Can Your Employees Survive a Shipwreck?

Have you ever played one of those educational survivor games? They always start with a crisis (like a plane crash or a shipwreck) that leaves you and your team with only your problem-solving skills and a motley array of items to survive.

If you haven’t been part of a game like this, you should. There are many benefits to having your team work through this exercise, and I’ll give you all the juicy details in this week’s episode of PowerTips TV!



What about you?

Have you tried this exercise with your team? How did it turn out? I’d love to know! Tell me about it in the comments below!


Project Sweet Spot: Where Profits Are Easy!

Do you know what what kinds of projects deliver the most profit to your company . . . and do so on a consistent basis . . . and do so with the least amount of headaches?

You should, because this is exactly the kind of project you want to repeat over and over and over again. This project takes full advantage of your team’s expertise. This project maximizes your returns. This is your Project Sweet Spot.

Sweet spot projects are defined by:

  • Those that are produced with a higher-than-average Gross Profit Margin consistently.
  • Those that are familiar to your production team so that they are produced quickly and efficiently.
  • Those that leave a delighted client every time.

Every company that we work with has to individually determine their own Project Sweet Spot. Much depends on their staff. For example, some production teams can crank out pop-top additions at a profit every time . . . but produce lower than needed margins every time they do a job over $200,000. Others love the huge projects that are sold for $500,000 or more and know how to produce them efficiently. Often these companies don’t manage smaller projects well.

Your sweet spot may also depend on your marketplace. The important thing is to know what your company does really well. This information can be invaluable when you’re making decisions on what jobs to go after and what jobs to accept.

Many remodeling company owners think they know what their ideal job is . . . but do they really?

How to find your sweet spot

To find the projects that fit into this money-making sweet spot, gather the following information for all jobs completed over the last 12 months and list them on a spreadsheet for easy sorting and calculations:

  • List of Jobs Completed over the last 12 months. For each job, include
  • Sales Price (Revenue)
  • Gross Profit Margin (%)
  • Gross Profit $$ produced
  • The Lead Carpenter or Project Manager in charge of each job
  • The salesperson who sold it
  • The person who estimated it, if this is different from the salesperson

Create a simple spreadsheet to sort this information. First, sort by Gross Profit Margin. Do you see any similarities in those projects that delivered the highest Gross Profit Margin? How were they similar in size? In scope? Were most of the profitable jobs within a range?

Did the same Lead Carpenter or Project Manager produce the majority of high profit projects? If so, tap into this individual and identify what s/he is doing right that delivers such great results.

Review to see if the person who sold the jobs had an impact. If the one particular salesperson sold the majority of jobs with the highest – or the lowest – margins, learn from the great one and train the person selling the low profit jobs.

When we are collecting data from our Roundtables™ Peer Group Members, we ask them to share their gross profit margins within certain ranges. For example, a typical full service company may use the following ranges:

  • Under $15,000
  • $15,000-40,000
  • $40,000-75,000
  • $75,000-100,000
  • $100,000 – $150,000
  • … and so on.

Then, they provide the average gross profit margin for the projects produced within each range. The information typically points clearly to the projects that the company produces best . . . and which projects should never have been accepted.

Now this isn’t to say that you should only take jobs within your sweet spot range . . . but the information can help you make the best strategic decisions for your company as you move forward. In fact, this is the reason we work so hard with our members to produce accurate information in many areas of the business. The more accurate the information, the better decisions you can make.

What about you?

Do you think know what your job sweet spot is? Did the procedure above support your assumption? Please comment below!

Image courtesy of digidreamgrafix at FreeDigitalPhotos.net

It’s Yes or No… there is no ‘Maybe’

Yes or No but Never MaybeWill Hummel of Ferguson was sitting in on one of the Remodelers Advantage Roundtables™ Meetings that I ran this spring. At some point in the meeting Will said that what you want as a business person is a quick “yes” or a fast “no”. What you did not want was a slow “maybe.”

Think about how important this concept is regarding your business.

In sales a slow “maybe”, otherwise known as “We need to think it over”, can suck up large amounts of a salesperson’s time. If the salesperson gets a fast “no” she can then move on to new potential clients, instead of wasting her time fruitlessly trying to followup.

During the actual remodel the need for decisions to get made with limited information at hand occurs on almost a daily basis. It is important to teach your people how to make decisions in a timely way, even if it involves risk, so that the company is more likely to meet its goals. Getting bogged down in collecting a lot of information oftentimes does not make it so a “better” decision is made. All it sometimes does is slow the project down, consequently increasing the cost of doing the project and reducing the company’s ability to take on new projects sooner than later.

Preach to your people the benefits of a quick “yes” or a fast “no” as a routine part of being in business. Your people will like it and will be less likely to present you with a slow “maybe!”

Is this a real problem for you?

If you’re getting “we have to think it over” more often than not from your sales calls then you should check out Getting Rid of the Tire Kickers and Getting the Work You Want!

I want to hear from you!

Please share how you avoid getting the slow “maybe” out of prospects, employees and subs in the comments below.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net