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Getting Your Remodeling Business Ready to Produce More Work

Posted by Shawn McCadden on Sun, Apr 01,2018 @ 05:15 AM

Getting Your Remodeling Business Ready to Produce More Work

Remodeler estimating systemGrowth 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 Remodler job costingwhat 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.

Remodeler financial systemEven 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.

 

Don't Underestimate Your Estimating System Workshop LEARN MORE

If you would like to learn more about improving estimating at your remodeling business consider attending one of our estimating workshops typically offered in Massachusetts.   You can even get MA CSL Credits by attending.  Shawn McCadden can also come to your group, company, remodeler education conference, or remodeler trade association to conduct the workshop.  For more information contact Shawn today.   

 

 

 

Topics: Business Financials, Job Costing Considerations, Profit Sharing, Estimating, Business Growth, Financial Related Topics, Estimating Considerations, Breaking $1Million

The Importance of How You Do Business as a Remodeler.

Posted by Shawn McCadden on Wed, Sep 27,2017 @ 05:00 AM

The Importance of How You Do Business as a Remodeler.

contact us in hand-WR.jpg

How you do business as a remodeler serves certain customers.   And, just as there are many different customer types there are also many ways to do business as a remodeler.   For example does your business charge for design or does it do it for free?   Does your business help consumers pick out their products and colors or does it expect customers will research and find their own products?  Do you offer fixed pricing, cost plus, T&M or all three?   So, have you decide how you will do business and then stick to it as you prequalify prospects, or have you decided to do business whatever way those who buy from you want?  

If you are fortunate enough to get referrals from past clients, do you want to do business with their referrals in the same way you had to do business with them?  If you do business differently each time, will you even remember how you served the referring customer so you can repeat it?   Is that what the referral is expecting or do they have their own plans for how they want you to do business with them?

 

Choosing how to do business as a remodelerThe importance to your brand

Deciding how you will do business is one way to define the brand of your business and therefore the type of clients and project types it will attract.   For example if you offer professional design, and charge for it, people who value design will likely do business with you and be willing to pay for it.   On the other hand if you do design for free some consumers will like free and may be attracted to your business.  However my experience as a design/builder was that people who want free design also expect other things for free.  Which customer would you prefer to attract?

 

Become a specialist rather than a generalist

If someone asked you how you do business what would you say?   Have you already decided and defined it?  Or, would you be at a loss to explain it in a logic order?   If you do business differently, depending on who you take on as customers, what will you decide to say next time someone asks you?  Will your answer attract or detract the prospect you are in front of?  Are you hoping they just won’t ask?

Juggling oranges-WR.jpgManaging one way of doing business is hard enough.  Do you really want to manage an unlimited number of business methods?

Rather than think you need to serve everyone why not decide who your ideal client will be and how you will do business, to both attract them to your business and serve them like they have never been served before by any other remodeler.

Remember, if you are just like all the other remodelers you will become a commodity and will be forced to compete on price.   If you stand out as different, and customers want different, they will have little choice but to pay the price to get different.

Who’s running your business anyway?

 

Related articles:

Contractors and Remodelers: Decide Your Niche and Then Go Get It!

Three Ways To Get Fewer Leads But Close More Remodeling Sales

If One Of These People Asks, Can You Explain How Your Remodeling Company Does Business?

How A Contractor’s Web Site Marketing Can Speed Up The Sales Cycle

Topics: Business Growth, Differentiating your Business, Customer Relations, Creating Referrals

Elements To Consider To Achieve The Right Construction Office Design Layout

Posted by Shawn McCadden on Thu, Feb 02,2017 @ 05:00 AM

What Are The Elements To Consider To Achieve The Right Office Design Layout?

Modern desk for contractor office layoutThe 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.

In this article, we take a look at some of the most crucial elements you and your office design company will need to consider when planning the layout of your office space.


1. The Size of Your Team

In terms of pure office space planning, one of the single most important considerations is the size of your team. If your team consists of around a dozen people, a small, shared space may suffice, but your needs will obviously be rather different if you are employing more than 100 people.

Where possible, you want to try and make sure your layout is future proof too. This means taking into consideration the potential for growth and, therefore, the addition of more staff members.


Office space planning for contractors2. The Nature of the Work

Next, you need to think about the nature of the work carried out by your business. If you primarily require people to stay focused on individual tasks, an open plan design may damage productivity, because staff may become distracted. Instead, it would make sense to try and give staff access to quiet spaces.

However, if you require constant collaboration between employees and teams, the open plan design may be better. If you have a mixture of needs, or if you have staff who work on a variety of different devices, you may want to create a design that allows people to move freely between different spaces.


