The Design Builder's Blog

Guest Blog: As Designers, Are We Honest in our Business Dealings?

In the design industry we have many challenges besides meeting the concerns, wants, and needs of our precious clients. Many businesses have resorted to marketing on the basis of something for free. It prompts clients to want what is offered for free, however, at the same time, causes the knee jerk reaction question to arise, “How can it be free, what’s the catch”?
This poses itself as one of the challenges most noteworthy; the honest perception of value that is created. For a certainty, most trends are to downplay, for market segmenting purposes, the true value of reputable trades or product.

As designers we need to realize that no sale is really complete until a successful installation of product or service has been provided for the paying, trusting client. This client in-turn may or may not be a super advocate for our business’ success, depending on the final result.

Wouldn’t it make sense as designers to present all services and products in the true light of actual cost, thus leveling the playing field by being honest in our business dealings? Is it not tantamount to lying to present design or trade services as something that can be commoditized for less than its true value, or for free, when we know it isn’t?

To advertise something for “free” in reality means something else needs to recoup the costs related to the “free” product or service. This is, in all respects, “Bait and Switch” by offering something for free that really isn’t. Doing so may call into question being honest in our business dealings.

“Bait and Switch” tactics are used all the time by many larger corporations and have severely damaged flooring installation, renovation, carpet cleaning, vacuum sales and services, design agent services, product value and the like. The result leaves well intentioned clients in a quandary of who, why and what they can trust.

All operations that work on lowest price marketing set everyone up for failure and feed our waste facilities with massive amounts of materials, due to bad decisions made as a direct result of unscrupulous enterprises who are in it just for the money and opportune themselves to the consumer disposition being taught today. It may be manufacturers, distributors, retailers, advantage driven designers and sales persons who are not honest in their business dealings. Full disclosure of what is lacking in the offer is skillfully sold over to reap unjust profits, at the expense of the honest and unwary, with no regard to the environmental impact.


Lowest cost marketing is not being honest in business dealings, as it may not spell out the true reason something is less, or much less, as many products and services, on the surface, appear to be the same. The adage, “You Get What You Pay For”, is usually visited after the disappointment comes, once the bargain fails to meet the expectation and the delight for the savings is replaced by the sinking feeling, “I’ve been had again”. As designers, is this really the outcome we want our clients to experience, let alone, having to deal with it once exposed?

As designers, we should never want to feed the greedy price shopper mentality created by corporate opportunists and smaller businesses who buy into this mindset. By reflecting on true value all the way around, it makes good sense to present our services and that of others in the true light of costs and need. Today many are thinking in line with “save the planet”. This means as designers we want to be the forerunners in leading and educating by example. Therefore, let us be honest in our business dealings, and thus save our designer business services, giving due representation to great trades, products, costs, the environment and education of our precious clients while we are at it.

Guest Blogger: Ron Preston started into the trades at the age of 13 with tools purchased from savings acquired working seven nights per week. Today at 53 he enjoys working with people to bring their dreams to fruition and writes regularly to share his knowledge and thoughts. Let Ron know what you think about his guest blog and the opinions he offers.

Contractors Are Unknowingly BUT LEGALLY Giving Away Their Identity To Lead Gen Companies

I constantly read forum posts about contractors’ being shocked to discover they are being re-directed away from their own company when searching for their own company online, and then are directed to a lead generation service. The issue is rampant – but unfortunately, the situation is typically inadvertently created by the contractors’ themselves.

So let's just jump to some research we did at MyOnlineToolbox

We never intended to focus on the specifics of Lead Generation Terms & Conditions.  The issue started to intrigue us when a handful of our contractor website marketing clients were having challenges getting website leads.  We discovered through our research that these contractors signed up to one or more Lead Generation Services over the years.  The contractors simply did not realize how hard it was to literally compete against themselves based on how well the Lead Generation companies were using their information against them.

We read the Terms & Conditions of numerous Lead Generation companies.   It is important to note that every lead generation company views anything you submit to their site for content as their own. That includes your business biography, services, testimonials and pictures.  The terms sometimes have a permutation of wording that states "the contractor agrees that a consumer MAY NOT be directed back to the contractor if the contractor does not have the appropriate spending limit and other limitations".

