Peer Groups and Owner Roundtables

Why this matters

An owner of a twelve-person shop has nobody inside the business to compare notes with. The techs work for them, the office manager works for them, and the spouse has heard enough about it. A structured peer group puts that owner in a room, a few times a year, with eight or ten people running the same kind of business somewhere else, who will look at the numbers and say "your vehicle costs are double mine, why?" That question, asked by someone with no reason to flatter you, is worth more than most consultants. Groups that work tend to share four mechanics: confidentiality, rotating presentations, accountability and careful membership. Groups that fail usually dropped one of them.

Two kinds of group go by these names. A peer group in the trades usually means owners in the same trade from different cities, meeting in person a few times a year, often with a paid facilitator or under a trade association or franchise network. A local owner roundtable usually means owners of different trades in the same town. The mechanics overlap; the membership rules differ. Starting a local one is covered in see related: How to Start a Local Owner Roundtable.

Confidentiality: what members actually agree to

Peer groups ask members to share things they would not share anywhere else: full financial statements, pay plans, an owner's plan to sell, a partner dispute. That only happens when members trust that it stays in the room.

• Put it in writing. Most structured groups have members sign a confidentiality agreement covering what is shared in meetings and in shared documents. Whether a particular agreement would be enforceable is a state-law question; in practice, its main value is setting a norm everyone has signed, and the real enforcement is that a member who leaks is removed.
• Name what it covers. Financial figures, named employees, named customers, and anything a member labels as private. Methods and general lessons are usually free to take home; that is the point of the group.
• Decide what happens to documents. Shared binders or folders are a leak waiting to happen. Many groups hand out financial comparisons in the meeting and collect them, or share files that are removed after the meeting.

Rotating presentations: the hot seat

The core of a good meeting is one member presenting their business in depth while the others question it. Groups call this the hot seat or the deep dive. The presenter brings financials in a standard format, a problem they are stuck on, and their plan; the group spends 60 to 90 minutes on it.

Two things make it work. A standard financial format so the group compares like with like: revenue by line of business, labor and materials as a percent of revenue, overhead lines as percents, owner pay stated separately so a shop that pays its owner a market wage is not made to look less profitable than one that takes it all as profit. And a rotation everyone can see, so nobody presents twice before someone else presents once.

The failure is a hot seat that turns into a show. A presenter who brings only good news, or a group that only offers praise, has spent 90 minutes on nothing. Facilitators often require the presenter to name their single biggest problem before showing any numbers.

Accountability: commitments that come back

At the end of each meeting, every member states one or two things they will do before the next meeting, in a sentence specific enough that the group can tell whether it happened: "Raise my maintenance agreement price and send the notice to all agreement customers by June 1", not "work on pricing". The next meeting opens with each member reporting done or not done, and why.

This is the mechanic that separates a peer group from a social club. It is also the one most likely to erode, because reporting "not done" in front of peers is uncomfortable and groups start letting it slide. A group that stops tracking commitments has stopped being a peer group.

Membership: choose people who do not compete with you

The membership rule is the antitrust rule in practical form. Owners who compete for the same customers, the same techs or under the same supplier terms should not be sharing current prices, pay plans or hiring plans, and a peer group's whole value comes from sharing exactly those things. So members should come from markets that do not overlap; Mentoring a Newer Owner Outside Your Market for the three-market check, and see related: Antitrust Lines for Associations and Owner Groups for the line itself.

Three more selection points:

• A size band. Members within roughly three times each other's revenue or headcount can learn from each other; a three-person shop and an eighty-person shop face different problems.
• The same or adjacent trade. An HVAC shop learns from a plumbing shop; it learns less from a commercial landscaper.
• Commitment. Attendance at every meeting and a willingness to present. One member who skips half the meetings costs the others the trust the group runs on.

What a peer group must never do as a group

Sharing information among non-competitors is one thing. Acting together is another, and the antitrust exposure for a group comes mostly from collective action, not from comparing statements:

• Collective refusals. Ten shops agreeing together to stop accepting a home warranty company's terms, or to drop a manufacturer, is a group boycott even if the shops are in ten different cities, because they may all compete in the market for that company's business.
• Joint purchasing without structure. Buying together can be lawful and is judged under the rule of reason, but a group that wants to negotiate jointly with a supplier should do it through a properly formed buying arrangement reviewed by counsel, not by a show of hands at the meeting.
• Coordinated responses to a manufacturer or distributor program. Each owner decides alone.

Facilitated or self-run

A facilitated group pays someone, often a former owner or an association staffer, to recruit members, keep the rotation, collect the financials in the standard format, run the meeting clock and chase commitments. Members pay a membership fee and travel. What they get is a neutral person who will stop a member from monopolizing the day and who will say out loud that a discussion is drifting toward prices.

A self-run group rotates those jobs among members. It costs only travel and time, and it works when one or two members are willing to do the administrative work for years. It usually fails in year two or three, when the organizer burns out and nobody picks up the rotation. If you start one, assign the facilitator role on a fixed term, such as one year, with the next person named before the term ends.

Either way, somebody has to own the agenda and the clock. A peer group meeting without a timekeeper becomes a long lunch.

Worked example

A group of nine HVAC owners from nine different metro areas, each with 8 to 22 employees, meets quarterly for a day and a half with a facilitator paid by the members.

Size band check. The smallest shop has 8 employees, the largest 22, a ratio of 2.75, inside the three-times band.

Rotation. Each meeting has two hot seats. Nine members at two per meeting is four and a half meetings per full rotation, so with four meetings a year each member presents about every 13 to 14 months, and the facilitator publishes the order a year ahead.

One hot seat. A member with 14 employees presents. In the standard format, his labor runs 31 percent of revenue against a group range of 27 to 34 percent, so labor is not the problem. His vehicle costs run 9 percent of revenue against a group range of 4 to 6 percent. Questioning finds he buys new trucks every four years and pays for an outside service shop on all repairs. His commitment: price a three-year replacement plan with in-house basic maintenance against his current approach, and bring it to the next meeting.

Accountability over a year. Across four meetings, the nine members make 2 commitments each per meeting, 72 in total. The facilitator's log shows 51 done, 14 partly done, 7 not done. The 7 not done cluster in two members, who are asked privately whether the group still fits their year.

The membership test, in year two. One member announces he is buying a shop in a city where another member already operates. The two will now compete for customers and techs. The group's written rule handles it: overlapping members cannot both stay. The buyer leaves at the end of the year, and until then, both members step out of any session where pricing or pay detail for that city is discussed.

What changes the answer. If the group were a local roundtable of different trades in one town, the membership logic would run differently: the plumbing owner and the roofing owner do not compete for customers, but they almost certainly compete for office staff and some field labor, so the group should not share pay specifics at all, while pricing methods remain fair ground. The local version needs tighter content rules, not looser ones.

How to judge a group before you join

• Ask for the confidentiality agreement and the written rules, including what happens when members come to compete.
• Ask how hot seats are scheduled and what format financials use.
• Ask how commitments are tracked and how many members have left in the last two years, and why.
• Ask whether counsel has reviewed the group's practices and whether anything is ever done collectively.

References

• See related: Antitrust Lines for Associations and Owner Groups
• See related: How to Start a Local Owner Roundtable
• See related: Mentoring a Newer Owner Outside Your Market
• See related: The Roundtable That Drifted Into Pricing