Building a Labor Addition

When Bob Fry found himself short on subcontractors to get through a busy work period, he added more labor in an unusual way -- he purchased it.

September 28, 2000

Almost two years ago, Bob Fry, owner and president of Fry Contracting Co. in Columbus, Ohio, fired all his field employees. The move was calculated to improve profits as Fry worked entirely through subcontractors. Fry's office staff increased with the addition of Cheryl Ware and Joyce Bartlett, and for the first few months, profits swelled.

Last February, Fry began to feel a serious pinch with the labor shortage. Subcontractors became harder to schedule, and small tasks began to pile up. At the same time, a small local electrical company expressed willingness to be purchased by Fry.

"It was one of those things that came to me while I was sitting in a moment of meditation," says Fry. "One of the things you lack when you don't have employees in the field is a way to handle the little things that come up. There are so many times when you go into a house and tear the walls out and you immediately have to have the electricity killed, so we brought an electrician in-house."

To keep himself from falling back into the old routine, Fry kept the electrical division of his business separate from the remodeling division. The costs and profits of the electrical division are tracked separately. Currently, Steve Salmen, a licensed electrician with 20 years of field experience, and his assistant make up Fry's electrical staff.

The electricians, as in-house staff, work on much more than wiring. "They are another good set of eyes and ears on the job site," says Fry. "They take care of a lot of small things that come up on the job while they're there. If there's something quick that needs to be done, Steve will just grab a saw, do it and be on with the job."

Fry has not had a chance to measure the profits from his new electrical division, but he expects it to become a stable source of additional income for his company. "We just went out and purchased a new truck" he says. "There will be some expense in getting the new division started, but I believe it will be profitable. Right now, they're also making service runs and subcontracting work for other local companies. Eventually they'll become another profit center in a difficult business."

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