We think it is fair to replace MAY NOT with WILL NOT when money is not to be made.  And considering the whole issue is already ambiguous, we also wish someone could explain what "OTHER LIMITATIONS" means since we feel the limitations are definitely directed against the individual contractor.

And, to make matters worse, the terms also state the contractor agrees the lead generation company can take the content (reminder: your Business Bio Information that you submit) and use, copy, reproduce, and sublicense any content on your profile page to drive traffic to the content.  But they do not have to pass the consumer to the contractor.  

So let's guess what the lead generation company will do next... You wonder?

We interpret the situation this way:

The contractor is asked to sign up, pass along his/her identity to the lead generation company, and the lead generation company can use the information anyway it wants if you do not pay them forever.

Just imagine if every contractor knew up front, in big bold explanation what he is giving up when he agrees to join a lead generation service (for free or paid, doesn't matter).  But many times we feel the contractor is being misled into not only what he is getting for free, but also what he is not getting and how their company information may no longer be used to their company’s benefit. 

It begs to wonder why anyone would agree to one way terms with something as important as their business identity.

Maybe we are wrong

If we are wrong about this let’s hear from a lead generation company who feels we are wrong and can offer a specific explanation as to their terms and conditions to ensure contractors know the difference between your services and other lead generation services.  But it would also be nice to hear that, unconditionally, your company would never use a contractor's business data to drive traffic to your site in order to then connect a potential consumer with different contractor.  

For more information

Unfortunately we discovered so many ways information is used against a contractor that it was easy to organize and share our findings with a visual understanding.  We do that here in a few short videos lumped together as Say No To Lead Generation Companies.

So in summary, there are only two ways to win at getting more online lead opportunities:

1. Do not sign up for any Lead Generation Services to avoid content being used against your company over a period of time.  And if you feel so compelled to try a service, then by all means just read the Terms & Conditions first since you may have second thoughts.
2. Have your own website and learn the basics of website marketing (referred to as SEO Search Engine Optimization).  A little bit of website tweaking will give you years of ongoing opportunities.  It is not that hard all.

Guest Blogger: Brian Javeline is President & Co-founder of www.MyOnlineToolbox.com, providing business software and the industry’s popular Contractor Website Online Marketing Education Class.

Building the Right Team: How to Work With the Architect, Subs & Designers

As a contractor, you know that building a custom home or doing a major remodel is not a one-person job. You need to work with an architect, an interior designer, one or more sub-contractors and any number of laborers—and, of course, the homeowner. Getting everyone on the same page can be the difference between an amazing house and a patchwork disaster.

Who’s the Boss?

The buck stops with the owner. The one who is paying for the work is the top dog, even if it doesn't always feel that way. Hurricane-torn Florida has some of the strictest construction laws in the nation, so let’s use it as our model. A full construction team may consist of an architect or engineer, a building contractor and an interior designer. The contractor may hire subcontractors. All of these people are, in some ways, like employees of the owner.

At the top of the chain is the architect. Since he or she is the one who has taken the owner’s ideas and turned them into schematics, all significant changes need to go through him (or her). These changes are done via a written document called a change order. The use of a change order is important and often costs money, so get agreement from the owner and interior designer before you issue one.

The Social Aspect

In a study about collaboration, students from the architecture, interior design and construction schools of Mississippi State University were blended into different collaborative groups, ranging from highly engaged to mainly separated. The findings showed that the groups with the most social interaction had the most creative outcomes, though not the fastest completion rates.

Bring your construction team and your interior designer together for coffee and make them talk. With construction, speed is not necessarily your friend. Some jobs take time to do them right. If your people cannot find the time to sit and understand the project, then they will not have the time to do the job correctly. For example, a designer working with a contractor on windows and lighting might meet at a Shade Store showroom to point out ideas as they discuss them. They do not need to become fast friends, but they do need to work together on a creative level.

