Find Extra Days, Get One More Job per Year

We talk a lot about process improvement. How can we make our processes easier, better, faster and ultimately cheaper. And most of the remodeling companies I get to work with have given considerable thought to improving their processes. 

But once major changes are made, continuous improvement is much more about finding the small, incremental changes rather than huge leaps.  It’s time to look for those little steps along the way that make an immediate and dramatic impact. As a result, sometimes it might seem like the extra effort is simply not significant enough or not important to implement. 

But consider this … how much would it affect your bottom line next year if you could get just one extra job through production? Would it make a big impact? Would it be worth the effort? 

I’m here to suggest it would.

Let’s Run Some Numbers

Let’s run some hypothetical numbers, and use a simple example to illustrate this idea. Say you do 15 jobs per year, at an average of $100,000 in revenue per job. The average job takes about 90 days in production, and you generate a good 30 percent gross profit margin. 

This gives you $450,000 in gross profit on $1.5 million in sales. Your overhead runs about $350,000 and you net $100,000 per year. All in all, not bad. 

So, then add in e continuous improvement process —LEAN, in our case — with the objective of reducing the number of days for a job from 90 on average to 84. By streamlining processes, improving communication, avoiding delays and eliminating other waste in the job, you reduce each of the 15 projects by six days. Would it make a big difference? 

You’ve Got Extra Days

Well, if you could take those 90 production days and do just one more $100,000 per year job, you would generate approximately $30,000 in additional gross profit. But, keep in mind our overhead has already been covered. So, the increase in gross profit would also yield a $30,000 increase in net profit. Therefore, your net profit would increase by 30 percent and bring you very close to the 10 percent of revenue that we like to see companies generate.

Your actual numbers may be different, but the process is the same. Could you improve your workflow just enough to do one “extra” job per year? It might be time to find out what LEAN could do for you.

Need Help Finding Those Extra Days?
We Can Help!

Doug Howard leads our Business Consulting and Coaching division at Remodelers Advantage. He’s worked with both Members and Non-members over the past 2 years and has produced some amazing results for his clients. Click Here to learn more about our Consulting & Coaching Services.

Ep.54: Keeping Long-Term Employees with John Sylvestre

We’re once again talking about the labor crisis in the remodeling industry, but from a different angle. Developing an environment that will keep the employees you have, and help them grow in their roles, will help your company prosper.

In this episode, John Sylvestre talks to Tim and Steve about how he’s created a company that keeps employees — and keeps them happy.

John is the owner of Sylvestre Remodeling and Design in Minneapolis. He paid his way through school by remodeling and building homes and graduated with two degrees in architecture. He’s chaired the NARI education committee and the certification committee and also developed and implemented the Certified Lead Carpenter program. He has won numerous awards for his work in education including the Harold Hammerman Award from NARI. He says he has the best job in the world, drinking coffee and talking with people about changing their homes.

John’s team is filled with long-term employees — his Field Supervisor has been with him for 37 years, and was his first hire, his Production Manager for 26 years, and his Lead Carpenter for 27 years. He talks about how he finds and hires great people, and how he keeps them, including:

  • Letting people go in a direction they choose
  • Hiring well-rounded people
  • Understanding limits
  • Hiring for culture fit
  • Empowering your employees to make decision
  • Asking the right questions to spur hiring and development
  • How to train in your organization
  • Why his company’s like a hockey team
  • Mystery bus trips
  • Keeping your great people during downturns
  • Staying flexible
  • And more …

Including why having fun is so important in keeping the team members you want to remain with you.

We Love Your Ideas

Keep them coming! Send your suggestions for a topic or guest to Tim at tim@remdoldersadvantage.com.

Listen to Episode 54 >>

Ep.53: Make Your Project Manager a Marketing Machine with Doug Panozzo

Of all the things you have in your marketing toolbox — your website, email and direct mail, or social media — there’s one you may have overlooked.

Positioning your Production team to be aware of sales and marketing can be an overlooked marketing strategy, and also help align the office and field teams.

In this episode, Tim and Steve talk to Doug Panozzo, who is a human marketing machine. We discuss how to make that switch in mindset for your Production team, and how it can boost your sales and profits.

Doug Panozzo is a Project Manager for Hogan Design & Construction in Geneva, IL. He’s been with Hogan since October 2017. He came from outside of the industry, from a tech company, and moved into a Project Manager role with Hogan almost a year and a half ago. Since then, he has grown familiar with the industry, became efficient with Hogan’s systems, hasn’t gone over budget on a single one of his projects, and has brought in over $100,000 in sales in the last year.

