Make Time for Strategic Planning

Wouldn’t it be great to have the time to really step back, think about your business and make sure that you’re clear on your goals, using the right strategies, and making sure that your team is well-informed and motivated? But we all know that a successful business has too much going on to have time for strategic planning. Right?

Finding the Right Route Takes Time

Imagine you’re starting a three-day road trip in the height of summer vacation time, but get out the door just a bit late. You know you should put the information into your GPS or map app to find the right route and to determine how long it will take you to get there. But you’re already running a bit behind. You know roughly that you want to get on the interstate and head north. So you jump in the car and get rolling, knowing at some opportune time you’ll stop and accurately enter your destination information. 

Unfortunately, you get out on the interstate only to find bumper-to-bumper traffic crawling along. The next exit is 11 miles up the road, and just when you wrap your mind around all of this, your low fuel light comes on. The traffic creeps along, your stress level goes up and when you finally enter the information into the GPS, it’s clear there was a better route that would have taken less time, and would have taken you past several gas stations.

Don’t Play Catch-Up

In the world of business, we often feel like we don’t have time for strategic planning. There’s simply too much to be done to really take the time to figure the best way of getting it done.

We don’t have time for strategy, but somehow we make the time to deal with the problems that poor strategy creates. We don’t have the time for proper training and onboarding, but we have the time to deal with the performance issues that result. We don’t have the time or information to be sure that we are on the right path, but we have time to double back, turn around, and find another route. 

Start Small

Start by taking small steps. Free up 30 minutes per week to think strategically about the business. As you do, make one of your top priorities finding a few ways to free up just a bit more time for strategic planning.

When you get to 3-4 hours per week, you will find that you free up even more time by doing things right the first time and not having as many frustrated customers and employees. What a concept — you’re on your way!

Build Aid Coming April 1-2, 2020

After more than 30 years of working with some of the finest Remodelers and Renovators in the business, we are facing new challenges in our industry.

We want to give back to an industry that has supported us through good times and bad, and so we’ve created Build Aid, a free event to help support our members, associates, and friends in the remodeling community.

Join us on April 1-2 as we explore various ways your business can navigate these tough times, and position yourselves as a leader when the world begins to recover and re-build. Click here for more information & registration

Coronavirus Planning and Your Remodeling Business

As novel coronavirus Covid-19 cases continue to multiply throughout North America, it’s time to plan for how it may affect your business, your employees, and your clients. The situation is changing quickly, so stay informed through reputable news and public health sources.

Covid-19 causes a variety of symptoms, including cough, shortness of breath, and fever. More severe cases can lead to viral pneumonia. There is no vaccine and no antiviral medications have been developed for it. Luckily, the majority of those infected will not have life-threatening complications. But the virus is highly contagious and spreads quickly and easily.

From the Top

The Centers for Disease Control has issued interim guidance for businesses and employers. The CDC recommends actively encouraging sick employees to stay home. This may mean implementing flexible sick-leave policies, and plans for potential absenteeism, including:

  • Creating flexible sick-leave policies that do not penalize employees for staying home when sick
  • Not requiring a healthcare provider’s note for sick employees — doctor’s offices, clinics, and hospitals may be too busy for that
  • Allow your employees to stay home to care for sick family members
  • Give your office staff the flexibility to work from home
  • If an employee becomes ill at work, they should be separated and sent home

According to the CDC, it is possible for a person to be infected by touching a surface with the virus on it, and then touching their eyes, nose, or mouth. Within your office and facilities, emphasize hand-washing and good hygiene, as well as increased attention to cleaning frequently touched surfaces including doorknobs, phones, keyboards, countertops, workstations, and the restrooms. Provide disposable wipes and hand sanitizer, if available.

At the Job Site

Equip your field crew with cleaning supplies, disposable wipes, and hand sanitizer for use in vehicles and on-site. Review good hygiene practices for your field team and have your lead carpenter or project manager enforce them for your team and all subs on site. And it’s an ugly job, but designate someone to be responsible for ensuring the surfaces on portable toilets are clean at the job site — contact with fecal matter from an infected person may transmit the virus. So provide disinfecting hand wipes.

Give your project manager or lead carpenter discretion to send sick workers and subs home. Because remodeling takes place in people’s homes, you should require your clients to let you know of any illnesses in the family. Work will have to stop if anyone in the household has to be quarantined in the home.