3. The Views of Employees

One of the best ways to ensure you get the right design is to speak to staff during the office space planning stage of the process and ask them for their opinion. What do they like about your current layout? What do they dislike? What could you introduce to make them happier, or better able to carry out their daily tasks?

Some of the suggestions you get back may not be feasible, but you may also get some great ideas and become aware of problems that you weren't previously aware of. The main people you hope will benefit from a great design are your employees, so it pays to give them an input.


4. The Personality of Your Team

The final element to consider is the personality of your staff members - how they think and what they enjoy. According to John Holland, employees generally fit into one of the following six categories:

Office space layout for contractors

  • Conventional - Organised, orderly, enjoy working with numbers and records
  • Enterprising - Ambitious, competitive, enjoy selling and persuading
  • Artistic - Non-conformist, expressive, enjoy creative work
  • Investigative - Analytical, intellectual, enjoy studying and problem solving
  • Realistic - Physical, practical, enjoy working with machinery or tools
  • Social - Supportive, conscientious, enjoy helping other people

Identify the personality types in your building and work with your chosen office design company to create a layout that suits their needs. If you have a lot of artistic people, you might consider an unconventional layout, but if you have mostly investigative types, they will need conventional private spaces for concentration.

 

Reno MacriGuest 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.

 

Topics: Business Management, Team Building, Business Growth, Guest Blogs, Culture, Business Planning

Is Your Business Ready For The Expected Surge In Remodeling Spending?

Posted by Shawn McCadden on Fri, Dec 23,2016 @ 03:58 PM

Is Your Business Ready For The Expected Surge In Remodeling Spending?

Puzzle pieces on money-WR.jpgRemember 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 article in Qualified Remodeler magazine the Harvard Joint Center for Housing Studies predicts an 8% increase in remodeling spending between now and the end of 2017.  That means a lot more work for remodelers, but only if they and their businesses are ready for it.

Below are three things to consider if you want to be ready to take advantage of the surge in sales predicted to begin in the first quarter of 2017.  How you address the third one could make or break your ability to take advantage of the surge.

 

Decide what your price point will be:

Raising remodeling pricesWhen 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.

Related article:

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

 

Be selective about customers and job types

Targeting the right remodeling clientsThe 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 define the profile of your target client.  Then, armed with that information, make sure you also have a great prequalify process to help you filter through you leads.  When it comes to job types be selective there too.   If you have been doing so I suggest you stop allowing customers to buy their own materials.  It may save money for them to do so, but at the same time it costs your business if you cannot get any margin on those materials.  Instead concentrate on material intensive project types like kitchens and baths.  Earning gross profit by selling more and more expensive materials is much easier than trying to do so by selling and managing labor.

Related article:

25 Sample Questions Contractors Can Use For Prequalifying Prospects

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Get your production resources ready

Carpenters_with_nail_gun-wr.jpgSelling 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.

Related article:

Afraid To Hire Employees For Fear Of Running Out Of Work For Them?

 

Topics: Sales, Hiring and Firing, Business Growth, Prequalifying, Creating Referrals

How Contractors Can Build and Better Their Client Relationships

Posted by Shawn McCadden on Tue, Jul 05,2016 @ 05:00 AM

How Contractors Can Build and Better Their Client Relationships

Ways Contractors Can Build Better Client RelationshipsThough 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:

Connecting the Dots

One CEO says her best tip is to be a connector. In other words, when meeting a potential new client, or even a current client, ask yourself what you can do for them. Aside from the job or project at hand, perhaps you’ve gleaned from the conversation that he or she could use a referral to a good painter, or even something as minor as a good place for lunch. Giving clients or potential clients access to your network can help them gain confidence in your advice. Always having an “I can help” attitude, even if it doesn’t directly benefit you, will leave a positive effect on people...and could result in more business or a referral one day.

Get Clear

Experts also agree that clear communication goes a long way in keeping clients happy. They say to be upfront from the very moment you meet with clients or potential clients so you can bid in a fair and accurate way. Also, be sure you are completely clear on client expectations and that they are clear on what you can deliver to ensure a united vision. Additionally, using layman’s terms with clients who may not have excessive construction experience can help them understand better and not feel awkward by asking for clarification.

Further, deciding from the start who the point of contact will be on both ends, as well as determining the preferred mode of communication — whether text, email or phone calls — can help avoid ambiguity.

Number One

Thanking remodeling clientsAnother best practice is to treat every client like your most important client. Since satisfied clients are more likely to refer you, it is wise to provide each and every client with your very best service, no matter if they are bringing you the largest payment or the smallest. Just like in life, you never know who people know, and who they may (or may not) refer you to. Not to mention, today’s startup could be tomorrow’s Fortune 500 Company. So provide service accordingly.