The Subs

Most contractors do not have a licensed person on their team who can handle all the components of a construction job. For roofing, foundations, plumbing and electrical, they will usually subcontract to a licensed professional and or expert. In many cases, the interior designer may be a subcontractor of the lead contractor, making him the designer’s de facto boss. Whichever way you structure the construction process, you have some legal issues to handle. Make sure to meet with and manage your subs since, at the end of the day, you are responsible for paying them.

Guest Blogger: Paul Reyes-Fournier has served as the chief financial officer for social service organizations, churches and schools. He created his own marketing firm, RF Media. Paul holds a BS in physics and an MBA.

Why Building a Backlog of Work Could Cost Some Contractors a Lot of Money

Builders, remodelers and lumber dealers often get in trouble with lumber framing packages by overlooking the obvious…the volatile lumber market. Most contractors and lumber dealers do not have the luxury of pricing a job today, signing it tomorrow and buying the required materials the next day. By the time a job is priced, signed and the lumber gets delivered to the jobsite 30, 60 or even 90 or more days may have passed and lumber prices may have changed as much as 20%. At the Estimating Workshops I did this concern comes up quite often and attendees often share how their profits are affected as a result.

An educated guess is much better than a Wild Ass Guess!

Matt Layman is the publisher of The Layman’s Lumber Guide. I met Matt through LinkedIn. His expertise is forecasting “when” lumber market pricing will change. Having and using the information he assembles through his research can help contractors and lumber dealers price future jobs involving framing materials with precision.

According to Matt lumber prices are reported twice weekly.

He says some weeks do not change at all. However he also points out that 70% of the time they do change by an average 2.5% each week or 10% per month.   Based on those realities a contractor who estimates a framing package using today’s lumber costs at $10,000 may end actually paying over $13,000 for that same package 90 days later. For those of you who understand how margins and markups work, not only will the contractor have lost the $3300 due to price increases, but also the gross profit margin on that difference. At a 50% markup that’s another $1650 of gross profit that could have been included in the sell price to help cover overhead and profit.

If as a contractor you buy a lot of framing materials you may want to consider subscribing to Matt’s monthly publication called the Lumber Market Blueprint. I also think lumber dealers serving contractors could share this information with their customers on a regular basis. Doing so would be a great service that could help differentiate them in the marketplace.

The image above is an excerpt from the February issue of Matt’s Lumber Market Blueprint. Notice that the information not only includes his predictions for the next 30, 60 and 90 days, he also offers some insight as to why he makes his predictions. I suggest by knowing the why’s behind his predictions you can consider your own pricing adjustments if for any reason conditions change dramatically during the month.

I appreciate Matt allowing me to share this information with you.

If you are a contractor do any of your lumber dealers share this kind of info with you?   If so, it would be great if you shared the name of the dealer with us as well as an example about how the information has helped you.

Selling Bathroom Remodels? Talk to Homeowners About These 3 Important Aspects

Bathroom renovations make homes more modern, but the return on this investment is lower compared to other home remodeling projects. The average amount recouped from a mid-range bathroom project (those costing around $16,000) upon selling is 70 percent of total costs, according to Remodeling magazine. Kitchen remodeling projects recoup about 80 percent of costs, as do siding and windows replacements.

Contractors can do themselves and their clients a favor by helping them decide on the particulars of their projects to maximize ROI and aesthetic value. Homeowners are more likely to close deals with contractors looking out for their best interests versus one simply looking to make a profit.

The Money Conversation

Most homeowners already have a budget in mind for their bathroom renovation. This is where a contractor's expertise can win the trust of prospective clients.

The National Kitchen and Bathroom Association recommends bathroom renovations cost between 5 and 10 percent of the home's total value. The bill not only includes materials and labor, but back-end expenses like supplies, legal services and secretaries. Thus, homeowners should feel comfortable and confident paying $25,000 for a bathroom remodel in a $250,000 home.

If another contractor is offering to do the same job for far less, emphasize to the prospective clients that they will ultimately get what they pay for. When contractors lower final costs simply to close deals, they are cutting costs elsewhere to make up the difference. Always provide detailed, itemized estimates, so prospects can compare your market-value offer to bargain-basement options.