For the complete CDC instructions, access the document here: CDC.gov

Review Your Insurance Policies

Take some time to review your insurance policies — your own health insurance, that of your employees, and your business policy. In the case of Covid-19, talk to your agent about your business interruption insurance. Because you work in people’s homes, it’s not only your employees missing work that could cause delays. 

Check Your Cash Flow

Any disruption in your job schedules mean fewer payments coming in. We advise having enough liquid assets available equal to between four to six month’s worth of overhead — something to get you through in case of a dry spell or an emergency.  If you don’t have enough cash on hand to get the company through a lean period, it’s time to get your financial house in order. You may want to reinforce that safety net with a line of credit — read Victoria’s article on choosing between a line and a loan to use if necessary.

Have a Business Continuity Plan

Once the threat of illness has passed, you need to be able to operate your business and move forward quickly. The Insurance Institute for Business & Home Safety has great information for businesses you can use to create an extensive plan. Here is a PDF that will help you prepare and tailor a plan that works for you.

Don’t Panic, But Stay Aware

Panic is contagious — maybe more so than the virus. Open communication about changes in your sick leave policies, and understanding from everyone involved, will help inform and empower your team. 

How Do You Measure Up: Benchmarking Net Profit

Information is power, and powerful, when you’re trying to run and grow your remodeling business. So you carefully track your numbers and your data. You can measure your year-to-year progress that way.

But how do you stack up against other remodeling companies? To truly gauge where you are now, where you want to be, and how to get there, it’s vital to have benchmarks from the rest of the industry.

If you want to be great, you’ll set those benchmarks — and goals — based on what the best in the business do.

One of the benefits of being a Remodelers Advantage Roundtables Peer Group member is the twice-yearly benchmarking of company performance — and all the data that comes in from R/A members makes for a valuable resource for charting progress and growth. Our members go through the numbers, see who’s doing what and share how they got there. Working in their peer groups, and looking at benchmarks set by the whole membership, remodelers are able to share their successes, see the places where they need improvement, and offer help, ideas, and support.

Out of all the data we can look at, one of the key indicators of the health of your business is your net profit.

Net profit is the amount of money left over after paying for all your job costs and overhead. Overhead should include your salary, plus the other costs of doing business, like:

  • Rent
  • Marketing
  • Payroll for office and administrative staff

What’s Good?

You need regular net profits to give yourself more choices in how you grow, how much money you can save, or how much you pay to hire the best people. In the remodeling industry, eight to 10 percent of net profits in the usual goal. The top 25 percent of all our Roundtables members hit that 10 percent benchmark consistently, well above the industry average.

While it’s a relatively simple calculation, net profit depends on so much more — your gross profit on every job, which means pricing, estimating, and scheduling every job with great accuracy while keeping overhead low.

What’s in Your Wallet?

Another benchmark of your business’s success are your cash on hand, or your liquid assets — and these are tied directly to your net profit. You should aim to have enough liquid assets available that are equal to between four to six month’s worth of overhead — something to get you through in case of a dry spell or an emergency.

Many of R/A’s top performers aim for and maintain liquid assets to get them through at least six months, and some are able to reinforce their safety net with a line of credit they can use if necessary.

Having that safety net can help you get your business through the bad times — a weather event, a bad hire, a project that goes sideways for another reason. But if you can consistently hit a 10 percent profit, and keep enough cash on hand to get you through those tough times, you’re well on your way to having a top-performing company that will grow and succeed.

 

More Benchmarks & Best Practices in Our Webinar

Net profit is just the start. Find out how you stack up in job costing, owners compensation, and work/life balance, and learn best practices in sales, marketing, team management, and more in the free webinar “How Do You Compare?” that Victoria will present on Thursday, May 16, at 11 a.m. ET. We’d love to “see” you there, so click here to register!

Successful Team Building Starts at the Top

Almost every organization, at one time or another, talks about their workforce as a team. It sounds friendlier, and puts less emphasis on differences in roles and jobs. But not every company works as a team, getting better results, and lessening friction.

It’s more than a feel-good term, and if your remodeling company isn’t running as smoothly as it should, refreshing yourself on the principles of teamwork can make a big difference. As you continue to face labor shortages in the industry, creating a cohesive team can allow you to do more with less, avoid burnout for you and your employees, and make positive changes in your company culture.