Tokens of Appreciation

While offering clients your own company swag — pens, T-shirts, etc. — is a nice way to share your appreciation and get your name out there, it is wise to consider doing more. Sometimes, even the smallest form of a “thank you” is deeply appreciated by clients. Don’t underestimate the power of something as small as a hand-written thank-you card. However, if you’d like to go above and beyond, an unexpected gift delivery at the end of the project or on a holiday can send a bigger message of thanks.

An unexpected delivery can brighten anyone’s day. Perhaps you know that your client is a wine enthusiast or enjoys a good microbrew. As such, a gift delivery with these items offers a personal touch. If you’re unsure of what to send, custom gift baskets full of luxury spa items, gourmet chocolates or sweet treats and cookies are always a safe bet. Beautifully designed and wrapped, FTD gift baskets offer a touch of class and will be something your client is sure to remember and appreciate.

 

Sheryl Coonan

 

Guest Blogger: Sheryl Coonan is a lifestyle, fashion and business writer from metro Detroit.

 

 

Topics: Business Growth, Differentiating your Business, Marketing, Marketing Ideas, Guest Blogs, Building Relationships, Marketing Considerations, Customer Relations

More Work Coming In Than You Can Produce? – Here’s Some Guidance and Advice

Posted by Shawn McCadden on Wed, Apr 27,2016 @ 09:25 AM

More Work Coming In Than You Can Produce? – Here’s Some Guidance and Advice

Increasing production capacity at a remodeling businessThe Joint Center for Housing Studies at Harvard University indicates that the dollars spent on remodeling will increase by 8.6% by the end of 2016.   Most remodelers are already feeling this surge in spending as their backlog of work keeps increasing and at the same time the number of estimates they need to push out is also increasing.  Smart business owners seeing this happening are already increasing their field staff capacity to take advantage of the work.  Adding staff can help get more work done.  However if production efficiency and organization are challenged due to the growth profits can quickly drop. To help these contractors out I have searched out and assembled the list of articles below. Each article is helpful, but collectively they can help identify a plan of action contractors can take to protect the profits they expect to earn by growing their businesses.

A good number of contractors have been contacting me for help in this area.  Most share now that they have more staff they are challenged to properly manage them and the sequence of work. Others report they have come to realize they may have hired the wrong staff.  The solutions to these problems are actually not that difficult to put in place.  What typically gets in the way is not knowing what systems to put in place to support the growth and how to get things started. 

 

Here is one message I got just today, from an employee:

“Hello. I was hired 3 years ago as an estimator. We had 2 carpenters and a super. We now have grown into 7 carpenters, super, production manager and additional secretary. None of our carpenters are "lead carpenters" but about 4 think they are. We are experiencing some growing pains for sure so any input would help. Thanks.”

 

Hiring the right carpenters and production managersSo, 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. If you want help putting things in place at your business feel free to email me.  

But don’t wait too long. This surge in business opportunities for remodelers has also caused a surge in my business.  I too can only help a limited number of qualified customers! 

 

List of articles about growing production capacity at a Remodeling Company:

Options for Managing Production

What’s the Difference Between a Production Manager and a Production Supervisor?

All I want for Christmas… Is a Real Production Manager!

Is He Really a Lead Carpenter?

Key Differences Between Carpenters and Great Lead Carpenters: Part 1

Key Differences Between Carpenters and Great Lead Carpenters: Part 2

Checklist for Implementing the Lead Carpenter System

Considerations for Putting the Right Employee on the Right Job

Help With Evolving From Contractor to Construction Business Owner

 

Topics: New Business Realities, Employee Advancement, Business Growth, Earning More Money, Production Considerations, Lead Carpenter System

What’s the Difference Between a Production Manager and a Production Supervisor?

Posted by Shawn McCadden on Tue, Jan 12,2016 @ 05:30 AM

What’s the Difference Between a Production Manager and a Production Supervisor?

differences between a production manager and a production supervisorAs 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.

 

What is a Production Supervisor?

A Production Supervisor supervises the work to be completed as well as the employees and other workers doing the work.   The key word here is supervises.  

With a Production Supervisor on-staff employees performing the work typically have little authority to make decisions about how the work will be done, who will do what, and in what sequence the work should be performed.   All of those decisions are typically left up to the Production Supervisor.

what is a production supervisorWhen 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 they too would typically be referred to the Production Supervisor.

This method of production management works well if your business relies heavily on subcontractors and or only hires carpenters with little or no project management experience. You might want to think of the production supervisor as sort of a baby sitter of both the job as well as the workforce used to complete the work. If you decide on using a production supervisor be sure to hire employees who are OK with being supervised all the time and are not interested in career advancement.

