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Remodelers: Can You Answer These Questions About How You Do Business?

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

Remodelers: Can You Answer These Questions About How You Do Business?

How should a remodeler do business

 

One way I help my clients remodel how they do business is to first get them to actually document how they already do business.  For most they think they know how they do business until I start asking clarifying questions as they attempt to explain.  I did this exercise one time with a $3M+ remodeler and his management staff.  The owner told me before we started how impressed I would be with how they do things and work as a team.  About 30 or so minutes into the meeting he came to realize only he knew how to explain it and none of his staff were on the same page as he.   He then, in a frustrated tone, asked his staff: “How does anyone around here get things done if none of you can explain how we do business?” 

One employee quickly jumped in and said something like: “Well we have to ask you every time and it seems you have a different answer each time so we stopped assuming and decided to just ask every time rather than risk being wrong”.

How a remodeler does businessBelow is a list of considerations regarding how you can do business as a remodeler.  The list starts with an initial inquiry from a prospect and is broken out by typical steps of the process up through wrapping up a remodeling project.  There are lots of things to consider related to each step depending on the type of work you do, who your target customer is and how you do or will decide to do business.  Keep in mind your decisions in each step can or will affect other steps.  Please assume it to be a partial list.  I hope you find the list to be a helpful way for you to get started thinking through how you do business. 

 

Steps related to selling and completing remodeling projects:

  1. Original contact:
    • How will prospects contact your business and then how will your business respond.
    • You will need ways to respond to inquiries from email, Voice Mail, showroom/office drop-ins and or your web site’s contact page.
    • One goal of this step should be to manage prospects’ expectations about what will happen next and when.
  2. Initial phone conversation
    • Who will call the prospect back and when?
    • Should it be a trained gate keeper or the salesperson?
    • What are the purposes of the initial call: for the prospect and for the business?
    • How will the business decide whether to agree to a first sales call?
    • Will your business establish and agree to an agenda and purpose for the meeting before you commit, or will you figure that out when you get to the prospect’s home?
  3. First sales call
    • Will this be at your place of business or the prospects home?
    • Who has to be there besides your business and how will that be decided?
    • How long will the first visit take and why?
  4. Decision time:
    • Remodeling business best practicesWhat does the business need to know about the prospect and their project?
    • Will you have them make a decision about whether your company is a good fit before or after you commit to and invest hours of your time developing an estimate and or proposal?
    • Will you require them to share their decision making process about the project and price before you attempt to get them to make a decision, or will you deal with all that at the same time you are expecting them to make a decision?
  5. Deciding if the prospect and project are qualified and if so for which service the company offers
  6. Design/Preconstruction agreement with a fee or free estimating and proposal generation
  7. Proposal presentation meeting
    • Who has to be there and if not there will you automatically reschedule and take your package with you?
    • Are you expecting a decision at the meeting? If so, what should/will your business do to help them make a decision?
    • If not expecting a decision at the meeting how long is your proposal and price good for?
    • If you charged to prepare the information will it be applied to the project price or is it considered a separate fee and service?
  8. Pre-construction and pre-staging
    • Backordered Stamp-WR.jpgWill you expect all product selections be made before offering a fixed price?
    • Will you schedule the job if there are any open selections to be made?
    • Will you get enough money at deposit to pre-stage the job with required materials, will you use your own money to pre-stage, or will you wait until you start the job to gather the materials?
    • Will you require clients attend and participate at a preconstruction meeting?
  9. Construction
  10. Project wrap-up
    • Is the final payment due on completion or substantial completion (do you know the difference?)
    • Will you allow a punchlist or require a precompletion list?
    • Do you have a process and supporting form you and your customers can use to both agree and confirm the project is complete?
  11. Warranty
    • Best business practices for remodelersWhen does the job end and the warranty begin? (What does your contract say about this now?)
    • Have you clarified warranty responsibilities depending on who provides the materials?
    • Will making the final payment be a condition of doing any warranty work?

