money to Meet Your Goal

So far so good. We haven't talked about how we're going to get there yet, but at least we've established the direction and have a yardstick to measure success or failure every year along the way. Now, let's get practical. A $500,000 painting company is a pretty good-sized business. It will take some money to keep that business running. Let's figure how much.

You'll need four or five trucks, some office equipment, some specialized painting tools and equipment, and probably a small inventory of materials and supplies. The biggest investment will be in receivables and work in progress.

If your company is like many other painting companies, you'll need an investment of about $200,000 to run a yearly volume of $500,000. That probably seems like a lot of money. But a successful painting company needs that much working capital. Here's a breakdown. Allow $80,000 for receivables. At a $500,000 annual volume, you're taking in over $40,000 a month. If bills are paid about 60 days after they're sent out, that's $80,000 owed but not yet paid. Work in progress may eat up another $20,000 to $40,000 in labor and material advances before the job is finished and can be billed out. So receivables and work in progress together come to about $100,000.

You'll need roughly another $100,000 for equipment, supplies and materials. Five trucks, painting equipment, and tools will probably tie up about $75,000. Figure on spending about $25,000 for office supplies, equipment and a small inventory of painting materials.

Do you think you can get along without this $200,000, or with a lot less? I doubt that you can. I've seen some painters try. It's a constant struggle to run any business without adequate capital. And a painting business is no exception. The slightest little upset and lawsuits and lawyers become thick as flies around watermelon rotting in the August sun. Don't bet that you'll need one cent less than $200,000 in working capital to run a $500,000-a-year business.

Where are you going to get this $200,000? You can borrow some of the cash required. Banks will lend about 80% of the value of the trucks. The maximum loan is probably about $60,000. Material suppliers will bill you for materials and you can take 30 or 60 days to pay the bill. That's known as trade credit. It's like giving you a loan. But trade credit will be only $10,000 to $20,000, even for a fairly large paint contractor. That still leaves you about $130,000 short. Where's that money going to come from?

Fortunately, there's an answer. Most successful painting contractors have discovered that a profitable company will generate its own working capital. Remember our goal of a 5% profit after tax? Let's make some assumptions about the business and see how that 5% profit adds up during our ten years of growth.

We'll assume that business volume grows at $50,000 a year, reaches $500,000 at the end of ten years, and that profit averages 5% after taxes. Run that through your calculator and you'll discover that profits total just short of $140,000 for the ten years. That's the cash you need! The money's found!

But describing the process is easier than doing it. The hardest part is making that 5% after-tax profit. The next hardest part is leaving the profit in the business. Taking all the profit out of the business each year makes sustained growth impossible. Resolve right now to earn a 5% profit after all expenses (including your salary) and taxes are paid. And then resolve to leave that profit in the business, no matter how much you would like to have a new truck or some office furniture.

It's important to keep in mind that in the example we just covered, we are looking at a business that could, ten years down the road, be a $500,000-a-year operation. Don't let the large figure of $200,000 in operating expenses throw you off. This is a long-range goal and is accomplished by an increase in volume, production and profits on a yearly basis.

The first-year goal is 10% of the $500,000 volume, or $50,000. That's a realistic goal for someone just starting out. Your operating expenses for a $50,000-a-year volume will be approximately $15,000 to $20,000 for that first year.

Remember that this is a step-by-step process. Set your long-range goals and build each year to accomplish them.

Once you've made those resolutions and have a clear goal in mind, you're ready for the next steps.

Using the Numbers

I'm sure you've seen advertisements that show a group of executives in three-piece suits seated around a conference table. At the end of the table is a large easel that holds a graph with some lines or bars or pie charts. You're supposed to infer that these executives are making an important decision based on some set of company figures.

I don't know whether decisions are made this way in large corporations. But I do know that every painting contractor needs to know what's happening in his business. And the best way to follow day-to-day activity is to keep track of the key indicators that show how the business is doing. These indicators can be like a road map that shows where you've been. Even more important, they're predictors of what's going to happen. Find a set of key indicators (numbers) that are easy to compile, easy to use, and easy to understand. I guarantee that these indicators will help you avoid a lot of grief and show the way to new opportunities.

