Last Updated Oct 13, 2010 6:31 PM EDT
After a year in business, my green job training company decided to increase the number of locations where we offered our classes, with many of them far from our headquarters in New York City. While the expansion was a good idea -- more than 80% of our business now comes from out of town -- we saw a 20% decrease in our typical profit margins.
The more remote classes cost us more, in part because we flew our teachers across the country to teach classes for people looking to enter the green building workforce or expand on their current abilities with LEED certification or energy audit training. Then a client in Oakland, Calif., told me she couldn't believe I had flown in all the way from New York. I don't know why it hadn't occurred to me before, but I suddenly realized it would be a much better idea to hire local teachers.
This change improved our business' finances -- and forced me to improve my approach to management.
Hiring across the country
The idea to hire regionally made complete financial sense: An employee could fly out of Los Angeles in the morning to set up and teach a seminar in San Francisco on the same day and still have time to get home that night. But it was also scary for a control freak like me.
I am overwhelmed by the idea of hiring people who live in my city, let alone people who live more than 2,000 miles away. To overcome my anxiety, I made heavy use of the contacts I had developed through the classes we teach.
Our students are design professionals who range from interns to CEOs. I make a habit of connecting with each one via LinkedIn because I know these individuals are either potential employees or may know someone else who'd be a good fit. For instance, whenever I want to hire someone new, I just post on my status, "Looking for new instructors: Do you know any great architects?"
There is nothing more valuable than a trusted connection giving someone a thumbs up. If a connection who runs a multimillion-dollar architecture firm tells me that someone is good based on working together for 10 years, you damn well know that this person is good.
Formalizing the rules
We started by hiring a teacher in Los Angeles, which is in close proximity to several major markets for us. Since then, we have hired five more teachers in five different cities, including Denver and Miami.
After talking to my lawyer, I decided to take on the new satellite hires as part-time employees instead of contract workers. Sure, hiring contract workers has a certain appeal because you can simply cut them a check and you don't have to deal with taxes. But with employees, you have more control. I could get them to sign an employee handbook and a non-compete contract.
Of course, before we hired distance employees, we didn't even have a handbook. When all of the employees were local, I just created policies on a question-by-question basis. But with remote employees, I decided I needed one to make sure my expectations were clear.
So I created a 40-page document that lays out everything from our maternity leave policy to our non-discrimination policy. If one of my instructors is unsure if he or she should be taking cabs or the bus in any given city, the handbook explains company protocol. And if something comes up that is not in the handbook -- for example, the other day an employee wanted to know if her mileage would be covered for coming in for a Saturday work function -- I just write it in the handbook, which I modify weekly. Employees have hard copies of the handbook, and I send them updated copies periodically.
The handbook takes the guesswork out of our business. From a management standpoint, it gives us the ability to create a seamless relationship across the company via a centralized working document.
Local connections pay off
An unexpected benefit of hiring closer to the market we're serving is the ability to maximize our teachers' connections. Someone considering taking a particular class in Los Angeles may already know our instructor, an architect who has worked in the area for 15 years. When we offered a new class, she got the word out to her connections by posting updates on her LinkedIn page.
We now have five full-time and seven part-time employees, and I plan to hire two more employees in the next month. In 2009, our revenues were just short of $1 million; this year, we anticipate hitting $2 million. I'm planning to expand to more cities, but I won't rely on this strategy alone for growth -- I am constantly analyzing the market to find our next move. I feel comfortable with our expansion now because I've created tools and a management structure that make it work.
-- As told to Caitlin Elsaesser
Zach Rose started Green Education Services after being laid off in 2009. He had worked as an architect for five years.