From the Top

Any team needs leadership — without it, you’ve got a loose group of personalities who may or may not find a way to work together well. As a team leader and builder, your first steps are to establish relationships based on trust and loyalty. If you trust your team, as individuals and as a whole, they’ll trust you.

Herding Cats

As we’ve all heard, there is no “I” in team — there are a lot of them. You have to manage all those individuals to bring them together. As a manager or owner, you’ve got to get in the weeds and mediate and resolve conflict between individuals, keeping them pointed toward larger collective goals.

The University of California Berkeley recommends delegating problem-solving tasks to your employees to encourage collaboration and helping them feel part of a whole. At first, it may take a little more time to get a decision than if it was made unilaterally, which is why many avoid it.  Over time, however, the process will become second-nature — and take some of the little stuff off your hands so you can concentrate on longer term goals and how to get there.

Taking Measure

You’re probably already doing individual performance reviews, but one of the best ways to establish and encourage teamwork is by establishing team values, setting team goals, and evaluating your team’s performance as a group. Look at:

  • Why it’s important to do their jobs well
  • Define what success as a team looks like
  • What it means to live your team’s values

Encourage Listening & Debate

To get your employees to come together, you have to remember that they may all be a little scared to speak up, for fear of offending you, the boss, or making waves with their co-workers. Others may tend to come in like a bulldozer. By encouraging them to brainstorm together and work through conflict to reach the best decisions, you inspire their creativity.

As a leader, your first priority in getting to a team decision is to stimulate the debate. Remember that employees are often afraid to disagree with one another and that this fear can lead your team to make mediocre decisions. When you encourage debate you inspire creativity and that’s how you’ll spur your team on to better results.

If you need to brush up on your leadership skills to build and run your team, many of our Roundtables members, facilitators, and podcast guests recommend The Five Dysfunctions of a Team, by Patrick Lencioni.

The Good and Bad of BYOD, and Why You Need a Policy

BYOD, or Bring Your Own Device, is common in small- to medium-sized organization like remodeling companies. Your employees use their own phones, tablets, and sometimes laptops in their business operations.

A CBS MoneyWatch survey says more than 67% of workers use one or more of their own devices at work, and that doesn’t seem to be going away soon.

The Pros

There are advantages — the company doesn’t have to provide these devices, saving you money. Your team can respond to situations as they crop up during the day, especially when on a job-site or in transit.

They’re probably using tools they’re familiar with. It can be tough to pry an iPhone out of a dedicated user’s hand and have them happy to use an Android, for example. Trying to get a designer who’s worked on a Mac forever comfortable on a PC may take time you don’t have.

There’s no learning curve with familiar operating systems, and people are happy to use the devices they already chose. If their tech is current and able to do what needs to be done, it’s sometimes best to just let them use what they know.  

The Cons

Security of files and information is harder to ensure with BYOD. Using administrator-controlled cloud-based data storage systems like the Google suite, Dropbox, CoConstruct, and BuilderTrend, for example, add a layer of security. If an employee leaves the company, simply deleting or deactivating the account keeps your business information from walking into a competitor’s business.

Be careful with those accounts, though. With general apps like Google and Dropbox, opt for the professional or business programs, that allow the administrator to add or limit permissions for editing or deleting documents or data. With no limits on permissions, a careless or disgruntled former employee could wipe out years of business information.

Have a Policy in Place

You should have a mobile device policy in your employee manual — whether you supply the devices or your workers are using their own. It should address personal business on company time, passwords for security, and inappropriate use. That could involve posting something client-related on Facebook, say, or offensive posts on social media.

In this hyper-connected world, your employees are always a reflection on you. Take some time to ensure it’s a good one.

5 Key Takeaways From the Harvard JCHS 2019 Report

The Joint Center for Housing Studies at Harvard University just released the Improving America’s Housing 2019 report, and there’s great news in it for remodeling companies.

Here’s a look at the key points that will affect your business this year.

1. New Construction Down, Remodeling Up

New home building continues to be slow, and 40% of the housing stock in the US is at least 50 years old. More than 55% of residential investment takes place in remodeling.

Not surprisingly, in metropolitan areas with tight real estate markets — including Boston, San Francisco, and Seattle — homeowners are spending more on home improvements than those in slower sales areas.

While this is great news, it may also cause more new home builders to branch into remodeling as a revenue stream, meaning more competition.

2. The Customer Base

Older customers continue to drive most remodeling projects. Half of all home improvement spending was done by homeowners aged 55 and above.