 

What is a Production Manager?

Unlike a Production Supervisor a Production Manager manages the work and the workers involved in completing projects. The key word here is manages.

With a Production Manager on-staff employees working on the job should have the skills and or be trained to independently follow written work orders. They should also have the skills to make on-the-job decisions about how the work will be done, what equipment is needed, when to order materials to maintain efficiency and what to do when common challenges and discrepancies occur. To facilitate this ability many remodeling companies hire or create real lead carpenters.

lead carpenter system for business owner workshop click here

When subcontractors become involved in the work they are typically managed by the on-site project foreman or the Lead Carpenter. Onsite decisions and discussion about challenges or discrepancies with their contracted work descriptions are commonly solved right at the job site. This can be very cost effective because the Lead Carpenter or foreman is already at the jobsite, saving hours of commuting time and other related costs for the Production Manager.

what is a Production ManagerIf 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.

This method of production management only works well if your business hires and or trains field staff to take on project management responsibilities. You might want to think of the Production Manager as the Production Mentor.  In addition to organizing project schedules and securing the right resources so site employees can be successful, the production manager is also typically responsible to mentor the company’s field staff so he or she isn’t required to supervise at the job site. If you decide on using a Production Manager be sure to hire employees who have the cognitive ability and desire to learn project management skills.

 

Related articles:

Topics: Team Building, Business Growth, Production Considerations, Leadership, Definitions

Resources for Aging Remodelers and Remodelers Serving Seniors

Posted by Shawn McCadden on Tue, Sep 15,2015 @ 06:00 AM

Resources for Aging Remodelers and Remodelers Serving Seniors

aging in place information for remodelersWe 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:

 

  • 90% of seniors want to stay in their own home as they age
  • 60% have made improvements to increase their ability to live independently
  • 49% of seniors want to modify their current homes
  • 38% of seniors want a new, aging in place ready home
  • 27% is the increase businesses see by offering aging in place services

 

I didn’t assemble the links myself.

The links were emailed to me by Patricia Sarmiento who works for Public Health Corps. Their goal as an organization is to provide a hub of reputable and useful public information on health related topics that will empower others to make a difference in their community. According to the web site their mission is simple: Putting the public back into public health.

Public Health Corps Logo

Below is part of her list of helpful and educational resources

Patricia and I invite you to share it with others as you see fit. Share this information in your marketing, on Facebook or Twitter, and at your web site or blog. Use this information to increase your knowledge to better serve seniors. And, if you’re getting close to retirement age, use the information to help prepare your home and yourself for aging in place. Even contractors get old! Don’t you deserve a healthy and comfortable retirement just as much as your clients do?

 

senior aging in place at homeAssisted Living Regulation and Laws
http://www.alfa.org/alfa/ALFA_in_Your_State.asp

Aging in Place
http://ageinplace.com/

Senior-Friendly Home Remodeling
http://www.homeadvisor.com/article.show.Senior-Friendly-Remodeling.8317.html


22 Senior Health Risk Calculators for Healthy Aging
http://www.calculators.org/health/aging.php 

Cats and Seniors
http://www.americanhumane.org/animals/adoption-pet-care/cat-behavior/cats-and-seniors.html 

Canine Caregivers for Alzheimer’s and Dementia Patients
https://www.rover.com/canine-caregivers-dementia-alzheimers/

 
Pets for the Elderly Foundation
http://www.petsfortheelderly.org/

 
Older Adults & Anxiety
http://www.adaa.org/living-with-anxiety/older-adults

 
Heart Attack Quiz
https://www.acls.net/heart-attack.htm

 
National Council for Aging Care
http://www.aginginplace.org/guide-to-recognizing-elder-abuse/

 

 

Topics: Business Growth, Differentiating your Business, Retirement Planning, Design Trends, Statistics, Aging In Place

If One Of These People Asks, Can You Explain How Your Remodeling Company Does Business?

Posted by Shawn McCadden on Mon, Aug 10,2015 @ 01:01 PM

If One Of These People Asks, Can You Explain How Your Remodeling Company Does Business?

How a contractor does businessMost 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 grow past $1M in installed remodeling sales, the list of people below will want and or need to know how you do business.  

Would you be able to explain it to them?  Or will you let them tell you how it will happen?