No Rearranging

Some ambitious homeowners may envision moving the toilet where the tub once was and adding a second sink for a his-and-hers effect. But unless they have an unlimited budget, it's not a good idea.

Janice Costa of Kitchen & Bath Design News told HGTV that the quickest way to make final costs skyrocket is relocating the plumbing. A new sink in a different location means a new hot water pipe must be added. A new toilet waste pipe can add upward of $1,500 or more to the final bill. Moving the vent stack—which regulates air pressure in the drainage system for multiple-story homes—could add up to $10,000 to the final bill. Keep the existing plumbing to keep costs down.

Choosing Materials

Since most bathroom remodeling projects require ripping into the floor, new tile is inevitably going to be part of the job. Safety-conscious homeowners—particularly those with elderly family members—will want flooring that looks good and mitigates injury risk.

The Centers for Disease Control and Prevention estimates there are 85,000 bathroom slips and falls resulting in hospitalization every year. Tiles with textured surfaces and matte finishes are best to prevent these types of injuries. Smaller tiles with more grout lines are also recommended.

A common theme for master bathrooms these days is removing the tub altogether in favor of a spa. Of course, there are caveats when it comes to installing an indoor hot tub—for starters, they are large and difficult to get indoors, and many must be installed on a ground floor due to their weight. In addition, there could be problems with humidity levels when the spa cover is removed and floor damage if the unit leaks, according to Hot Tub Works.

When choosing faucets and fixtures, the quality comes down to the material they're made of. Brass is the most expensive but also the most durable, particularly in homes with hard water. Zinc-alloy faucets will corrode eventually and need replacing. Chrome-plated faucets are durable but require a lot of maintenance to maintain their shine. Avoid faucets with plastic cores altogether.

Homeowners know contractors need to make a profit. But the more information you give them upfront, the more they'll entrust you to do the job.

Guest Blogger: Brian Wilkins is an Arizona State University journalism grad who has worked as a radio broadcaster and banking industry professional. He is an independent journalist, blogger and small business owner who loves life. He lives off-the-grid and has not owned a TV in more than six years.

Design and Specification Considerations for Remodelers Looking to Break $1Million

If your goal is to grow your remodeling business past the $1Million installed sales volume threshold the business will need a design and or specification process.  That process must support the ability to perform a "handoff" between the salesperson and the production team that will build sold projects.  Without adequate plans and specifications the production team and a project's lead carpenter will be constantly contacting the salesperson for the information needed to build what the customer is expecting.

Even if you do not plan to offer design services, or even if you work from plans created by an architect, it is likely the projects you build still require design and or specifications at some level. For example replacing a back entry porch and stairs can involve designing the railing style, or specifying the decking materials your business recommends to the homeowner to serve their expressed purpose.

Here are several design and specification considerations remodelers should address if their plan is to grow past $1Million. 

Be honest about the level of design you can offer

Be honest not only to your customers, but also with yourself.   I fortunately recognized very early in the building of my business that I was not a designer.  I can build any design you give me, I just don't have the right talents to design renovations at the level my target customer expected and deserved.  So, if you do offer or plan to offer design services make sure you find the right talent to do so.  That person could be an employee, or as in my case, that person could be a subcontractor.  Don't risk having your client tell you they don't really think you or someone else from your team is a designer.

Manage your risks before you offer design

First, make sure you can legally offer design service where your business operates.  Next, make sure you and or your employees have the right construction, product and building science knowledge and experience to offer design and or specification assistance.  Value engineering for a prospect may help you sell a project, but what if you suggest or substitute products that compromise the design, the structure and or the purpose of the project?   You may own the end result and it could cost you a lot of money.  Consider professional liability insurance coverage; sometimes referred to as Errors and Omissions coverage, to protect you from such risks.

Make sure designs and specifications are complete

This may seem like an obvious point but here me out.  If your goal is to bust past $1Million your plans and specifications should include not just what might be needed to sell the job and or get a permit.  Your plans and specs should really be communication tools that your production team will use to build from.  Measurements, product sizes, rough opening dimensions, center lines and clearances all become critical when building, and even more critical if you want to protect your margins and project schedules.   With the right plans and specifications you can protect your profits and only have to build the project once.

