Running a business means dealing with change. To remain the best one can’t rest. The marketplace is full of companies ready to take yours down. Yes, they may be friendly competitors, but their success might come at the price of yours.
How to remain on top or get closer to the top? Embrace change.
Easily said. Hard to do.
In the remodeling business, many significant changes take some time to provide improved performance to a company. Consequently, there is no immediate gratification, making sticking with the change hard to do.
For instance, the company decides to sell at a higher gross profit percentage.
Let’s assume the following:
- The company has a backlog of 4 months, which gave it the courage to increase its gross profit percentage.
- The company is design build. The design phase takes two months for a typical project.
- The permitting process in the communities where the company does business requires a one-month notification process to those who live within a 300-foot radius of a project.
- The average length of a typical project is three months.
Add it up. Four months plus two months plus one month plus three months equals ten months before the company will complete its first project sold at the higher gross profit percentage.
A while ago I worked with a company that made extensive changes following my visit. It took nine months for them to realize fully the results of the changes they made.
Now they are producing projects with no slippage and at a higher GP% than they ever thought possible.
It takes courage, and it takes patience.
The alternative? A slow slide into oblivion.
Figure out the big “opportunities” your company has. Make a list. Pick the one that will provide the most benefit in the LONG RUN. Then implement it.
Get ready to be running a better company than you ever imagined. And be patient in the meantime.