A short talk by Mike Andes about how many home-services businesses appear viable only because owners work excessively long hours; true profitability requires creating standardized systems that favor simplicity over custom work. Large home builders (e.g., Lennar, D.R. Horton) scale by standardizing processes and using systems to run the business.
There are many unprofitable businesses, especially in home services. Their unprofitability is masked by the fact that the owner is working 12, 14 hour days and they don't look that bad. Mostly because someone is working crazy amounts of hours to make sure all the balls of the business get juggled. So the question is, how do I actually fix this? Well, you create systems. Well, how do I create systems? You want to be able to focus on things that are simple and standardized instead of complex and custom. And it's. What's so funny to me is that in home services we've glorified custom. There are very few custom home builders that have scaled across the country. Why? Because it's very difficult to grow and scale. It doesn't mean though that you can't build big projects and have big jobs. For example, there are home builders like Lennar and Dr. Horton have built billion dollar enterprises and have thousands of houses being built. What do they do? They standardized everything by doing this. They create systems and those systems run the business.