Summary

As produced volume increase for a remodeler, that remodeler must decide between being a contractor and a construction business owner.  As a contractor you can do all of the above yourself, but breaking $1Million will be challenging, require lots of work hours and may not be practical depending on your target project types.  As a construction business owner your role will be to profitably run the business not the jobsite.  If that is your goal make sure your team members will be creating the information each department needs to successfully sell profitable projects and perform their assigned responsibilities.

Why January Is Great Time Of the Year for Me and My Contractor Coaching Clients

One of my goals when working with my contractor coaching clients is to offer them new ways of looking at and doing things than they may have already experienced in the past. At this time of the year we debrief how well they did last year putting changes in place. Our interactions typical include review, celebration, planning and commitments. Using this process proves to be very rewarding for them, and for me as well.

My coaching strategy is to help them explore the options they have to improve and grow their businesses so they can make their own informed decisions about how they want to move forward. I really enjoy working with them in this way because it helps them discover and experience how to think and act on their own. I purposely do it this way so as not to create a dependency on my assistance and so they won’t need me to help them over and over again with the same things year after year.

My calls and interactions with them during this time of the year focus on reviewing the successes of the past year’s efforts. They also include identifying the goals and actions they will commit to in the New Year to continue moving forward on their defined path to personal and professional success. We also agree on how they want me to hold them accountable to achieving those goals.

Here is a taste of what we do in January and why it is so rewarding for me

First they share with me their excitement about their personal and professional progress, and how much more time they have to work on their business, not just in it.

We then review their financial reports for the previous year to see how they did and make sure all transactions are in the right places within their chart of accounts based on the financial system strategy we designed together. This helps get things ready for their accountant and simplifies filing tax returns.

I celebrate with them and point out how much better they did financially than the previous year because of the changes they put in place. Then we discuss budgeting and pricing/markup for the New Year using their historical information as our guide and as a reference. With the economy improving most of my clients are willing to sell at higher prices to help increase volume in the New Year, rather than just sell more work.

I encourage and support my clients in accomplishing a combined total personal compensation and net profit of 20% of produced volume.   This compensation strategy gives them the money and the confidence they need to use some of those profits for investing back into their businesses to continue growing them. That level of total compensation also provides money to build their retirement funds and or finance other investments.

If we have worked on their marketing plan and strategy over the past year we also do a year end review of their results.   After doing so most tell me they want to invest more on marketing this year because of the result they experienced last year.

“Before, when I was working with other people, I felt like I was on a trampoline. Now, when I work with you Shawn, I feel like I’m on a concrete floor.”               David C. Agnew, Custom Home Renovation Solutions, LLC

I actually love what I do!

The business owners I work with are great people. Although they all have different motivations for seeking my assistance, they all share the common desire to remodel their businesses to make them better. As a bonus for me, when they give me the opportunity to help them, I also get the opportunity to help change the lives of their employees, trade partners and the customers they serve.

And, these are just some of the reasons I really love what I do!

How Long Does It Take Before A New Construction Business Sees A Profit?

I came across a great question asked by a group member while participating on LinkedIn. I replied to the question on LinkedIn, but also thought it would make for great info to share with other contractors who might be asking the same question.

Here is the question:

I'm sure we all have heard, "It takes a business 3 to 5 years before it profits." Does this apply for our industry? How long should it take when you start your own business before you start to see a profit?

Here is my expanded answer

Great question. Thanks for asking it. The answer depends on how you define profit.   Many factors can be considered.   Let me offer a few here.

What you charge will be a significant factor

Being profitable does have a lot to do with knowing what you need to charge so you can and will earn a profit. If a business is guessing at their rates earning a profit is a guess as well. Probably more like a HUGE RISK!

Also, consider that investments you make in your business for the tools, equipment and other larger and long term use stuff are just that; investments.   The cost of those items, at least for tax purposes, is not typically assumed to be cost covered in one year of doing business, but rather the cost is typically spread out over several years. The idea is that these items are "invested in" using profits so they will eventually help provide more income and profits than they originally cost.