The indicators you use should show how each area of your business is doing: promotion, estimates, jobs sold, production, work completed, and receipts. The system doesn't have to be complicated. In fact, the opposite is true. The key indicators should simplify your job.

I recommend that you keep track of only about six key indicators. These are explained in the following paragraphs. You may select slightly different indicators or decide to use other figures. But it would be foolish to keep track of 20 or 30 statistics in a small company. You don't want to spend any more time than necessary doing paperwork. The idea is to find the most important areas in your business and watch them like a hawk.

The indicators I follow are:

1. Promotion: Dollars spent on promoting company services.
2. Estimates: The dollar value of estimates completed and submitted to the customer.
3. Jobs Sold: The dollar volume of contracts signed.
4. Production Hours: The number of hours worked by painters.
5. Work Completed: The contract value of work finished in the period.
6. Gross Income: Dollars billed out (on invoiced work) and cash received (on cash-on-completion jobs).

Pick a cutoff time for your key indicators. Anything that happens after that day goes into the next period. You'll probably want to use a one-month period. But some figures are so important that you may want weekly tallies.

Notice that these indicators follow in a logical progression. First, you advertise. The ads produce inquiries that result in estimates. Successful bids result in signed contracts. Then the painters begin to work on the job. The job is finished and payment becomes due. Finally, payment is received. If one indicator is falling, you can expect the indicators downstream to drop off shortly. If one area is doing well and the indicators are going up, the indicators that follow should head up in a week or two. Figure 1-1 shows how the various indicators generally correspond with each other.

Here's an example: Let's say you've been skimping on the promotion budget for several weeks. You were just too busy to do any new promotion: no letters sent out, no phone calls to contractors, and so on. What happens? You can expect fewer requests for estimates. A week or two later, the value of contracts signed will fall. The following month your painters will have less work to do. Less work will be completed. Finally, receipts will drop off.

Here's another example: You're looking at the figures for production hours. It's running at about normal. But sales and estimates are up more than 50%. You've probably developed a hefty work backlog. Some customers are waiting for work to begin. That's a bad sign if the wait is getting too long. Maybe you need to add some manpower temporarily until production is in line with sales. Suppose the reverse is true. Sales are down but production hours are steady. It could be that your crews are stretching out the work because they suspect a layoff is coming. Closer supervision may be in order.

You can see how useful these indicators are. With a little practice, you can read them like a book. And as you develop more than one year of figures, the numbers become even more valuable. Month-to-month comparisons aren't always valid because of normal business fluctuations during the year. For example, you would expect December production and receipts to be below October production and receipts. That's normal. But if December of this year is a lot slower than December of last year, you should know why.

If you've never had your own business before, or if you're not crazy about paperwork, don't panic. Collecting numbers needed to track the key indicators doesn't take much time. And it can make your company much more efficient and profitable.

The indicators help you spot problems before they happen. Sometimes the owner of a business will get so busy that he can't see the forest for the trees. I know that happens to me. The key indicators help you step back and see the big picture. They keep you in contact with the vital signs of your business. You can see what's happening right there on paper. You don't have to rely on impressions or hunches. But be realistic about the indicators in your business. For example, just because your promotion expense suddenly jumped 50%, don't expect estimates to jump 50% the following week. The pattern of the response you get will look more like Figure 1-2. It takes people time to read those letters and respond. Not everyone who's going to respond will call in the first week or two.

Use the key indicators correctly and you'll have an excellent tool for measuring the performance of the most important areas of your business. That's a key step in getting your business organized.

The Organization Board

Look at Figure 1-3. It's an organizational chart for a painting company. Joe and Frank have identified the five major areas of responsibility in their company and either Joe or Frank has been made responsible for each. Under each area of responsibility is a list of the duties in that department. I call this chart an organization board, and I think every painting company should have one.