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Topics: Business Management, Differentiating your Business, Customer Relations, Business Planning, How You Do Business

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

7 Ways to Use Mobile Technology for Construction

Posted by Shawn McCadden on Wed, Nov 30,2016 @ 05:00 AM

7 Ways to Use Mobile Technology for Construction

Comobile technology for contractorsContractors tend to have a practical approach to their work, and in a competitive market with many moving pieces and complicated projects, investing in the latest technology can help good contractors do their work better. In fact, 75 percent of small to mid-sized construction firms in North America have used a mobile device for work. Like any good tool, using mobile technology can make construction more efficient, accurate and cost-effective. Here’s how:

1. Attract More Clients

Building Information Modeling (BIM) has revolutionized the planning phase of construction, drawing in more clients because owners can understand the design better. This technology is quickly rising in prominence, and with it comes the client’s expectation that the outcome of a construction project will be clear to them from the very beginning. With programs like BIM 360 Glue, contractors and clients with a tablet can see a model come to life before their eyes exactly where they stand in the building.

2. Tracking Workers

Say goodbye to messy timecards, spreadsheets and wondering where your employees are when they say they’re working. With GPS-enabled mobile technology like ClockShark, construction workers can clock in remotely via a smartphone app. Location and hours are logged automatically, and administrators can save time spent managing payroll by at least 50 percent.

Contractors using mobile technology to track equipment3. Tracking Equipment

Rather than digging through piles of equipment or replacing lost items, construction companies around the world now use RFID tags to find misplaced or stolen equipment. High value assets can be tracked remotely, and managers can see in real time where each piece of equipment or tool is located.

4. Increasing Productivity

Mobile technology gives construction professionals the ability to track orders, make phone calls, read emails and solve problems from anywhere. Workers can view client contracts, share blueprints or submit maintenance requests from a tablet. Managers can respond to needs as they arise, saving time and moving the project ahead at a faster rate.

5. Improving Communication

Mobile phones and tablets can be used for photo sharing and video conferencing with clients. Use an app to schedule meetings and sync your mobile calendar with your desktop calendar. Push notifications out to all of your workers when you’re on the job instead of wasting time returning to the office. The new Apple iPhone 7 is equipped with a 12MP wide-angle camera for top-notch photo and video quality and is both water and dust resistant, which can come in handy on a construction site.

6. Lowering Costs

Calculator and reports-WR.jpgStreamline processes with mobile apps and automatic notifications. Virtually eliminate data entry with mobile time clocks and job write ups. Use BIM software or a simple photo sharing strategy to ensure that your work is approved by the client at all times. This improved communication process will result in less reworks, which saves both time and money. That way you can save the company’s bottom line for the really important stuff: getting the job done right.

7. Capture Real-Time Analytics

If equipment, inventory, job progress and workers’ time are all being tracked with a mobile device, then it’s possible to obtain real-time analysis of how all of those moving parts relate to each other. Being able to respond to real-time analytics means that you can achieve great efficiency and more profits that much faster than your competition.

Topics: Technology for Remodelers, Business Management, Earning More Money

To Really Take Advantage of Design/Build Rethink What You know as Normal

Posted by Shawn McCadden on Fri, Jun 03,2016 @ 05:00 AM

Design/Build Coaching

 

A lot of remodelers have contacted me recently looking for help with Design/Build.  Unfortunately many think they are doing or claim to be doing Design/Build, but they are not.  I know this because I know what Design/Build is, how to market it, how to sell it and how to manage it.  I find it sad to see how many hours and dollars are lost and wasted by contractors trying to figure out how to do Design/Build.  Worse, many pretend to be Design/Builders and actually have no idea what they are missing out on through their ignorance.

I find too many contractors pretending to do Design/Build lack the skills and experience to do it right.   Unfortunately their lack of knowledge coupled with their decision and or stubbornness to figure things out on their own leads to them to repeat the same mistakes so many other remodelers made before them.

I suggest there is always more than one way to do things.  I also know that the many things you are concerned about changing were things that I found were holding back my company and our ability to attract the right clients and project types for Design/Build.  I too was hesitant and said no one would pay that much to design and estimate, and pay for it in full up-front.  I also said people would not give up bidding.   I also said they would never go for Design/Build if they could not have the plans unless they also contracted for the construction. 

 

I was wrong and I was really glad I found out I was wrong.

Evolving to Design/BuildYes, becoming a real Design/Builder will be an evolution of change, if you are willing and able to commit to making the changes. The changes will not be easy and will require getting out of your current comfort zone to gain new experiences and results.

In the beginning selling real Design/Build will be challenging.   If you do it right you will come to trust Design/Build and so will your clients.   Here is what one of my clients shared:

“Shawn McCadden is the best business mentor and coach I have ever met.  He has a special talent for getting right to the heart of an issue, helping you find the solution that is right for your situation and then helping you implement the solution and monitor it.  His communication skills enable him to relate to a wide variety of people in ways that make his message interesting, understandable and memorable.  I have called on Shawn many times to help me through situations and am always glad I did.”