To summarize, the more you charge the more profits you can earn and therefore the faster you can pay off your investments and show a profit.

Profit is not measured only by how much you have left in the bank at the end of the year

Also consider, as a business owner you may personally be measuring your profitability including the costs of any investments for a one year period. As a result may not see a profit in the bank at the end of the year.  However the money spent on those investments is still considered profit for business and tax purposes. This is the case because when filing your taxes the government sees these investment type purchases as assets paid for with profits.  To get tax deductions for these assets you are allowed to depreciate the assets over time to reduce their value and take tax deductions for them over several years or more. Essentially, for tax purposes, the government measures your profit by combining the money you earned and still have; along with the assets you bought using any profits, as your total taxable net profit. Also, any money your business paid out to you the owner as profit distributions over the year will be considered part of your business’ total taxable net income.

These are a few reasons why a lot of business owners have to report profits earned but may not have any money left in the bank to cover the taxes on those profits. When this happens a lot of contractors view their businesses as not having earned any profit. I suggest as the business owner you can view it any way you want, but the government will still be taxing you and or your business.

Make sure you give enough attention to these important tax considerations

Again, great question to ask. I hope this article helps.   Being a business owner means you have to understand how to manage and protect the profits you earn, but at the same time manage how you will be taxed on that same money.   By not knowing or ignoring these considerations you can be working hard to make money while profits that could have stayed with you are going out the door to the government as taxes. That said there are a lot of great reasons to have a proactive accountant helping you and your business instead of a historian type accountant who only files your taxes for you when everything is already said and done for the year.

Now, go on out there and generate some profits so you have to pay even more taxes next year!

But, don’t pay any more than you have to!

Sales System Considerations for Remodelers Looking to Break $1Million

Well before attempting to break past $Million in installed sales remodelers and home improvement contractors should already have an established and tested sales system in place.  The system should be well defined. Those involved with selling, as well as supporting the sales department at your business, must be trained and held accountable to using it correctly and consistently.  

It’s also imperative to get a salesperson other than the owner in place and productively selling well before passing the $1Million threshold.   Doing this is important because the owner's time will most likely be pulled away from sales for more important activities as the business grows.  

Here are several important sales system related considerations for business owners looking to break past $1Million in installed sales.

Decide on how fast you want to grow your business  

Growth can't happen without sales, sales won't happen without talented sales staff, and having enough quality leads won't happen without a strategic and effective marketing plan in place.   All three of these things must be worked on consecutively and put in place as soon as possible to support a fast pace of growth. Remember, the biggest cause of remodeling business failure is growing the business faster than the systems needed to support that growth.

Decide what Sales System you will use

I suggest you choose a known and proven sales system and sales trainer you feel will be a good match for your desired brand as well as your target customer type. If you are preparing to grow your business I recommend the owner take the training first. Then, after the business owner embraces the system new sales staff can be sent to the same training and trainer.

Put sales goals and metrics in place.

The markup your business uses to price projects should be based on two interdependent factors: the volume of business you plan to do and the combined cost of overhead plus planned net profit. By creating sales goals for the business, as well as each individual salesperson, you can track against those goals to be sure you will meet your planned volume of sales. Also, by having individual goals for each salesperson, you can support them and hold them accountable to achieve the goals and or decide you need to find their replacement. Hitting the goals will be important because coming up short on installed sales will mean you will come up short on the gross profit dollars you needed to earn to grow your business.   Your financial system should be designed to support measuring sales volume by salesperson and determine their commissions earned.

Summary: Remain committed to using the system!

I want to stress that consistency of and with your company's sales approach will be really important as the business grows.  Without consistency it will be difficult for the owner to become a sales manager, or transfer sales management to someone else, because each sales person may approach selling in a different way.   And, without consistency of sales approach, repeat customers and their referrals may not experience what they expected when a new salesperson visits them. Plus, by having a consistent sales approach that successfully helps prospects buy the right solution, you can market the advantages of that sales system with confidence prospects will experience what they expect if they respond you your marketing.