An organization board is an X-ray picture of your company's structure. It shows who has what job and what that job includes. In a larger company, the Org Board will be a very complicated diagram with lots of sub-departments and functions listed under each major division. In a smaller company, the board could be as simple as our example. The only important thing is that it makes clear who does what. It should show at a glance every significant function in your company and identify who has responsibility for that task. If you're going to be productive and show profits year after year, your organization has to run smoothly. An Org Board is designed to help it do just that.

Start your Org Board on a piece of posterboard. Keep it neat. Leave plenty of room for expansion in the tasks listed. Post the board in your office. If you don't have an office, make the Org Board small enough to carry on a clipboard or in a briefcase.

The nature of an Org Board is that it keeps growing and getting more specific. Every time there's a problem in an area that isn't listed on the board, add responsibility for that task under someone's name. If there's a question on who has responsibility for some function, change the Org Board so it answers the question. When someone new is hired, he or she should be added to the board. The board is never complete. It just keeps getting better and better in defining who does what in your company.

If you're running a one-man company, making an Org Board will identify the range of tasks that have to be done. The Org Board will help you divide your time among all the tasks. Some time has to be reserved for each task each week so that all bases are covered.

Many small painting companies neglect promotion, let bank statements accumulate unopened for several months, or fail to complete estimates because no one took charge of getting the work done. The Org Board will solve problems like that. It places responsibility clearly on some individual and makes that delegation clear to everyone in the company.

Getting Things Done

If you have the opportunity, watch a successful, highly-productive person work. As likely as not, you'll notice something about the way he tackles each problem. First, his method is probably both organized and efficient. Work follows a logical sequence. There's little wasted motion or idle time. But notice something else. He probably keeps working on each task until no further action is possible. And that's the key, completing work on each task before starting the next, even if there isn't enough time to finish all the tasks.

What does this mean to you? I'll explain it this way. Imagine that you're at your desk and have an hour to work on an accumulated pile of correspondence, bills, notes, advertisements and phone calls that have to be returned. There isn't time to finish everything. What's your way of handling this problem?

A less-organized person would pick through the pile, pulling out something here or there that seemed interesting, working more or less at random and finishing work on little or nothing. If that's the way you usually tackle a pile of accumulated mail, there's a better way.

Let me suggest the way it should be done. First, do the easy part. Discard or file everything that doesn't need any further action on your part. Throw out the advertisements, file the receipts, sort out what has to be given to others so it can be passed on to them later. Just doing that should reduce the pile by half. Notice that you've completed all that can be done on each item discarded, filed or collected for others.

Next, set some priorities. There's only an hour available and five minutes is gone already. Set aside what can wait until more time is available. That may reduce the pile by half again. You're probably left with a small pile that needs your immediate attention. That's the place to concentrate your effort.

Work on each problem left in the pile until work is finished or nothing further can be done.

Review each invoice for accuracy. If correct, write the check, put it in an envelope with a stamp and put the envelope where you'll remember to take it to a mail box. Then file your copy of the invoice. That finishes it.

Answer phone inquiries one at a time. Return the call, answer the question or make the appointment as appropriate. When you hang up, note the time and date in your appointment book or send a confirming letter or quote immediately. File a copy. That finishes it.

If you're reviewing the monthly bank statement, scan the checks, find the total of outstanding checks and deposits, reconcile the statement, sort the checks into numerical order and file them. That finishes it.

Keep going like this, finishing as many items as possible, clearing them completely off your desk and into a file, the trash can, or a pile that you're going to give to someone else. Finishing a limited number of tasks completely is always better than working a little on all tasks. Finishing part of any job is inefficient. Time is wasted whenever you look at something and decide to do nothing or leave it half completed. To get things done, adopt this rule: If you start it, finish it.