Selling Design/BuildTrust is earned.   If you do Design/Build well with some clients they will come to trust you and will then let those they refer you to know you and your process can be trusted.

Just remember there are plenty of contractors already doing the things you are challenged to consider doing.  Once I discovered that fact I knew I could do it too.

 

 

Topics: Business Management, Design/Build Process, Building Relationships, Opinions from Design/Builders, Creating Referrals

8 Unique Ways Mobile Technology Helps Contractors on the Job

Posted by Shawn McCadden on Tue, May 24,2016 @ 08:33 AM

technology options for contractors

Contractors are joining the ranks of workers who bring their own devices to the workplace. A Texas A&M survey found that 72 percent of professional contractors now use smartphones such as the Samsung Galaxy S7 Edge at work, while 53.9 percent use laptops and 50.1 percent use tablets.

Mobile devices are assisting contractors in virtually every phase of construction, from finding clients and managing projects to making estimates and bookkeeping. Here are some of the top ways mobile technology is helping contractors on the job.

Customer Relationship Management

Any construction job starts with a client, and customer relationship management tools such as Improveit 360 make it easier to find and manage clients. The Improveit 360 app is especially designed with the needs of contractors, remodelers and home pros in mind. It includes tools for:

  • Phone and email marketing
  • Centralizing your incoming lead database
  • Tracking and managing leads
  • Preventing duplicate leads
  • Appointment scheduling
  • Sales

 

Invitations to Bid

apps for contractorsThe bidding process is a big part of landing clients, and bid invitation apps like SmartBidNet are designed to make it easier for you to win projects. SmartBidNet provides a communications dashboard, where you can send, receive and monitor your invitations to bid. The app includes templates to help you:

  • Formulate and start the draft bid process
  • Customize subcontractor access options
  • Share calendars to manage bid deadlines

 

Estimating

Estimating is one of the most important and time-consuming parts of the bidding process. Construction calculator apps like BuildCalc make estimating easier by providing a spreadsheet-style layout, where you can enter and calculate bid data. BuildCalc comes with design layouts for different parts of a building to help you develop details of your estimate, material estimation tools and quick conversion tools for distance, area, volume, weight and angles.

 

Building Information Modeling

With today's technology, digital building information modeling is the most efficient and least expensive way to plan projects. The Autodesk app allows you to do BIM from your mobile device. The app also helps you build more efficiently and cost-effectively by letting you create 3-D models of your building projects that you can rotate and even animate.

 

Project Management

Once you start a construction project, use your smartphone to manage it through an app like Fieldwire, which is designed to assist construction managers and workers in the field. Fieldwire enables you to:

  • Pull up blueprints
  • Share files with your crew
  • Create and assign tasks
  • Track issues using photos from the field
  • Receive notifications when tasks are updated

 

Safety

osha_logo-wr.jpgSafety comes first on any project. From a technology standpoint, the Safety Meeting app makes it easier for contractors to comply with OSHA safety meeting regulations. Safety Meeting allows you to:

  • Schedule meetings
  • Pull up safety meeting topics
  • Document meetings
  • Receive incident and near miss reports

 

Field Data Collection

The success of any construction project depends on accurate data collection, and field data apps like Canvas make it easier for you to collect the information you need. In addition, Canvas lets you:

  • Create and fill out forms
  • Capture photos
  • Obtain GPS coordinates
  • Perform calculations
  • Send emails and files to crew members

 

Accounting

QuickBooks for contractorsBookkeeping is a necessary chore for any contractor, and accounting apps like QuickBooks Online take much of the labor out of bookkeeping by letting you automate the most repetitive and tedious bookkeeping tasks. Use your mobile device and let QuickBooks Online:

  • Manage your cash flow
  • Send invoices
  • Accept payments
  • Scan receipts
  • Make and record deposits
  • Pay bills and expenses
  • Create monthly statements
  • Print or email reports
  • Export data into tax preparation software

 

Topics: Technology for Remodelers, Business Management, Customer Relations

Is Using 1099 Construction Workers Worth The Risk?

Posted by Shawn McCadden on Fri, Sep 25,2015 @ 08:03 AM

Is It Worth It To Risk Using 1099 Workers To Avoid Employee Responsibilities?