However, spending by homeowners 35 years old and younger rose about 16%, and spending among this age group grew even faster, up 20%.

3. Rentals Flipping

Rental or vacant units are converting to owner-occupied spaces at a higher rate across the nation, and home improvement spending for these homes accounted for nine percent of the total.

Not surprisingly, the highest spending on converted units was in metros where the real estate market has a low supply of available housing.

4. Replacement Projects

As the housing stock ages, nearly half of the market’s improvement spending is on replacement projects — exterior and interior replacements, systems and equipment upgrades — up from 40%  percent of total expenditures before the housing crash.

5. Financing Choices

Cash is still king —  77% of home improvement projects were paid out of savings. However, as project scope increases, owners are more likely to use their home equity or other forms of financing to cover the costs.

 

To dive deeper into the numbers and trends, you can download the full report from the JCHS website.

4 Key Pieces to a Better Remodeling Project Handoff

Many remodeling companies do a handoff process shortly before a project starts. If you don’t, here are the basics. Sales, Design and Production meet to go over the job. The purpose is to get the Production staff acquainted with the job and free up Sales and Design to focus on more sales.

The meeting can be as long as several hours or as short as half an hour, it depends on the content and the details a company wants to discuss. There are common elements that go into handoff meetings:

  • Plans and the scope
  • Trades that will be included and their contracts for the job
  • Items that are selected and — most importantly— ones that are not

Too often, known problem areas get no attention. But this is probably the most critical topic to discuss. The Lead Carpenter or Project Manager can read all the other information during a separate planning time, but what invariably causes problems is the information that’s not written down.

There are three main areas that are essential but aren’t discussed with production enough, and one more that I’d like to see become standard.

1. The Clients

Not just their names, but how they make decisions, who cares the most about the kitchen, what seems to be their biggest driver for this job, and what about family life?  The Salesperson has usually discovered all of these and has tried to incorporate into the project. If they’re not shared, the on-site manager will invariably make a mistake that will violate something the client assumes is known.

2. Problem Areas

There are always problem areas hidden in the plans and scope. We know they’re there and Sales and Design knows. So talk about them them up front — get it out of the way so the job manager knows the Sales and Design team has thought about these things. The alternative is the Production team discovers them later, and will almost always have a negative reaction.

3. The Budget

We’re always messing with the budget to “get the job.”  The reality is that in some cases we feel we have to, and in other cases we just do. So in the handoff it’s good to alert the site manager about any places that Sales or Estimating thinks are tight or simply have been cut to get the job. This gives the site manager has time to prepare, and it develops trust for their team mates.

4. The Visuals

Recently I worked with two companies that were doing things I thought were very cool during the handoff meeting. Both were centered on visual cues.

We know that the Sales process is visual — clients look at pictures, samples, and often 3D drawings. But then we hand production a 2D set of plans and a written scope.

One of these companies shares the “Inspiration Pictures” that led the client to actually do the project. This gives the site manager an idea of what the client expects. Now, they may have had to tone it down to a budget, but at least there is a real vision for what the client wants.

The other company is sharing a 3D rendering the client sees as part of the Sales process. The site manager now can imagine what the product should look like.  If there’s anything that reality deviates from the 3D vision, it can be addressed before the client sees it in place.

The main idea to remember about this handoff meeting is that the job details are a little incidental. The most important aspect is getting the site manager ready to interact with the client.  If you can effectively set that stage, you’ll have no trouble building the thing!

 

[Podcast] Episode 52: Changing of the Guard: The Unfortunate Side Effect of Growth

Most entrepreneurs want to build a bigger company, but understand that many of their existing processes don’t scale. You go back to the drawing board and make some changes. But the sad truth is that it’s not just systems, but people, who fall behind, dragging the business with them.

In this episode, Mark’s flying solo, and tackling a subject too many business owners try to avoid. The sad side effect of growth is that some of your best, longest-lasting employees simply can’t keep up with the new demands of a larger business.

The first thing to do is recognize it. If they’re still doing a great job, but lack enough time, hire more help. But if the tasks and duties themselves are overwhelming, you need an action plan. Mark talks about what to look for and how to handle it, including:

  • The difference between generalists and specialists
  • Continuing education and coaching
  • How to present the problem
  • Finding a new role — or not
  • When to cut your losses
  • And more…

If you’ve run into this sticky situation, tell us about your experiences in the comments — what did you do?

