Is Head Trash Holding You Back?

For the last 25 years or so, Linda Case and I have worked with owners of remodeling companies and have had the wonderful opportunity to get to know many of them very well. From time to time, we work with someone who has a hard time accepting that the ideas we are presenting can make a very positive difference in the company. Often it’s because they’re carrying around Head Trash — pre-conceived notions that they believe are truths! Below are some popular forms of Head Trash. Be sure they’re not holding you back!

  • Head Trash #21  If I know the technical part of the business, I can run a great remodeling business.
    This myth has been clearly debunked.  Grab a copy of The E Myth by Michael Gerber if you aren’t convinced.  It’s good you are in the business you love but now you’ve got a whole new boatload of learning to do. As the owner of a company, you are much like a pilot making decisions based on her instrument panel readings.  Many of those readouts for you will be financial and will come from having good accounting software run by someone who is knowledgeable.  But the real financial management of the company can’t be delegated.  You don’t have to know the software or bookkeeping details but you do have to know what the numbers mean.  Remember – your technical expertise will be invaluable but your financial knowledge will keep you in business.
  • Head Trash #19   I can’t get that profit margin in MY area.
    Whenever we hear this, we quickly pull out dozens of examples of other remodelers who ARE getting that margin in EVERY market! It can be done. . . but you have to be a superior salesperson and consistently deliver on your promises to get it.  It’s worth the effort to learn how to sell the value that you deliver because it will take you out of the indentured servitude that applies to so many remodelers! You deserve to have a comfortable life and earn the money for which you work so hard. Get rid of this head trash and go get it!
  • Head Trash #16  No one can do the job as well as I can.
    Good thing the founders of Exxon, Walmart, Google and thousands of other businesses weren’t crippled by this thinking.  Where would those companies be now?  You can’t grow until you learn to delegate. And to do that, you need great employees. Believe it or not, they are available and it’s up to you to find them, recruit them, and keep them! If you’ve been playing sandlot remodeling, picking from the folks you happen upon casually, it’s time to start playing professional remodeling and recruit the best people for each position on your team!  Start with a topnotch job description, assessments that measure skills and behaviors, and an enticing ad. Then interview only the cream of the applicants and prepare ahead of time so that you have strong interview questions at your fingertips.  You’ll improve your hiring substantially.  Take your time during this process and, if you do hire and then find they are not a great fit, quickly release them back to the community.  With a thoughtful process and tools to help, you’ll find yourself surrounded by a fantastic team that will help you grow beyond your dreams.

We’ll share more of the common Head Trash issues in PowerTips to come. Take a step back now and think about your own business and then take any head trash holding you back straight to the mental landfill!

Planning in Uncertain Economic Times by Linda Case

In September of 1930, at the start of the Great Depression, business people and politicians gathered in Cape Charles, Va. to perform a mock burial. Caskets containing “Old Man Business Depression,” his wife “Mrs. Pessimism” and his daughter “Miss Misfortune” were unceremoniously dumped in a watery grave in the Chesapeake Bay. Unfortunately, while temporarily lifting the spirits of the onlookers, this act did nothing to end those troubled times.

Here we are in the Great Recession. We can do all the burying we want, but none of us – including our government – has an economic crystal ball. So how can we plan 2010 effectively?

I’ve got some ideas – but remember that all consultants have their biases. I tend to be conservative and value safety and security over big risks that lead to big wins or watery graves. My guts tell me that we’ll have a very slow, somewhat rocky recovery and that in the 5 year time frame we won’t see a rebound to anywhere near our 2006 levels. Maybe by 10 years out, we will see a significant loosening of the consumer’s purse and credit availability. So I would plan very carefully, with multiple scenarios and would be predicting a 2010 much like 2009 with a 5-10% loosening of leads and sales. Because of the uncertainty, I would focus on short term planning and make monitoring and updating those plans my best weapon in such uncertainty.

I’ve just come from a meeting of 30 of our clients, who tend to be top remodelers, and while this won’t be a scientific survey it may help you in planning. They come from all over North America.