This rule doesn't apply just to office work. It's true of all activities throughout the day. Starting something you don't complete leaves a little bit of your attention stuck there, whether you're conscious of it or not. Do this several times a day, day after day, and you've accumulated piles of distractions everywhere you turn. That makes reaching goals more and more difficult.

Painting is usually more efficient if you finish each part of the job before going on to the next. Assume that the job is to paint one room. First, drop it out completely. Cover everything. Use masking paper where necessary. Second, prep the room. Dig out all the cracks. Fill all the holes. Prime all the raw wood. Do your finish sanding. Dust everything. Third, paint. I know that drying times, some primers, and use of scaffolding make this impossible sometimes. But when possible, it's more efficient to complete what you start before going on.

If you aren't using this system now, try it. And encourage employees to do the same. You'll notice the improved productivity.

Company Meetings

Once a painting company has more than two or three employees, company meetings will prevent problems, resolve disputes and improve coordination. These meetings could be weekly or monthly. They could even be held only as needed. How often isn't important. What is important is that you provide some official forum for the exchange of information.

In a company with no more than six or eight employees, you probably want everyone on the payroll to be present. In a larger company, only the department heads and key field supervisors would be invited.

Keep in mind that meeting time is nonproductive time. No work is getting done. There may not even be anyone available to answer the telephone. That's why you want to keep meetings as brief as possible. I've found that meetings held at 3:00 Friday afternoon or at 7:00 Monday morning tend to be brief and more to the point. These hours are generally less productive anyway, so we lose less productive work.

Your preparation for the meeting is important. Getting ready for a meeting forces you to sit down and take a look at your business from an executive point of view. After a hard week of painting, estimating making phone calls, and handling customers: you need to review results, evaluate problems, and plan for the future. As the owner or partner in a business, it's your responsibility to give the company direction and momentum. You do this by reviewing company goals and evaluating progress toward those goals.

As part of your preparation, make a few notes on the topics to be covered. Something like the list in Figure 1-4 may be enough. Be sure to include a time when the floor is open for anyone to bring up any company problem. In a larger company, you may want to give all the participants copies of the agenda so they can follow what's been covered and what's coming up.

You, as the boss, call the meeting and act as chairman, president and judge. If you have one or more partners, these responsibilities are shared according to your ownership interest. In a partnership, the partners should meet privately before the meeting to agree on an agenda. You may want to meet again privately after the full meeting to reach joint decisions on problems that have yet to be resolved.

Some topics will be on the agenda at most meetings. For example, you'll want to review changes in the key business indicators (promotion, estimates, sales, production, work completed and receipts). The Org Board should be there to review and change if necessary.

One prime purpose of company meetings is to resolve problems that require joint action or a decision by the boss. Usually you'll want to cover the most important problems that have come up since the last meeting. But keep in mind that this isn't the place to administer reprimands. That should be done privately. Neither is it the place to resolve problems that concern only one or two employees. Why waste the time of those that aren't involved?

Use the meeting to dispense information that everyone should know, to get ideas from everyone concerned with a problem, to coordinate the effort of all when coordination is needed, and to form a consensus on how to make the company run better.

One advantage of a company meeting is that it brings together people with different areas of responsibility and different perspectives. These people see things in a different light. Get the benefit of these perspectives. The meeting isn't just a place for the boss to pass out information. It's also a good time for the boss to learn about what's going on in the company. Make the best use of this opportunity.

No meeting should end without a concrete assignment of tasks and a memorandum of what's decided. Make notes yourself or have someone else make notes on decisions, who is to do what and when it's to be completed. Before the meeting is adjourned, read back the list of decisions, assignments and deadlines. That makes misunderstandings less likely and helps guarantee compliance by everyone concerned.

Wearing Many Hats

In any business, but especially in a small business, one person has to handle many jobs. When you finish an estimate and start on the week's bookkeeping, you're switching roles. Take off your estimator's hat and put on your accountant's hat. On most days you'll switch hats several times, from estimator to salesman to manager to painter. You may not even be aware that you're switching roles each time it happens. All of it is just your job.