Click Here to Listen to Episode 52 >>

PowerTips Book Recommendations: February 2019

Every week we ask our PowerTips Unscripted guests to name their favorite business book, and the choices can be surprising — either because they’re new to us or because they’re old favorites that are worth reading again. 

 

Mike Medford Sr., Medford Design Build

The Power of Positive Thinking, by Norman Vincent Peale
Mike’s pick is one of those classics, and it’s a book that comes up time and time again as a recommendation in the podcast.

 

Josh Kelly, RevuKangaroo.com and Parker & Sons Inc.

Way of the Wolf: Straight Line Selling — Master the Art of Persuasion, Influence and Success, by Jordan Belfort
Josh recommends this book to boost your sales game — or for those who are selling for you. It’s an especially deep dive into how to persuade others, negotiate, and become a master salesperson.

 

Steve Barkhouse, Amsted Design-Build

Traction: Get a Grip on Your Business, by Gino Wickman
This book looks at how to strengthen six key components of your business. Steve says it’s a great guide he and his business partner used to implement Amsted’s new leadership team.

 

Jackie Shaw, the founder of Get Organized! LLC

Arrested Development: A Veteran Police Chief Sounds About Protest, Racism, Corruption and the Seven Steps Necessary to Improve Our Nation’s Police, by David C. Couper
It may not seem like a business book a QuickBooks guru would love, but Jackie says that though it’s about policing, it has great lessons about the principles of leadership and what that means for an organization.

 

Chris Katkish, InSite Builders and Remodeling

Getting Things Done: The Art of Stress-Free Productivity, by David Allen
If you’re feeling overwhelmed by everything you have to do, you also have to read this book. Chris says it taught him to be organized, by giving him a system for dealing with everything re;ated to his business.

 

Judith Miller, facilitator for Remodelers Advantage

Construction Contractor Survival Guide, by Thomas C. Schleifer
The lessons here are applicable to all remodeling companies, says Judith. The author identifies the 10 reasons contractors fail, and how to avoid the pitfalls.

 

Tanya Bamford, managing director, R/A Marketing Inc.

The Sales Bible, New Edition: The Ultimate Sales Resource, by Jeffrey Gitomer
While this book if filled with great sales tips and techniques, Tanya loves it for the remodeling industry because of its emphasis on outstanding customer service as a sales tool.

 

What’s on Your Desk or Tablet?

What books have you read recently? Let us know in the comments, and tell us why you recommend them!

Disclosure: The links provided above are Amazon Affiliate links and that means, at no additional cost to you, Remodelers Advantage may receive a commission if you click through and make a purchase.

Building Green, Earning Green: Consumers Want Healthier Remodeling

In a new study, researchers at the Joint Center for Housing Studies of Harvard University have identified that consumer interest in healthy home environments is at an all-time high.

That interest extends to healthy home remodeling projects.

Younger homeowners, those 25-44 years old, are most concerned about their home environment having a negative impact on their health, says the study. But awareness is up across all age groups.

The most important finding for you is that only half of remodeling contractors actively participate in this market niche, according to JCHS’s January 2019 report “Healthy Home Remodeling: Consumer Trends and Contractor Preparedness.”

Of those that do offer healthy home remodeling, more than two-thirds of remodelers participating in the study say that it’s resulted in increased customer satisfaction and loyalty.

Pricing Issues

One of the barriers, for both clients and remodelers, to greener remodeling projects and practices is that those materials are more expensive. Training and certification programs focused on healthy home remodeling practices also cost time and money.

Is this a Niche?

We talk often about finding your unique selling proposition, and how important positioning is in your marketing and business growth.

We also hear and read so much about how to reach Millennials, who are increasingly becoming first-time homebuyers. That age group is the most concerned with how healthy their homes are.

Take these two factors, and it’s not a big leap to think the key to reaching Millennial remodeling clients could be using green building practices and materials, while telling them about it in your marketing.

There is really strong interest on the part of those younger consumers, particularly those with children, on living in environments that won’t have a negative impact on their health. They’re more aware in selecting home-cleaning products, low-VOC paints, and supplies for other DIY projects than their Gen X and Baby Boomer counterparts.

If you’re interested in taking a deeper dive into the study and all the numbers, you can download  the study from the JCHS website: Healthy Home Remodeling: Consumer Trends and Contractor Preparedness. Take a look and tell us what you think.