  • 5-8% are doing well, have enough work, have some backlog of unstarted work. A number of those are in Canada where the recession has been milder. Most are working harder than ever with fewer leads, a poorer closing ratio (1 out of 8 vs. 1 out of 5), and smaller job sizes.
  • All of the remodelers now recognize that marketing must be a critical component of running their businesses. While it used to be a matter of pride to say “all my leads come from referrals,” that referral base today cannot support the company. While marketing expenditures of 1-2% were common, it now takes 5-6% of your projected volume to deliver a marketing plan that will support your downsized company.
  • Marketing that works includes making clients deliriously happy with your work and substantiating that with third party surveying – that’s your base. It also includes marketing back to your referral base six times a year with a variety pack of communications, events and programs. Climbing high on the marketing hit parade is belly-to-belly marketing where you and your staff work in key organizations in your community, where you create your own networking group that agrees to exchange leads between top quality companies, and having your “elevator” speech ready about your company and being out-front but not obnoxious about letting everyone (yes, everyone) know what you do. Meantime you’ve got to be upgrading your website and optimizing how high it appears on search engines. Online newsletters still appear to be effective but you need to have gathered e-mail addresses for your database.
  • Marketing outreaches that are much much weaker now include newsletters, postcards, virtually any mass mailing. I’m still not a fan of yellow pages except for phone listings (though more and more folks are using their phones and online to get listings). Yellow pages do work for trade contractors and specialty companies. Magazine ads usually do not work and newspaper ads are expensive and usually a bust. The jury is still out for pay-per-click on search engines and usually that would be a tactic only for a multi-million dollar remodeler.

So get planning and involve your staff – the bigger the brain trust, the better. It should be an exciting ride. Next month, I’ll give you some strategic planning tips so you can start with a bang. Maybe a quiet bang, but a bang.

Internships Ease Office Workload

If you need some extra help in your office but don’t have the budget—or enough work—to hire an employee, consider bringing in a part-time unpaid intern from a local college or high school.

Len McAdams, founder and president of McAdams Builders in Kirkland, Wash., posted an ad for non-salaried internship on craigslist (www. craigslist.com) and received many responses from interested students. “We continued to receive applications 2 weeks after the ad ran, says the remodeler.

McAdams selected Dan, a student in his senior year at a local college. At McAdams Builders, Dan’s duties include keeping the company’s image current on various social media Web sites and scanning old files for permanent storage.

The arrangement is a symbiotic one. Dan is gaining experience in a business environment to enhance his resume. In return, “We have a high-energy person doing things we would otherwise not have time to do,” says McAdams. The company also benefits from Dan’s young insights and perspective—“which are, unfortunately, lacking in our aging staff,” says the remodeler.

McAdams points out that he is carefully following legal advice to make sure that Dan does not become an employee by accident. “A maximum of 12 weeks and 20 hours per week (Dan works far less) are a few of the criteria,” says the remodeler.

Before you bring in an intern, sit down with your staff and identify tasks you’d like the intern to do. Perhaps he or she could draft customer satisfaction surveys, help organize a home tour, put client files in order, send out invoices, or possibly shadow some of your production personnel to help them with miscellaneous administrative tasks.

You may want to contact a nearby college or high school and talk to a guidance counselor or department head to see what kind of tasks would benefit and interest students seeking internships.

As McAdams did, be sure to consult your lawyer about work hour limits and other federal and legal stipulations for unpaid internships.


Book Review: The Knack How Street Smart Entreprenuers Learn to Handle Whatever Comes Up

This book is written by two of my favorites from Inc. magazine, Norm Brodsky and Bo Burlingham, who totally understand the challenges faced by owners of small business.  As we see regularly with our consulting clients, people building a business look for a silver bullet, a step-by-step formula or set of rules to help them grow profitably and successfully. Unfortunately for all of us, that doesn’t exist! Instead, you have to grow a certain mindset that will help you handle the ups and downs of business. Brodsky and Burlingham call it the Knack.

This is a must read for all of us as it uncovers the major challenges, forces us to look at our most critical business information, and tells us how to build a business that fits us. One of the pieces of advice they give is to follow the numbers. Boy, they took the words right out of my mouth! We all agree that this regular review and understanding of our numbers is the best way to spot problems before they become life-threatening.  Some of our clients and members ask why we spend so much time on the numbers and this is exactly the reason. We want you to understand where your company is heading in enough time to take action to change if necessary.

If you aren’t following your numbers the way you should, let us know. We can help.

We are delighted to welcome Bo Burlingham to our 2010 Business Summit as our Keynote Speaker.  You’re invited too! Learn more about the Summit here.