In a one-man company, the definition of each job is less important. The one man has to do it all. But as a company grows, areas of responsibility have to be defined more precisely. Otherwise effort is duplicated, two people or departments will be working at cross-purposes, and some tasks will be neglected.

When you have several people on the payroll, labeling hats and defining jobs is important. Exactly what does the estimator do? What are his responsibilities? What policies does he follow? The same is true for every hat in the company. If hats are labeled and defined correctly, there should be little or no duplicated effort, less conflict, and fewer tasks neglected.

In a small painting company, job definitions don't have to be in writing. Your Org Board may be the only job definition needed. But when questions begin to come up about who should be doing what, it's time to have descriptions for the key positions. A job description makes judging performance easier, clarifies the tasks each person should handle, and simplifies the training of new employees.

Here's an example. You've been wearing all the hats in your company for two years. You know each job inside and out. But now volume is so heavy that you just can't do it all. You're ready to hire someone or promote someone to fill the position of field supervisor. The person you hire probably has experience as a supervisor. But it's unlikely that he's ready to step into your shoes and do it your way right from the start. A good job description will smooth the transition period and make the new supervisor a productive team member in the shortest time possible. He'll know exactly what's expected, the routines to follow, the people to contact, and so on.

If the person you hire has never been a supervisor before, a clear job description will shorten the training period considerably. A good job description will also eliminate many excuses, including the old l-thought-Frank-was-going-to-do-that routine. Even in a large company, everyone needs a job description. The description doesn't have to be more than a page or two long. But it should be detailed enough to leave little room for misunderstanding. And it has to cover everything required of that job. Be sure to include in the description some standards for evaluating the employee's performance. Everyone should have a set of goals for his work, just like you have goals for the company.

How do you decide what each description should include? Easy! Just keep track of everything the person holding that job does and forgets to do for a month or two.

A Good Policy

Every company has policies and procedures. They can be informal understandings that are never written down, or they can be impressive bound volumes. I'm going to argue that written policies are best. You don't have to go overboard, but typed pages available to everyone make it easier to enforce rules. Everyone knows exactly what the rules are. Written rules make it easier for new employees. And the rules are impartial because they're down on paper before some infraction brings a specific person into the picture.

How do you establish company policy? Easy! Policy is what has worked in the past and what you expect to work in the future. Policy is different from an Org Board and isn't like a job description. It applies to everyone in each category. It's a set of rules and regulations for those employees. Figure 1-6 is a personnel policy for office employees in a painting company.

Business, like life, is a learning experience. Early in life you made it a policy to keep your hand off hot burners. Making that mistake once is enough. It's not profitable. It doesn't lead to a positive result. It hurts. Policy statements are written to keep the same mistakes from happening over and over again. Hiring a painter with no experience to do fine custom work is not a good policy. Making that mistake once is enough.

You can make up a policy statement to cover any subject, from the smallest detail to the most obvious task. When something goes wrong because someone didn't know what to do or did the wrong thing, make a note of what should have been done.

When there’s a dispute about some personnel matter, make a note of how the problem was resolved. When you have enough notes on a particular topic to fill a page, there’s the first draft of your policy statement.

Give a copy of each company policy to all employees concerned. Keep everyone aware that the policy is still in effect by distributing another copy every three or four months. Give every prospective employee a copy of policy statements before you offer a job. A new employee will follow his own policies or those of a previous employer if he doesn’t know your policies. Following company policies should be a condition for continued employment.

More to Come on Organization

That’s as far as I’m going now on the subject of organization. True, we haven’t covered everything needed to get your company organized. But we’ve hit most of the important high spots. There’s more that you need to know. But the remainder fits best in the chapters that follow.

For now, be satisfied to set some goals, compile and review key business indicators, have an Org Board, job descriptions, and policy statements, hold effective meetings, and make it company practice to finish each task before starting the next. If you do that, you’re already better organized than most painting companies.