Getting Your Remodeling Business Ready to Produce More Work
Growth in consumer spending on remodeling during 2018, and beyond, is expected to skyrocket. This means that remodelers will have the opportunity to grow their businesses, and if done well; will make a lot of money. But is your business ready for the work? If you are already working too hard for too many hours will increasing volume just end up with you in divorce court and or on blood pressure medicine? Below I offer a vision, and some suggestions, for what you can do to be ready. If you already allowed yourself to get in too deep, then perhaps my suggestions can help you create a plan to get things running better than you had ever imagined.
It all starts with estimating.
Estimating might as well be the center of the universe for remodeling contractors. Using a defined process and key information, your production team can conquer that universe. If you grow your business without an advanced estimating system you risk dropping into a financial black hole. Your estimating should not only help provide a profitable selling price, it should also create, document, and organize the information your production team needs to build independently, without constantly bothering you or your salespeople. Done well, it should also help you predict your cash flow needs, and therefore your payment schedules. This way every job finances itself using your clients' money to pay bills on time, not yours. Successful estimating will also help your production team identify and schedule all the resources needed to complete the project weeks, or even months, before they are actually needed at the job site.
A real estimating system includes job costing.
First, an estimate is not 
what you give to a prospective client. That is called a price. The estimate is really the contractor's best guess on what the project will cost their business to complete before overhead and profit are added. That's right, it’s just a guess. To continuously improve the accuracy of that guess, particularly as your business is exposed to new products and construction methods, or brings on new untested employees, job costing will be the only way to reduce the risks of estimating. Imagine going six months or a whole year before realizing you were using inaccurate information. Imagine the benefits of offering profit sharing if your team brings jobs in on budget. But, what if your budgets are never adequate and there are no profits to share, and when your employees ask why you can't tell them?
This all requires a well set up financial system.
Even if you are a good estimator and you never miss any of the sticks and bricks, if you do not know which labor rate and markup to use you may be buying jobs instead of selling them. Without a well thought out list of estimating and matching time card work categories (sometimes referred to as phases), you will never know how well your team did compared to your estimated labor assumptions in specific areas. Also, without the right time card categories, how will you know and or confirm how many non-billable hours of pay you will need to add to, and cover, inside the burden labor rate you assume and charge for their billable hours?
There are plenty of things to work on as you grow a remodeling business. However, if you don't get the estimating of your jobs right growing your business will just help you lose money faster.
The importance to your brand
Managing one way of doing business is hard enough. Do you really want to manage an unlimited number of business methods?
The layout of your workplace is extremely important, because the wrong layout can restrict staff and hinder productivity, while the right layout can help your team to carry out their tasks more effectively and boost productivity and even creativity. For this reason, it is important that you plan your layout carefully and make the right choices.
Guest blogger: Reno Macri is a founder and director of a leading exhibition and event company Enigma Visual Solutions, specializing in retail designs, interiors, graphic productions, signage systems, event branding, modular exhibition stands design, office space planning and much more. He specializes in experiential marketing and event productions. He enjoys sharing his thoughts on upcoming marketing ideas and design trends. Feel free to follow him on twitter.
Remember back in 2006 before the great recession how much work there was for remodelers? Remember how busy you were and how easy it was to sell your services? And, back then, there was a good supply of experience workers and subcontractors. Then the recession came and things changed forever. Well, the remodeling economy has become healthy again and is predicted to get even better for the next year. According to one 
When demand for services picks up so does the market price for those services. If you have been selling on price and as a result haven’t been making enough money to live the lifestyle you desire, both today and when you eventually retire, now is the time to start charging more. And, in addition to raising your prices, be careful how much work you say yes to. The point here is to make sure you don’t pre-sell a whole bunch of work at your current margins. If you do you will prevent your business from being available to sell and complete work when demand and therefore job prices rise due to supply and demand. Although having a good backlog of work can be comforting, coming to realize you could be making a lot more money may lead to strong regrets. Also, keep in mind that material and subcontractor costs will also climb due to supply and demand. Make sure you estimate direct job costs based on when you will actually do the work, not what it would cost if you were doing it today.
