Allgrange Services

Building a sounder business    

Greg Palazzolo’s construction company is well placed to reach its full potential thanks to some timely assitance from the Small Business Mentoring Service.

After working in the insurance industry, Greg ran a garden maintenance service for 10 years. In 2001 he started Allgrange Services with his cousin Angelo, who was already in the industry. “Property and construction has always interested me, as I see the industry as having an unlimited potential in many areas,” Greg says.

Allgrange Services is a diversified building company providing a range of construction services to public and private sector clients. It renovates, builds new, extends, maintains and develops properties, specialising in Victorian State Government projects.

The business has eight direct employees and employs many specialist sub-contractors on a regular basis.

Customers include government housing bodies, the general public, insurance companies, architects and consultants. Most work is local but Allgrange has completed projects for some clients interstate.

“We have detailed systems that we have developed ourselves, which allow us to monitor costs and project progress to a fine degree,” Greg says.

“We are fully compliant with Government tendering requirements. We have some trades in-house which, gives us more control in ensuring projects progress smoothly.”

 Greg discovered SBMS while seeking ideas to take his business to the next level through the State Government’s Department of State Development, Business and Innovation.

“We wanted to get an independent view on our business and thought that if we could ask questions … and also have questions asked of us and our business, we would be able to get a different and fresh perspective,” he says.

Greg was matched with SBMS mentor Keven Diggens, who spent 20 years learning world class marketing, sales and financial skills in multinational companies in the UK and Asia, ending up as General Manager in Australia.

Keven then purchased his own, very small business in Melbourne and developed it into a profitable, internationally recognised leading supplier to the building industry.

SBMS is a non-government, non-profit organisation of volunteer expert mentors who give their time and experience to help small business.  It is supported by Small Business Victoria, which refers clients to it.

Greg has had nine sessions with Keven over five months and mentoring is continuing. They worked on how to set up a reporting system comprising profit and loss budgets, cash flow forecasts and actual versus budget monthly profit and loss.

Keven also helped with how to set up a system to review these and other key factors affecting the business through a procedure of monthly meetings.

Allgrange now has a well constructed, realistic budget for the coming year. “Greg, Angelo and their wives, who handle the accounts, are now in a position to run the business in a professional manner with a budget and monthly reporting system,” Keven says.

Greg and Keven have recently had a meeting explaining to all the staff the processes that have been going on and how this will improve the way the business works in the future.

“The staff were most enthusiastic and contributed positively,” Keven says. “A number of valuable issues arose, including defining individual roles and responsibilities and how best to improve the present accounting package which the staff felt was near its capacity limit.”

Their next major objective is establishing profitability by project. While it is early days to say to what extent overall profitability has improved, the means to review it are now in place.

He says the business now has a more comprehensive understanding of budgeting and related financial principles. Greg has also improved his ability to work on and not just in the business.

As well, the business is now well placed to involve staff in improving the business’s performance by ensuring their individual aims coincide with those of the company. “In the near future we will work on debtor, estimating and on-site performance measures,” Keven says

Greg says he now has a clearer understanding of budgets and results, which allows better interpretation of where the business is at and what will be required as it moves forward.

“We have had to work hard to establish some principles in order to get a level of transparency our business requires,” he says. “Having the knowledge of our business position available, through systems developed, avoids potential surprises and therefore reduces any potential stress.

Greg says the business’s strength has been achieved over the years by establishing relationships with core clients, which helps to ensure repeat business and tender opportunities.

“The work done with our mentor will allow us to further analyse which business sector and individual customers can be further focused on to allow business to increase, without the need to find entirely new clients,” he says. “We can also identify if new markets should be explored.”

Compared to the previous year, Greg says the current year looks set to be “one of our strongest on record”. Profits should also improve as a result. “We are developing and focusing on increasing the business, but mainly through our existing customer base,” he says.

“The expectation of significant growth will require the employment of more people. The more time I spend in managing the business, rather than doing specific tasks within the business, will encourage delegation to the existing team which we expect to be adding to in the near future.”

Greg is extremely grateful for Keven’s expert help, which has put the business on a much sounder footing.

“Prior to engaging our mentor, we felt our business had stalled and was not at the level we aspired to be,” he says. “Having the information available, as set up with our mentor, we are now in a position to analyse the business easily, allowing us to make informed decisions as we grow, and also avoid any potential pitfalls.

“A better understanding of the business means a more satisfying role in the business.”

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