To grow a successful construction business these people in your path will need to know how you do business: 

Prospects:  
If in the past they have had a bad or good experience with another contractor, savvy remodeling customers already know what worked or didn't work for them and their project. Before they hire you they will want to know how your business operates.
Customers:  
If they have already bought from you without knowing how you do business they may have bought on price and have already assumed how you will do business. It’s probably not the same way you are assuming.
Employees:
lead carpenter system workshop click here If employees don't know how you do business they will be challenged to take on responsibility as the business grows because they will never be able to assume what you want them to do or say at job sites and or with customers.  If they take the risk of doing so, and then you chastise them for what they did, they will probably never take that risk again and or may look for a different job.
Recruits:
Finding good employees these days is challenging.  Finding a real lead carpenter or production manager is near impossible.   Try this example.  You find a real lead carpenter, and while interviewing that candidate starts asking you questions about how your business and your lead carpenter system work. Will they gain confidence in working for you or will they come to realize they should look elsewhere?   Good lead carpenters know what they need from the business and how it should happen so they can actually produce projects on their own, from the job site.  (Check out this Lead Carpenter System Workshop for business owners)
Architects:  
Explaining how you do business to an architectBe 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.
Sub Contractors:
Good trade subs are hard to find. If you find a good one but don't clarify how you do business with your subs before you hire they will likely be telling you what they expect after you are already committed to them.  At that point you may have no other choice than to suck it up if you want to keep your job on schedule and your customer happy.   A lack of clarity and consistency regarding your payment policies is probably the most common reason subs will lose interest in working with you on your next project.
Vendors:
Again, be careful here. Be sure to explain how your sales process works and how you price materials before sending prospects and clients to vendors to pick things out.  By doing so they can become part of your sales team.  If you don't, in a sincere effort to help you, they may actually create problems for you.  Examples might include quoting wholesale prices, giving pricing breakdowns, or suggesting products you prefer not to use.  If the prospect never even shares you sent them there, and you didn't let the vendor know they were coming, the vendor may even recommending a different contractor just so they can be sure to get the sale.

 

Can't explain how you do business?  

Thinking of growing to or past $1M and need a defined way of doing business that works for you?  Consider joining our upcoming Construction Business Owner Peer Group and Education Program.  By participating in the 4-month program you'll get structured education to help you as well as great insight and suggestions from your peers.  

 

Topics: Working with Vendors, Business Management, Recruting, Employee Advancement, Business Growth, Differentiating your Business, Marketing, Marketing Considerations, Prequalifying, Breaking $1Million

Checklist for Getting Ready to Hire Your First Remodeling Salesperson

Posted by Shawn McCadden on Tue, Jun 30,2015 @ 07:00 AM

Checklist for Getting Ready to Hire Your First Remodeling Salesperson

checklist-wrI have been working on the content we will be sharing with the attendees participating in our Construction Business Owner Education and Peer Group Program scheduled to begin in Bedford, MA in September at Middlesex Community College. 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.

 

Contractor’s Checklist: Getting Ready To Hire Your First Remodeling Salesperson

  1. Make sure you already have a Marketing System already in place that generates enough quality leads for you and your new salesperson before you hire.
  2. Make sure you have decided on and have already implemented a Standardized and Documented Sales Process so previous customers and their referrals will enjoy a consistent experience and you can manage your new salesperson’s use of your system.
  3. Make sure you do a budget to determine the Markup and Margin you will need to sell and produce at to cover the cost of your new salesperson as well as the additional business overhead that comes with the changes.
  4. Hire a remodeling salespersonEstablish 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.
  5. Make sure your financial system is setup as needed so you can accurately measure produced gross profit margins on sold jobs. It should also be set up to help you and your new salesperson accurately calculate sales commissions earned.
  6. Make sure you have the ability to perform Estimated to Actual Job Costing so you can be sure jobs are being properly estimated by or for your new sales person. Commission based sales compensations plans are impossible without this ability.
  7. Be clear on who will do the Estimating and how it will and needs to be done (formatted) so your production team gets what they need to build sold jobs on their own.
  8. After you do all of the above write a detailed and clearly explained Job Description for your new salesperson position so you can use it to attract, evaluate and manage your new hire.
  9. Have Quality Audit Forms ready to go that you can use to capture feedback about your new salesperson’s performance from the prospects who do not buy as well as the customers who do buy.
  10. Establish the “Go-No Go Criteria” you will use so you have predetermined how as well as when you will make the absolute decision to keep or replace your new hire.

 

As I indicated above I decided number 10 proved to be the most important consideration after debriefing my learning experiences with hiring a first salesperson. As one sales seminar speaker once quoted at a seminar I attended early in my career:

“Never carry an employee longer than his/her mother did!”

 

 

Topics: Sales, Remodeler Education, Success Strategies, Recruting, Business Growth, Sales Considerations, Breaking $1Million