The surge in spending will lead to a surge in job leads. This will afford remodelers the opportunity to be much more selective about who they will allow to become customers as well as what job types they will accept from those customers. Remember, the customers you serve will be sending you referrals. Those customers hang around with other people just like them. If you work for customers who beat you up on price and micromanage how you do business, their referrals will likely want to do the same. To avoid working for the wrong customers first 
Selling the work and selling it at high margins is one challenge. But in my option that’s a much easier challenge these days than trying to find and keep enough quality production staff and trade subcontractors to keep up with the work, and complete it with quality. Don’t wait until you already need the help to start looking for them. Instead, recruit good workers now and test them out to be sure they are right for your business and your business is right for them. During the winter months many employees are let go or laid off by contractors who lack good sales and marketing skills. This makes the winter a good time to look for prospective employees because there are more to choose from and because their options of available jobs are limited. Use the next few months to vet out the good ones and send the underperformers back out looking for jobs. Using this strategy it’s likely you will be able to produce the work you sell much easier while your competition has to do the best they can with the workers you passed up and or let go.
Though going above and beyond with the project at hand is usually the No. 1 priority for contractors, creating and cultivating client relationships follows closely behind in position No. 2. Any business owner and manager knows that building and maintaining great relationships with clients — otherwise known as relationship marketing — is key to a company’s success. Many companies, however, do not employ a dedicated customer relationship manager (CRM). But that doesn’t mean relationship marketing should be pushed to the wayside. We’ve gathered four tips on how you can help cultivate positive relationships with clients right now:
Another best practice is to treat every client like your 
The Joint Center for Housing Studies at Harvard University indicates that 
So, here is my list of helpful articles for contractors seeking to advance and grow their production capabilities. The articles will help enlighten you to what your options are as well as several important considerations to be aware of before you jump in and get things started. I hope you find the info helpful and motivating.
As a remodeling contractor seeks to grow his or her business past a million dollars it’s important to bring someone on to help with getting the work done. Without doing so the business owner can quickly become overwhelmed wearing too many hats. At this stage in business it’s important to decide whether you want to hire a Production Supervisor or a Production Manager. Before making the decision be clear on the difference between the two and how you should decide.
When subcontractors become involved in the work they too will be supervised by the Production Supervisor. They will be required to contact the supervisor for project information, onsite decisions and to discuss solutions when challenges and or discrepancies occur at the jobsite.
If the home owner has questions, wants to make changes, and or is upset about something, again those things are typically handled right at the jobsite. The Lead Carpenter can reach out to the Production Manager for things outside of his expertise or authority.
We are all getting older every day. That reality hit my wife and me a few years back, motivating us to seek a new home where we could happily and comfortably grow old together. We wanted a home configured to serve us as our health declines. Just as important we wanted one we could also afford to live in and maintain on our retirement income, without the need and cost to move to an assisted living facility. It’s called aging in place and it’s a huge opportunity for home builders and remodelers seeking to differentiate themselves. In this blog I share a list of links to resources and information for construction business owners and consumers preparing to grow old. I also share the list to help contractors and their businesses take advantage of the opportunity and become part of the solution. Here’s why:
Most contractors can't explain how they do business, they just make things happen. In a smaller remodeling business, say up to about $5-700K of installed work, this may get you by. But as you grow your business, particularly if you want to 
Be careful here. If you don't explain how you do business before winning the bid on an architect driven remodeling project you might just be told how you will do business. Examples include how and when you will be paid, what will be considered a change order vs. what you should have assumed to be included, what margin you can earn on change orders, and what hoops you will need to jump through before receiving progress payments and final payments. Be sure to carefully read any AIA Contracts before signing them.
One of the very important things that hands-on contractors who seek to become construction business owners need to get ready for is bringing on sales staff to help the owner sell an adequate volume of work as the business grows. Below is a 10 item checklist contractors can use to help them get ready for this critical step in the growth of their businesses. From my own experience of hiring my first remodeling salesperson many years ago number 10 is the most important.
Establish Sales Goals and a Performance Based Compensation Strategy you can share with candidates as you interview them and your business will use once they are hired.