Sharing the big picture with your team is the start. Doug says working on marketing or sales is job security for him — the more work he can help bring in, the longer he has a job. He talks about how he does it, and how you can get your team involved, including:

  • Selling the company throughout the project
  • Sparking new leads
  • Following up with customers to touch base
  • Finding the incentive — referrals and bonuses
  • Asking for social media posts with tags and reviews
  • Wearing and being the brand everywhere
  • How to start those conversations
  • Picking the right customers to keep in touch with
  • Making the questions subtle and helpful
  • Keeping good notes and setting reminders
  • Building relationships and working the neighborhood
  • Finding the way for different personalities to market and sell
  • How to set the expectations in hiring
  • Giving Production the tools, training, and materials to do it
  • Getting the timing right
  • And much more …

Including why your Project Manager or Lead Carpenter should talk to the neighbors’ cleaning people, and how many leads can come from it.

Let’s Keep It Up

This episode was another spurred by a suggestion from our listeners. If you’ve got an idea for a guest or topic, send Tim an email at tim@remodelersadvantage.com.

Listen to Episode 53 >>

Ep.50: Choosing Estimating Software with Jef Forward

Estimating accurately is critical to the success of any remodeling business. As you grow your business or hand off estimating to an employee, having the right system in place is paramount. It can feel like an overwhelming decision — there’s so much software available. The wrong decision will cost you lost revenue, but even worse — lost time.

Fortunately, there’s a simple strategy to help you navigate this very important decision.

In this episode, Jef Forward talks about estimating software with Tim and Steve. He’s worked with several estimating software packages and systems over the years, and shares what he’s learned.

Jef Forward is the founder — and co-owner with his wife Monica — of Forward Design Build Remodel in Ann Arbor, MI. For more than 20 years, Jef has performed every role within the company, including designer, laborer, carpenter, bookkeeper and estimator — you name it, he’s done it. Now with 24 employees, Jef has two full-time estimators.

Start your decision-making by looking at two factors — getting the estimate itself right and how the program’s output will be presented to someone other than the estimator — especially your clients. The first step is to not look at any software, Jef says. You can get distracted by all the bells and whistles of new programs and miss whether it will really work for you. He talks about the vetting process, what it can do for your estimating, and some of his favorite software choices, including:

  • How to create a Process & Needs document
  • Integrations with other programs
  • Deciding on must-haves and nice-to-haves
  • Mixing and matching vs. all-inclusive systems
  • Not looking for quick fixes
  • Evaluating and testing
  • Who to involve in making choices
  • The fine art of guessing
  • What to do by hand vs. what’s automatic
  • Slicing and dicing information
  • Client presentations and reports
  • And more …

Choosing the right estimating software for your company depends on many factors, but the work done up front will ensure you’re not saddled with a system that doesn’t fit. Taking the time and involving the team will help you make the right pick.

Tell Us More!

Do you have a suggestion for a topic or guest for an upcoming episode? Send Tim an email: tim@remodelersadvantage.com.

Listen to Episode 50 >>

Ep.49: The Numbers that Matter Most with Judith Miller

For many people, the actual building of the project is what Production is all about. Looking at the bigger picture, Production has a great deal of responsibility to keep profit up. Production is a huge contributor to the financial health of the company.

It’s about the numbers — but what numbers are critical for the Production team to know and track?

In this episode, Judith Miller talks about the critical numbers for Production with Tim and Steve.

Judith is the resident financial expert at Remodelers Advantage, and says the numbers tell the story of your company. In college she studied architecture — but failed physics — and switched majors, graduating with a degree in economics. She has combined her love of architecture and building with economics to become a high-level strategist in the remodeling industry. Judith has been a facilitator for Remodelers Advantage Roundtables for more than 15 years, is a featured speaker at industry events, and frequently published in Remodeling Magazine.

If you can lay out a roof, which can be complicated, you can understand the numbers if you put your mind to it, she says. Looking at what numbers are trending, Judith says she’s seeing over-billing numbers decreasing, indicating a drop in sales from last year to this year. The economy may be slowing, Judith says, which makes understanding the numbers from the production side even more important. She talks about:

  • How field labor efficiency affects the bottom line
  • Indirect costs
  • Controlling slippage to protect from slowing sales
  • Job costs to look at in Production
  • Acceptable gross margin levels
  • Profit, loss, and overhead
  • Why the little stuff matters in job costing
  • The 80/20 rule
  • Why to estimate hours over dollars for labor
  • The most important things to hit in your budgets
  • Solving problems together

The most important factor in your bottom line isn’t a number, Judith says, customer satisfaction is. And that’s driven by employee satisfaction. So as you dive into the numbers together, avoid finger-pointing, and work as a team to figure out how to make your company more profitable.