(Note: This is the eighth article in a series of articles written specifically for remodelers who want to successfully break past doing $1M/year in installed sales.  Click here to see a list of all the published articles in the series.)

Marketing System Considerations for Remodelers Looking to Break $1Million

Most remodelers, but certainly not all, rely heavily on referrals and repeat customers as they grow their businesses.  This may keep a contractor doing a low volume of work busy, but relying so exclusively on referrals won't be adequate if you want to become a construction business owner, break the $1Million installed sales threshold and develop a constantly growing business.

The fact is waiting for the phone to ring, having no idea what type of prospect will be calling your business, or what types of projects they will be looking for is a risky and uncomfortable way to grow a business.  Remodelers who attempt to grow without a marketing system in place will experience a roller coaster like ride of sales volume from year to year as well as season to season throughout any one year.  Plus, when leads are slow business owners may compromise on their pricing and even who they allow to become customers.   Doing business this way can be very stressful and frustrating for the owner as well as the employees.

To successfully grow past $1Million at your remodeling company, and sustain that growth from year to year, a strategic marketing plan and system are needed. Here are several important marketing related considerations remodeling business owners will need to address if they want to get up to $1Million. They will also need to already have these things in place to profitably grow past $1Million and comfortably sustain that growth.

Decide your niches

There are many customer types out there all with their own expectations when it comes to working with a remodeler. Successful remodeling businesses are those that strategically decide who they will be and who they will serve. If you choose to work for people who buy on price and expect more than they are willing to pay for, you will get more work from them.  And because people tend to hang out with other people just like them, your past customers will refer you to more customers just like them. Before you do marketing to grow your business decide and define who you want as your customer. Also, think about the project types that make sense for the business you want to develop and grow. For example pull and replace kitchens and bathrooms may not be sexy or all that challenging to you, but remember you are building a company and a team of employees to complete what your company decides to sell. If you decide to build complicated and or highly detailed projects you will need the appropriate systems and staff to estimate, sell and produce that level of project to the expectations of your targeted client type. Choose wisely.

Develop a marketing plan

Marketing is only a cost if you don't know why you are doing it and or if you are doing it wrong.   By having a marketing plan and a way to measure against the pre-established goals in your plan, the money you spend on marketing is more likely to be an investment with high ROI.  Keep in mind a list of marketing tactics you intend to employ is not a marketing plan. Tactics should only be considered and developed after you have decided what you want to accomplish.  To help with the delegation of marketing related tasks the business should also create a marketing calendar identifying not only when defined marketing tactics will be used, but also when supporting activities must be scheduled, delegated and completed to support the on time delivery of the tactics to be used.  I refer to this as "franchising" your marketing because your system and calendar will help you manage the day to day work and activities required to keep it going without the need for micromanagement of the staff doing it. By having a plan you can also estimate the cost of your plan and include that cost in your overhead budget and calculated markup for pricing jobs.

Be strategic about how you do your marketing

Your marketing should serve two very important purposes.  The first is to help your target customer type(s) find you. The second is to convert leads into sales. The marketing tactics you use should support these two goals. One marketing tactic that can be really effective at accomplishing both could be your company web site.  For example, done well, SEO can be used so prospects searching online for certain services and contractor types can find your business, and find it on the first page of search engine results. Goal #1 achieved. But once you get them to your site you also need to differentiate your business from other businesses in the marketplace or risk being seen as a commodity. As discussed above, if you know your target niches you can then offer them additional information about those differences and can include customer testimonials as to why those differences were important and mattered to them.  The right information will help prospects decide if your difference matters and they should contact you, or that your difference doesn't matter enough to pay for it and they should look elsewhere.  

Summary

With the right marketing in place growing a remodeling business past the $1Million threshold is much easier and far less risky.  Choosing the right customer types and job types will make it much easier to develop cost effective and highly targeted marketing tactics.  By franchising how it gets done the owner can gain more time to work on other high value activities that keep the business healthy, profitable and growing. The right remodeling consumers want different and they will pay more for the right difference.

(Note: This is the seventh article in a series of articles written specifically for remodelers who want to successfully break past doing $1M/year in installed sales. Click here to see a List of all the articles in the series.)