I think a lot about business-related issues, and do my share of writing about them in this space and on my blog at www.nationaldriller.com. Recently, I wrote a post there discussing the limits that small and mid-sized contracting firms face as they attempt to grow. In particular, I wrote about the challenges of finding financing, and of finding and keeping good employees. I wanted to add to that discussion here with a few more topics.
Putting Systems in Place
If you want to grow, having systems in place to manage that growth is critical.
If you run a small family firm operating a single drilling rig, it’s probably pretty easy to keep track of that rig’s work hours and your client commitments in a small notebook in your pocket. Heck, maybe you can even keep track of that in your head.
There are a couple of things wrong with this approach if you want your business to make it to the next level. First, there’s the hit-by-a-bus principle. If you get hit by a bus, what happens to your business? Second, having systems in place allows you to get non-essential facts, figures and appointments out of your head. Use your head for making decisions, not for storing data. I don’t know about you, but my head is terrible at storing important details like where I’m supposed to be and when. I keep everything I need to make the day’s decisions at my fingertips, for example in a smartphone, so I can focus on work but still reference important details when I need to make decisions.
Billing and accounting data should go into software designed for that purpose — maybe starting with an Excel spreadsheet or something like QuickBooks. Notes about client meetings and general to-do scribbles need to go into a central place where you can quickly search and find what you’re looking for. Bonus points if the software you use backs up to the cloud, giving you access to it on your smartphone on the jobsite. It’s a good idea to make it a habit to review important financial information, jobsite details and a checklist of the day’s tasks at a set time each day — perhaps right before or after that tailgate safety meeting.
Who’s on Your Team?
Of course you need your rig crew to be solid, well trained and dependable — from your mud guy to your apprentice driller, and everyone in between. However, successful businesses have a support team that allows them to focus all their efforts on their business, without having to sweat details like contracts and tax filing.
Lawyers, like journalists, get a bad rap. But you should have a lawyer on your team to make sure contracts you sign do not put you at a disadvantage if something goes wrong. You don’t want to be in a position where a job doesn’t turn out as everyone expected and your name is on a contract that leaves you mostly responsible. I’m not saying that your contracts need to shift all blame onto every other contractor, sub or client associated with a job, but proper legal wording can go a long way toward minimizing your exposure to risk if you end up in court.
Of course, not all companies can afford to have a lawyer on retainer. At the very least, you need to have the phone number of a lawyer who knows the business you do and the risks you face as a businessman, even if it cost you $200 an hour when you need to call him. It may sound like a lot of money, but if it keeps you from losing a lawsuit, every cent is worth it.
A good accountant, whether in house or on contract, is also vital to business growth. I know I don’t like doing taxes. I’m much better off with a CPA telling me what things I need to track over the course of the year. Each spring (or quarter, if that’s how you do your taxes), you just hand your receipts and your monthly books to your accountant. She sorts it out, making sure that your business is compliant with all state and federal reporting requirements, while maximizing your deductions.
What Do You Think?
There are other challenges, of course, but that is all I have space for here. Read my thoughts about finding financing and getting the best workers on my blog and www.nationaldriller.com/blogs. Click on “What limits your drilling business?”
Thoughts? Are there business challenges I’m overlooking? Share your challenges — and successes. Email email@example.com. Stay safe out there, drillers.