1099 construction workersMany contractors are using what are refer to as 1099 workers to avoid employee and payroll related administrative responsibilities and financial costs.  Some use this tactic to reduce their costs to help win bids and or make more money. If you never get caught you may feel or believe it was worth it. On the other hand if you get caught, whether you knew what you were doing was illegal or you really believed what you were doing was OK, the financial and litigation related costs can kill your business. The chance of this happening has dramatically increased in certain areas of the country because Washington is offering money to states to help them do so. Read on to find out about what is already happening in Virginia.

In a well written article written by Courtney Malveaux of Thompson McMullan PC, Courtney shares a scary story where a GC jobsite is inspected by VA’s version of OSHA and makes and on-site determination that certain “Independent Contractors” were actually employees, triggering the automatic loss of any ability to negotiate violation penalty reductions. The story gets much scarier as you read on; I suggest you read the whole article.

 

“Under the new policy, if the inspector declares that your contractors should be considered employees, watch out.  You’re paying full freight on each penalty, without exception.  Your only recourse would be legal action.” Courtney Malveaux

Guilty until proven innocent

The part I found most scary in the story was that the contractors who take this risk, for whatever reason they justify doing so, are automatically assumed to be guilty by the inspectors.   If that happens to you it means you are guilty until proven innocent, at your own expense to try to do so. And, even if you eventually win your legal battle, you are not entitled to receive any damages for your challenges. So your legal fees cannot be recouped.

Risk of using 1099 construction workersThat means you have to pay up on any fines, at their full rate (anywhere from $7K to 70K per violation) right away. Then you have to decide if you are willing to wait for your legal case to make it through a legal system sponsored by the same entity that is accusing your business.

 

Collateral damages may be unavoidable

From what I have witness I know the story can go even further than explained in the article. For example if the 1099’s are deemed to be employees you may also become responsible for all employment related taxes on all the money you have paid to them to date, plus fines of course. The same may happen with Workers Compensation and General Liability insurance coverage. Again the likelihood of these things happening has also become more likely. For example in Massachusetts several different state departments are participating in a memorandum of understanding, committing to refer observed violators discovered by each department to the other departments. In a 2012 article I reported on how OSHA and EPA have done the same regarding RRP Inspections.

 

1099 or employee

The Bottom Line

As a business owner only you can decide the level of risk you are willing to take on by avoiding employment responsibilities. I recognize by doing so you may be saving your business and your customers money. At the same time by doing so perhaps both of you are preventing a worker, or many workers, from having the employment rights and benefits your customers expect and even demand at their jobs. Some know they are doing it. Some, I hope, just found out.

 

Topics: New Business Realities, Legal Related, Business Management, Production Considerations, OSHA Considerations, Subcontractor Considerations, Government Regulations, OSHA - EPA Challenges, Workers Compensation, Taxes

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:
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.
 

 

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

What Happened When I Stopped Providing Free Estimates

Posted by Shawn McCadden on Sun, Jun 28,2015 @ 07:00 AM

Guest Blog: What Happened When I Stopped Providing Free Estimates

Mouse_trap_free_bait-wrIf you are still running free estimates and playing a numbers game of leads to appointments to sales then I have something valuable to share. In the past I believed that if I did not actively pursue new clients, and provide free estimates, I would have no income. It was a numbers game; 5 leads - 3 appointments  -1 sale. Sound familiar? In this article I share my lesson in letting go; finding the faith to trust a system to qualify prospects, and the positive impact it can make for your business as well as your cash flow.

 

How I discovered the solution that worked for me

For me, it was getting increasingly difficult to find and schedule client meetings with my increasing responsibilities of being a Mom with a terminal illness. Running from lead to lead was taking up the time I needed to run my business and finish the contracts that we already had in the pipeline. Holding on to how I always did things was holding us back. I needed a temporary solution to what was a temporary situation.

Then, one late fall morning while catching up with reading emails and industry updates, I came upon an article about a remodeling business joining with another remodeling business to create a winning partnership.

Inspired by that article I decided that if I could temporarily give up running the leads to create the sales opportunity I would then be able to concentrate on design, closing the deal and project execution.   Doing so would be the temporary solution I needed to solve my current challenges. It worked. I found a design firm with a great front end sales system and at the same time was struggling with project management and finding responsive sub contractors. And, fortunately there would be no conflict, as they only needed to temporarily fill this need as they were relocating out of the area in six months, one year max. It was a good fit, they were looking to hire a per contract designer/project manager. The fact that I already had a top notch construction team in place sealed the deal.

