Last month I talked in my column about starting a company and the risks associated with that. This month I’d like to talk a little about expansion. What happens if you already own a company and want to grow it? What options do you have?
There are several ways you can grow your company. The two that we see the most in this industry are either by adding services to attract new customers, or by way of acquisitions — like buying out a competitor in your area.
One way of doing it isn’t better than the other, it’s just a matter of how you want to go about growth.
EXPANDING SERVICES
Expansion of services is probably the easier of the two options. You’re using your current crew to offer additional services than you already offer. Maybe it’s something as simple as incorporating ground-penetrating radar services into your vacuum excavation company or adding a new vacuum truck to handle septic pumping or industrial pumping.
Hopefully, if you are growing by adding services, you already have someone on staff that is familiar with the work and they can offer their insight or help get those services rolling without too many hiccups.
Through this method of expansion, you could grow as slow or as fast as you want. If you feel like it’s a service that is going to take off, be ready to hire more staff to ensure it can be done without letting your current services suffer.
The other advantage of growing organically like this is the ability to add equipment as slow or as fast as you’d like. You could add just one new truck until that new service takes off and then add more tools that would help you do it easier. Being able to add equipment as needed also helps with your cash flow and ensuring the company isn’t being put in too much of risk if the new services don’t pan out.
ADDING THROUGH ACQUISITION
The other method of growth we often see is through acquisition of other companies. It happened this way for Shawn O’Keefe and his company, profiled in this issue.
O’Keefe and business partner Max De Angelis, after years of working in the construction field, teamed up to buy Heaton Sanitation and form Hurricane Hydrovac.
When buying out another company, some of the pros include eliminating a competitor and giving your company an immediate core group of experienced operators right away. Some disadvantages might include a much larger inventory of equipment to keep track of and a way to allow all sides of the company to communicate with one another — dispatch system, payroll paperwork, etc.
Having that experienced crew right away helps to alleviate the stress of trying to find those crew members you would need if you grow by adding the services. It means you can continue to the work they have been doing with little to no downtime.
WHAT WAYS HAVE YOU GROWN?
What ways have you grown your company? Is there a way you would prefer to grow it? Email me at editor@digdifferent.com and tell me your story.
Enjoy this issue!
