The Four Functions of Management

Most people in the HVAC industry who start a contracting business come from the field. Most are highly skilled technicians with experience in servicing or installing HVAC equipment, but how much business training do they have? How much business training do you have? Many have had good mentors along the way and those that make it through the first five years have learned survival skills. How many people really spend the time or the money to get business specific training?

Michael E. Gerber author of the book The E-Myth Contractor, states, “Most entrepreneurs are merely technicians with an entrepreneurial seizure. Most entrepreneurs fail because you are working in your business rather than on your business.” I recently started rereading this book and it’s amazing to me how much more relevant it is today than it was when I read it ten years ago. Maybe because I have challenges with running my own consulting business that I can relate to it now.

I have to agree with Michael Gerber that most people in our industry who start a contracting business come from the field. Most are highly skilled technicians with experience in servicing or installing HVAC equipment, but how much business training do they have? How much business training do you have? Many have had good mentors along the way and those that make it through the first five years have learned survival skills. How many people really spend the time or the money to get business specific training?

In this series of articles, we will cover basic business concepts and principles. Some of them you will know, but it’s worth covering these topics as everyone can use a refresher from time to time.

There are four functions of management; planning, organizing, leading, and controlling. There are numerous plans that you can have for your business, but the most important is your business plan. Your business plan is essentially your roadmap (or GPS system for younger readers). It tells you where you started, where you are going, and what it’s going to look like once you get there.

Think of your business plan as a living document that you review four times each year or at least twice per year. It’s a fluid document that you can adjust as your company grows. It helps you stay true to your goals and you can use it to help you decide whether or not to invest in or become involved with a new area of business. If your business plan had you going in one direction but you find more work in another direction, the business plan can help you evaluate the new direction. If it’s profitable and you enjoy doing that type of work, you can always adjust your business plan. If not, steer back to your core business and move on from there. Without that business plan as a guide, you might not get where you want to go. As Yogi Berra said, “If you don't know where you are going, you'll end up someplace else.”

Organizing is the second function of management. Organization means having all of the materials that you need on hand and arranged so that your employees can do their jobs efficiently and effectively. Organizing can take much effort but in the end, it means smoother running for your company. In a business, you can organize many areas from the cash flow to truck inventory, and everything in between. Organization improves workflow and efficiency.

Leading and leadership is one of the most important things you can do as a business owner. Being a leader is completely different from being a manager. An effective leader can make you want to come to work early and strive do your best. Leaders inspire others to excellence. Leaders can tell you to go to hell, but they say it in a way that makes you look forward to the journey. Leading is definitely a part of managing and if you don’t have those skills now, you can develop them by reading the right books and studying other leaders to learn how they handled situations and inspired their charges.

Controlling is also an important part of managing, because after you’ve done the planning, organizing and leading, you have to put in place controls that let you verify everything is working according to plan. Controls can be as simple as having employees inventory their trucks one a week and turning in a daily inventory usage You can put controls on how much an employee can spend at a supply house without your authorization, if anything at all. It can include creating a customer feedback system where you call your customers three days after your employees perform a job to ensure the customer is happy with the service and that you don’t have any issues to fix. It can be as simple or as complex as you desire, but ultimately simple is better if it does what you want it to do.

So there you have it, the four functions of management, planning, organizing, leading, and controlling. Many business owners give little thought to these basic principles. If you are one of them, it might be time to sit down and lay out a plan, get organized, brush up on your leadership skills, and establish some controls.

My website contains links to all the marketing articles I’ve written for the HVAC-Talk Newsletter. If you are interested in purchasing a copy of my new book, Navigating the Marketing Maze, click here. If you need a branding consultation, a complete strategic marketing plan, or help with marketing services, call or send an email to discuss your needs.

Andy Fracica is president and CEO of Fracica Enterprises, Inc., a consulting firm specializing in marketing, and social media strategy. He has over 30 years of sales, marketing, and product management experience in the heating ventilating and air conditioning (HVAC) industry. He concentrates on helping companies deliver their message in an ever increasingly crowded market by helping HVAC dealers more effectively market their businesses without breaking their budgets. Contact him at 260-338-4554, [email protected] or visit the Fracica Enterprises, Inc. website.

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