 

The results

How contractors can stop giving free estimatesAs a result of that temporary relationship I learned how to create a trained support staff at my own business and secured steady work for my team. By learning how to use and sell paid consultations our leads turned into project development retainers which then turned into profitable construction contracts. That temporary relationship was also a big success for the partnering firm; they had a record earning year and made a lot of money.

When I stepped out of my business and worked within a sales process for another firm it forced me to stop chasing down those leads that after too much investment of my time proved to be unqualified. As an owner, I would not have had the faith that charging for estimates would actually provide a constant flow of better customers. I was too invested in my previous training and experience as a sales person. I was dead wrong.

 

The change was an emotional one; here is how I did it

First I had to stop thinking of my role as being an in-home salesperson. Second, I had to better and fully understand why our clients were actually hiring us.  Finally, I had to set up a marketing and sales system that could drive value and was not contingent upon my making it through the prospect’s front door to get the “opportunity to do an estimate".

 

Here are the steps I took and worked for me:

Step 1. I optimize my online profiles to convey value; value to my target prospects.
Step 2. We made it easy to see reviews and then contact us.
Step 3. The first phone call replaced the in-home appointment.
Step 4. We added “homework" for the prospect to do and the use of a “paid consultation"
Step 5. We offered prospects a retainer to act as their very own personal consultant and helped them develop “their project”.

 

The result of adopting this system has been life changing

How to stop giving free estimatesI no longer run around from appointment to appointment. I now have the time to focus on creating more ways to provide paying prospects with value early in the process. Our business is running with more consistency and cash flow has increased. For every consultation I go on now we have a 70% close rate to a full construction contract, a 20% conversion to a design/material contract and about 10% of our prospects don’t move forward.  

Since returning to concentrate in full on my business and my new sales role gross sales have increased over the last twelve months by more than 75%. This is because we now focus on our ideal client. We actively seek clients that have budgets that match our business model and refer the other prospects to contractors that are better suited for them. Cash flow problems have all but disappeared.

It starts with faith. It took trusting a system, knowing who our client is, and having the time to create opportunities to provide value.

 

Cynthia MurphyGuest Blogger: Cynthia Murphy, CKBR, is a Certified Kitchen and Bath Remodeler and co-owner of Murphy’s Design, LLC. She operates a Design Studio in Fairfax Virginia. She will be launching her blog called “Home Design Labs” in June and hosting an industry specific interview podcast called “The Social Home Pro” this summer on iTunes and Stitcher radio. If you would like to connect with Cynthia you can contact her via her website, blog or you can email her at cynthia@murphysdesignllc.com.


Topics: Business Management, Estimating, Differentiating your Business, Earning More Money, Lead Generation, Guest Blogs, Prequalifying, Opinions from Contractors, Estimating Considerations, Customer Relations

Checklist: Is Your Remodeling Business at Risk of Becoming Mediocre?

Posted by Shawn McCadden on Thu, May 21,2015 @ 10:12 AM

Checklist: Is Your Remodeling Business at Risk of Becoming Mediocre?

Improving a remodeling businessAs you grow your business day to day management and leadership considerations can quickly creep up on construction business owners.  Profitably growing a remodeling business to any volume, but in particular growing past the $1M threshold in produced work, definitely requires advanced business skills.   Growing and running your business by the seat of your pants is a sure way to create a mediocre business that will never generate maximum profits. This article offers several ways business owners can determine if they and their businesses are headed for mediocrity.  It also offers options to help you and your business get back on track.

 

Mediocrity Definition

 

Here is a checklist of indicators that your business is becoming mediocre:

  • Your business lacks written policies and procedures.
  • Even if you have policies you do not have predetermined consequences for violating them and or you do not enforce them.
  • You complain about things customers and or employees do or don't do; but then do nothing about them.
  • Concerned employees point certain concerning things out and you do nothing to address and or correct things.
  • Your employees point things out to you and you actually make them feel guilty for doing so or that they are annoying you by pointing them out.
  • Your customers offer feedback or complaints and you make excuses for why things happened, rather than embrace their help and use what they share with you to make improvements or corrections.
  • Long term customers stop doing business with you and you don’t bother to ask them why.
  • You create artificial harmony by ignoring culture deficiencies and or tension between team members and pretend everything is OK.
  • When something happens you always find a way to make it someone else's fault rather than take responsibility as the leader.

