Three years ago, Gary Potter devised a system of using only free-lance field staff, allowing him to eliminate payroll and to pay wages only when jobs were underway. But today, Potter has changed his approach. Now he has hired a full-time lead carpenter and uses a combination of on-staff and free-lancer lead carpenters to supply the best of both worlds.
"Subbing the lead-carpenter position works well in two situations," says Potter, the president of Seattle-based Potter Construction Co. "It succeeds if you donÆt have enough work to keep someone busy and you have to pay salaries with no work coming in, and when you have a free-lance guy available whoÆs the right guy to handle the position."
The second half isnÆt as big an obstacle as many think, he stresses, if you network and know the type of candidate to seek. Rather, the key hurdle comes in knowing when to use free-lancers and when to hire full-time personnel. This concept remains true for every company as it grows and tries to survive in what Potter terms the "No ManÆs Land" of growing to the next level of business.
"If thereÆs a concern about keeping a lead busy, free-lancing is an alternative, and it can help keep you profitable while youÆre growing to the next level of business," he says. "But if you can keep a lead busy full-time, using free-lancers costs you a lot in terms of the dropoff in teamwork and extra customer service."
Potter realized this distinction during his all-free-lance period when he found gaps in service provided by each individual carpentry sub. "We received some complaints that there were times when nobody was at the job and that the guy coming in wasnÆt aware of what work already had been done. They didnÆt have the big picture in mind."
Best of both worlds
As his first full-time lead carpenter, Potter hired Al Burnside, one of the free-lancers with whom heÆd been working. "I want the lead carpenter/project manager on the job every day with his tools," he says. "ThatÆs the best thing I can do for customer service." But that doesnÆt mean Potter jettisoned the free-lancer idea altogether. He still works with one regularly: John Rudzitis, owner of Ritz Construction in Shoreline, Wash.
"IÆd rather build my business with staff people, but you need flexibility to handle that No ManÆs Land that usually first occurs between $1 million and $2 million," he says. "You end up adding overhead to make that jump, but you donÆt have the business to generate the revenues to pay for it." Free-lancers can fill that gap while not requiring its use for all employees.
"ItÆs fine to say youÆre going to grow your company, but to do it is difficult," he says. "As a company grows, the daily problems become more diverse and harder to handle. The routines you followed at a certain volume will change as you grow larger, and you have to change, too. Not being able to handle the changes can cause stress that distracts from running the business and hurts the companyÆs success even more."
PotterÆs ability to find strong free-lance lead carpenters results from networking and actively looking for people appropriate for the role, he says. He typically works with carpenters who have owned their own businesses but closed their offices because they didnÆt enjoy the administration or marketing aspects. "The best leads have run their own companies and understand what that takes, but they donÆt want to do it themselves."
Potter pays the free-lance lead a straight project fee, ensuring the work is done efficiently. He doesnÆt worry that it might entice them to cut corners, because they have pride in their own work and want to satisfy customers, too, whether thatÆs the homeowner or Potter.
A key concern is schedule availability - the most successful free-lancers also have the fullest schedules. Potter works up to six months in advance, and scheduling hasnÆt been a problem. "The lead wants to work me into his schedule, because it fills up a block of his time in which he doesnÆt have to worry about marketing himself or bidding jobs. But if you depend on one guy and heÆs booked on a big six-month job, youÆre left with nothing. You canÆt put all your eggs in one basket." He admits that the industryÆs growing labor shortage also made him realize that demand could outstrip supply if he relied solely on free-lance availability.
The combination of on-staff and free-lance personnel has worked well for Potter, with his revenues rising from $600,000 in 1997 to $1 million in 1999 and slightly more last year. For 2001, he has a good-better-best scenario that could take him above the $2-million threshold, if all his plans - and his free-lance lead carpenters - fall into place.
Potter Construction thought free-lance lead carpenters offered the best model for growth, but it soon found that it needed to include on-staff personnel.