Here are the links to Judith’s webinar about the Labor Burden Calculator:

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Listen to Episode 49 >>

Ep.47: An Introduction to LEAN with Doug Howard

Today we’re talking about LEAN in Production. Doug Howard has been helping remodeling companies see how they can make their processes better, cut wasted effort, and streamline their systems for better profits.

In this episode, Doug talks to Tim and Steve about what it can do for your company — especially in Production.

Doug Howard, RA’s director of consulting services, is an entrepreneur, government official and small business consultant with more than 25 years of experience in leading organizations and assisting his client companies.

LEAN is the idea of having principles and practices to fuel continuous improvement.

One of the best things about LEAN is how clear and simple the concepts are to understand — it works as well for small- to medium-sized companies as it does for huge global enterprises. Doug talks about getting from your current state to your future state with fewer steps in your processes, and where to start, including:

  • The Eight Wastes, and how to eliminate them
  • How to apply the Five Whys to Production to find the root cause
  • Addressing the workplace with the Five Ss
  • How LEAN works with the Zero Punch List concept
  • How it improves the customer experience
  • Why LEAN is like a GPS
  • Involving your subs in the process
  • Conditioning your thought process for the long haul
  • And more …

Including Tim’s interpretation of what LEAN stands for. You’ll learn how to build a system that fits your business.

Want to Get LEAN? Online LEAN Course Enrolling Now

Improve Your Profits & Grow Your Business by Mastering Continuous Improvement Through LEAN – This class is designed for you to get the knowledge, tools, hands-on experience and planning processes to leave ready to begin a LEAN effort at your company and the support to get rolling in the first 90 days.
Click Here for More Information >>

What’s on Your Mind?

If you have an idea for a guest or topic for the show, let Tim know at tim@remodelersadvantage.com.

Listen to Episode 47 >>

Ep.46: Working with Architects with Jason Stearns

There are many different ways to work with architects in the remodeling industry, whether you’re working in the design/build model or as a builder using plans developed outside your company. Regardless of the work model, most remodelers agree the architectural plans they get at the beginning of the production process are only half done. So communication is paramount during the build phase.

In this episode, Jason Stearns discusses the ins and outs of working with different architectural firms from the Production standpoint with Tim and Steve.

Jason has been working in high-end residential market in San Francisco for almost 30 years. He joined Jeff King & Co. as Director of Production in 2017. Since then, he’s helped implement the use of Procore for their production teams, standardized the project scheduling formats, and started a weighted numeric skills assessment system for the evaluating the carpentry and labor staff to identify needed training for advancement.

In each of their projects, there are two clients — the homeowner and the architect, Jason says. He and his team want to deliver the project that realizes the original vision for both parties. To make everyone happy takes clear communication and rigorous documentation of every email, phone call, and design change. Jason tells you how to make that happen, including:

  • Getting information when you need it
  • Establishing good working relationships
  • Creating schedules that work off the budget
  • Looking at the schedule as a living document
  • Identifying milestones for the architect
  • Making objective arguments
  • Staying ahead on change orders
  • And more …

Keeping track of all communications is a major challenge, but it’s the best way to ensure that the completed project is a success for all parties.

Keep the Suggestions Coming!

This topic was suggested by one of our listeners. If you have an idea for a subject or guest, send it to Tim at tim@remodelersadvantage.com.

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Listen to Episode 46 >>

Ep.44: Special Guest Kevin O’Connor of “This Old House”

Television is full of construction and remodeling shows, but we all know many of them leave false impressions of how fast and easy the process can be. But the pioneering program This Old House still shows viewers how complicated it can be.

This year marks the 40th anniversary of the program, and they’re tackling a net-zero retrofit, a mid-century modern remodel, and spearheading outreach programs to get more workers into the trades.

In this episode, Kevin O’Connor, host of the Emmy Award-winning This Old House and Ask This Old House, talks with Tim and Steve about what you see on TV, and how it helps the construction industry as a whole.

Kevin has appeared on the two shows since 2003, and serves on the editorial board of This Old House magazine. He also hosts This New House airing on the DIY Network and Hidden History in Your House airing on the History Channel’s H2 network. Along with his four brothers and two sisters, Kevin grew up on various job sites led by his father, a civil engineer. When Kevin and his wife, Kathleen, were renovating their 1892 Queen Anne Victorian they sent an e-mail seeking advice from the Ask This Old House experts. The house call served as Kevin’s first screen test to serve as the new host (the third host in the history of the home-improvement series).

