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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

Contractors Are You Sure You Are Working With The Right Vendors?

Posted by Shawn McCadden on Sun, May 19,2013 @ 11:02 AM

The Marketplace is Improving; Are You Sure You Are Working With The Right Vendors?

Building product supply and demand

The marketplace seems to be picking up for contractors.  Many are reporting increased leads and sales.  With increased demand for the products contractors need to build their projects we will definitely see supply and demand challenges with local lumberyards, the big boxes and specialty product vendors.  This supply and demand challenge is one of the reasons many in the construction industry are predicting as much as a 25% increase in cost on many building products.  Although contractors need to be aware of these increases as they price their projects, I suggest they also need to make sure the vendors and suppliers they purchase their materials and products from will be prepared for the increased demand.

If you are a contractor who has been buying on price from vendors who have been selling on low price to get your business, you might want to think twice.   If that vendor has a good business, low or no debt and is using efficient business systems and technology to keep their costs low, you may be OK.  But if your vendor has very high debt, has cut back on staffing, equipment and service, just so they could sell at low prices, their business may not be prepared for a surge in sales as the economy improves.


Choosing and keeping the right building product dealers for your business and your customers

Here are some things to think about regarding the vendors you are currently using.  This same list can also help you decide which vendor or vendors you should work with going forward:

    • Many lumberyards and specialty dealers are short staffed.   To save money and to stay in business many of these businesses have reduced staff during the recession and often times the people they let go were the higher paid employees.   If this is a tactic any of your suppliers used they may have let go many of their most knowledgeable staff.   The remaining staff, often less skilled and far less knowledgeable about building products, construction and contractors, will be challenged to serve contractors as the number of contractors doing work and buying materials picks up.
    • Lumber supply and demandBuilding product suppliers who have high debt may not be able to finance the cost of increasing their inventories to keep up with the predicted supply and demand challenges as the economy improves.   If this happens at your supplier you may find that many products, even common commodities like framing lumber, will be out of stock.  Imagine going to the lumberyard first thing in the morning to get the materials you need to frame a deck or reframe that kitchen, only to find out you can’t get what you need.  To keep working that day you might have to pay for longer lengths than you need, or might even have to drive to a different supplier in the hopes that they will have what you need so you can work that day.  Remember, if you lose two hours chasing materials, in reality you also lost two hours of productive time on the job.   That would mean you lost a total of four hours you could have billed your client for if the materials were already at the jobsite.
    • Choosing building product vendorsLumber and building materials dealers who cut back on staff may also be challenged to help you sell to your customers.   If you had a customer who wanted to see the door, cabinets or windows you recommend, will you be able to send them down to your local supplier to see the products they are looking for?  What is the condition of the showroom?  Is there going to be anyone there to make and take the time to meet with and help your customer?   Will the person working at that dealer have the sales skills, product knowledge and knowledge about you and your business to help you make the sale?

 

The risks of low price

Selling on low price typically puts any business on a path to failure.  Sure, it may seem to help things at first when money gets tight.  However, unless they can ramp up their businesses, and do so before the market place improves, they will be forced to play a game of keep up and catch up as their customers’ needs and demands for products and service increases.   Working with a low price vendor might seem attractive, but can you be confident they will have what you need when you needed it?   If they require a deposit on special order items, are you confident they will still be in business by the time you expect delivery of what you ordered?   What will your customers think of you and your business if their project start date gets delayed and or the completion date gets extended because you can’t get what you need from your vendors to keep their project and your business on schedule?


Summary

Low price LBM dealers

 

Choosing the wrong vendors by saving a few bucks on materials may cost you and your construction business lots of wasted time, money and the valuable referrals your business has enjoyed from what used to be happy customers.  I highly recommend you choose your vendors wisely!



Topics: New Business Realities, Working with Vendors, LBM Related Topics, LBM Dealer Topics, Business Growth, Production Considerations, Building Relationships, Customer Relations, Keeping More Money, Sage Advice, Shawn's Predictions

Help For LBM Dealers Planning Contractor Education Events

Posted by Shawn McCadden on Tue, Apr 02,2013 @ 06:00 AM

Free Webinar: Help For LBM Dealers Planning Contractor Education Events

One big win-win for building material dealers and their contractor customers is offering contractor education.  By helping contractors improve their businesses, and advance the trade skills of their employees, contractors can do more business and improve profitability.   If the contractor can increase the amount of business he or she does, the supplier benefits as well because that contractor will likely need to buy more products and services from the dealer.  Helping contractors grow their business is also a great way for LBM dealers to initiate and expand upon the creation of mutually beneficial relationships with their contractor customers.