 

If these things are happening at your business you have two options

Construction employee complaintThe first is to let them keep happening.   If you allow things to continue you will likely lose customers, compromise your brand, have high employee turnover and you will never fully achieve creating a successful and profitable business.   Eventually, when your family and others ask you why you never really succeeded in business, you will again have to resort to rationalizing why it was someone else's fault.

Your other option is to recognize these things are happening and start addressing why they are happening.  Only until you know and recognize why they are happening will you be able to work on preventing them from happening.  

 

Preventing these things from happening may require two different solutions

The first is to stop certain things from happening all together by no longer tolerating them.   Put your big boy or girl pants on and be the leader you should be.   To hold others accountable make sure you create and follow through on consequences.

The other is to change how you do things so they just don't happen anymore.  Put policies in place and make sure they are enforced.   Those policies should also include clear consequences for violating them.

Lots of remodeling businesses are becoming mediocre as they try to grow in this improving economy. Will you join them or will you stand out from the crowd by becoming the reference standard for what it means to be a professional contractor in your marketplace?

 

Topics: Employee Relations, Business Management, Success Strategies, Business Growth, Sage Advice, Business Considerations, Breaking $1Million

Want To Sell Your Construction Business Someday- Consider These Buyer Types Today

Posted by Shawn McCadden on Fri, Mar 27,2015 @ 06:30 AM

Want To Sell Your Construction Business Someday- Consider These Buyer Types Today


Buyer types for a residential construction businessIn a previous blog about selling your construction business I had suggested business owners write a for sale ad describing the business they plan to sell in the future. In this blog I describe the two typical construction business buyer types that became obvious to me as I worked towards selling my business.  By considering your target buyer you can make better decisions about what to do and put in place as you build your business to get it ready to sell.

 

First is the investor. 

This person will want to buy a business that pretty much runs on its own, needing little hands-on attention from the buyer. This buyer will be looking for time tested systems and industry best practices already in place and well documented.  This buyer will also be looking for a business that already has technology and software in place to proactively predict and measure business activities.  This buyer will also be looking to keep most or all of the existing employees in place. To attract this buyer type make sure you assemble a great team of high performing and self directed employees who work well together and embrace the systems and technology you will put in place.

finding a buyer for a remodeling businessThis investor buyer will need a leader/manager to run the company. Before offering your business for sale to this buyer type I suggest you transfer the leadership and the day to day management of your business to a well qualified employee over a period of time. During the evolution you can test and prove his/her effectiveness as a general manager in advance of selling.  By taking adequate time to accomplish this important consideration at my business both me and my employees felt good about and respected the new leader, before I fully transitioned out of the day to day.

Some key advantages of selling to an investor can include a high selling price assuming you have a great business with future growth potential.  And, this buyer will also have the funds or can get his/her own financing for the purchase. My experience proved this could be a great way to go, but due to the reputation of our industry, the pool of potential buyers was very limited. I think this is still true today, but may not be the case in the future.

The second type of buyer will be the owner operator. 

Likely an entrepreneur, this type of buyer will want to take over an existing business and jump right in physically working in the business.  This buyer will want to see steady profits and a strong customer list, but as an entrepreneur with energy to burn will also be looking for growth potential

buyers for a remodeling businessHaving systems and employees in place will be important, but you might want to assume that this buyer will likely change or evolve the systems you have put in place.  As a result the employees described above might not like and/or agree with the changes. In particular experienced management employees may not tolerate any loss of the independence they have already earned in performing their day to day roles. If you plan to sell to this type of a buyer, I suggest you assemble employees who desire to follow a leader and will go with the flow. 

Also consider selling to this type of buyer will not command as high a price when you sell. On the other hand you will likely find more potential buyers because of the lower price.

 

The best of both worlds?

The sale of my business was in several ways a hybrid of the two models described above. I ultimately sold to my general manger. He had already earned the leadership role and had participated for many years in the direction, growth and day to day management of the business. All of the practical experience he gained during that evolution prepared him to be a well trained, experienced and motivated candidate to buy and continue growing the business. To make the purchase practical I had to finance the sale. In my case I felt financing the purchase was worth the risk because the buyer had proven his competency, trustworthiness and ability to not only maintain the business, but also grow it in a strategic and manageable way.Subscribe to the Design/Builders Blog

 

Topics: Business Management, Success Strategies, Differentiating your Business, Retirement Planning, Business Planning, Selling your Business