Kevin talks about the evolution of the show and about the Generation NEXT campaign, cosponsored by the mikeroweWORKS Foundation. It’s a high-profile effort to close the skills gap in the trades, encouraging young people to master those skills and look at construction careers. He also talks about the challenges of working on a job site that’s also a TV shoot, including:

  • Scheduling
  • Scrambling and adapting
  • More about the show’s two projects this season
  • How the show’s contractors juggle TV and their businesses
  • Using their big megaphone
  • And more…

Tim also talks a bit about how business owners can look at Generation NEXT and adapt it in their own communities to help bring more young people into construction and remodeling.

Tell Us About It

Do you have a topic you’d love to see covered or a guest you think we should interview? Drop Tim a line at tim@remodelersadvantage.com and let us know!

Listen to Episode 44 >>

Ep.43: The Importance of Job Autopsies with Chris Beck

A good job autopsy can lay the foundation for better processes and more profits for your company. But you have to do it right. Some companies use them like a club, which leads to finger-pointing and the blame game. Some owners just brood over the numbers and do nothing. But the numbers tell the story, and doing the forensics can tell you how to improve.

In this episode, Tim and Steve talk to Chris Beck of Normandy Remodeling in Hinsdale, IL. Normandy Remodeling has just started involving Production in the job autopsy process at the close of a project.

Chris has been with Normandy for 11 years. He started as Superintendent, and was promoted to Production Manager in April 2015, then Director of Production in January 2018. In 2018, it marked the fourth year in a row of record produced volume. Last year, they completed 220 jobs.

Chris began involving Production in Normandy’s job autopsies last year. Previously, the autopsy had been more focused on sales and design. He saw slippage increasing, and needed to figure out why that was happening. He discusses how what data to look at, and how having Production in a job review can make significant changes for the better, including:

  • How to make changes so you’re not repeating mistakes
  • Getting involved in the financials
  • Changing processes
  • Why it can help you refine your cost book for the higher-end projects
  • Avoiding finger-pointing and blame
  • Why an interactive culture makes it all easier
  • What to document and why
  • Bringing it all together
  • Handling issues before the job ends — or even starts
  • How much time it takes
  • And much more…

Including how to pitch it to your owner if your company isn’t doing a post-mortem. Taking the steps toward doing a complete job autopsy can take you from good to great, and find extra profits for you company.

It’s Your Turn

We’re getting great suggestions for topics and guests — what do you want to hear us talk about? Shoot Tim and email at tim@remodelersadvantage.com with your ideas about subjects to cover and guests to talk to!

Listen to Episode 43 >>

Ep.42: Becoming a Production Manager Without a Construction Background with Brad Yetman

With growth comes a need to hire a Production Manager — someone responsible for the entire department. It can be a difficult transition to move a Production Manager or Lead Carpenter up into that role. It’s about managing a department and the people, and it’s much more complex than running a job. Your company may benefit by looking outside the industry for your Production Manager. 

In this episode, Brad Yetman talks to Tim and Steve about his experience coming into a Production Manager role from outside the remodeling and residential construction industries.

Brad is the vice president of construction, as well as part owner of Anthony Wilder Design/Build in Cabin John, MD. Brad is responsible for overseeing the production department, which produced about $14,000,000 last year. Brad has developed a financially focused approach to production management with an emphasis on “knowing the numbers,” both in the field and in the office, an approach which fits well with the company’s open book policy. But it wasn’t always a smooth transition.

Before joining Anthony Wilder, Brad had a limited background in carpentry and construction. He had worked in in commercial development and real estate. When he took the Production Manager job, he was overwhelmed for the first six months. In his second six months, he began to figure out it was about managing a department and people — and keeping a keen eye on profits. He tells business owners why and how to look outside the industry, as well as what to do when your hire someone, including:

  • Hiring for cultural fit
  • Setting Gross Profit and Net Profit goals at the outset
  • Bypassing hostility from within the department
  • Translating the numbers for those in the field
  • Networking to find an outside candidate
  • The importance of staying open to learning
  • And much more…

Including why having dogs in your office is a cool idea. But the most important thing, says Brad, is hiring a good manager — because the industry specifics can be learned.

What’s the Big Idea?

Do you have a great idea for a future topic or guests? Shoot Tim and email at tim@remodelersadvantage.com.

Project Manager Training with the Experts at Remodelers Advantage

Remodelers Advantage presents a Masterclass course designed specifically for Project Management personnel in the remodeling and custom-building industries.

This program, led by Tim Faller, Victoria Downing and Doug Howard, consists of two days of intensive training and instruction focused on two of the most important aspects of managing a project; (1) hitting the agreed-upon budget and (2) working with and managing the team effectively. Click here for more information.

Listen to Episode 42 >>