Planning a contractor Training Event

For suppliers and manufacturers, planning a successful educational event for contractors takes a lot of work and time.   Many factors go into planning, promoting and executing an event that will provide value for the attendees, the dealer as well as any event sponsors.  However, if planned and executed correctly, educational events for contractors will not only attract attendees for the first time, the events should also make attendees want to keep coming back for more!


planning a training event for contractors

If you are a LBM dealer thinking about holding your first educational event, or want to improve results at your next event, consider attending an upcoming webinar I will be presenting on April 11th, 2013 titled “Planning and Delivering Educational Events to Maximize Your ROI”  The webinar will be hosted by BuilderLink.

 Click here now to register for the webinar

Webinar for LBM Dealers

 

If you are a contractor looking to encourage educational events at your lumberyard or supplier, consider forwarding this article to them.  By attending the webinar dealers and their staff can learn how to plan a great event, choose topics and speakers that will help you grow your business, and make sure the event will be fun and entertaining to attend.

 

Here’s a partial list of how attendees will benefit by attending this webinar

  • Learn some creative ways to promote the event, attract contractor attendees and get them to show up!
  • We will explore seminar topic ideas that can be beneficial and profitable for the contractors as well as the dealer.
  • Learn several very important things to consider before choosing a presenter/speaker.
  • Learn several ways to maximize the investment for the dealer and sponsor(s); before, during and after the event.

 

Speaker for contractor education event

Other LBM Dealer Related Articles:

Lumberyard Ambassadors - Partnering With A Lumber Dealer’s Yard Staff

Understanding and Selling the Many Shades of Green

 

 

Topics: Remodeler Education, Contractor Training, Working with Vendors, LBM Dealer Topics, Success Strategies, Worker Training, Differentiating your Business

Lumberyard Ambassadors - Partnering With A Lumber Dealer’s Yard Staff

Posted by Shawn McCadden on Fri, Jan 18,2013 @ 10:54 AM

Lumberyard Ambassadors - Partnering With A Lumber Dealer’s Yard Staff

Lumberyard Staff Training

 

 

Several recent surveys and polls indicate that contractors, when they have more than one option to consider, put a lot of weight on relationships when they share why they choose one lumber yard or supply house over another. Let’s face it, whether shopping at a lumber yard or at your local grocery store, when you enjoy some type of positive and mutually beneficial relationship with the employees representing that business you become much more motivated to stick with that business and even refer others to that business.   Good lumber dealers know this and make it a priority to offer training and mentoring for their employees.

Seminar for Yard StaffEarlier this week I presented a webinar hosted by The Northeast Retail Lumber Association (NRLA) and sponsored by The Lumber and Building Material Dealers Foundation (LBMDF).  LBMDF supports and advances the educational and charitable programs of the NRLA.  The webinar was for lumber dealers’ yard staff.  The purpose of the webinar was to help yard staff see and take advantage of how their efforts can help the lumber dealer they work for, the contractors they serve, as well as the yard staff employees themselves. I like to refer to them and hope they see themselves as “Lumberyard Ambassadors”

During the webinar I asked the attendees to share their suggestions for how contractors could help them do their jobs better and make their jobs more enjoyable when doing so. 

 

Here are some of the suggestions they had to offer and some of my thoughts as well

Yard Employee TrainingAs a contractor please don't come in with a bad attitude.

This one can go both ways.  Actually, it was also on my list of pet peeves to share with the attendees!  Contractors and yard staff can both have legitimate reasons to be in a bad mood.  However, it doesn’t mean that bad moods need to be shared or demonstrated by either party.  As professionals we all need to control our emotions.   Plus, if you let your bad mood effect how you interact with lumber yard staff, they might just be inclined to return the “favor” the next time you’re in the yard.

 

Better planning by contractors. When we have to go out multiple times to one jobsite it costs us time, when we could just go there once.

Lumber Yard employee trainingI shared with the attendees that this was one of those things I have been working on for years; trying to help contractors and their employees improve their processes and even use checklists to help make sure everything is on the job site before it is needed.  Here’s the thing; making multiple trips cost both the contractor and the lumber dealer money that could be better invested elsewhere.  Plus, if as a contractor your employees aren’t smart enough or don’t care enough to plan ahead, it might be time to find new employees who can and will plan ahead.  If you or your employees need training to help curb this problem, consider attending this production workshop.

 

My drivers need good directions from the contractors; many times the contractor isn't very helpful.

Yard staff webinarAgain, I think this is one that both the lumber dealer and the contractor can share responsibility in.  Whoever takes the order at the yard needs to ask for directions and should also probably make a point of always asking if there is anything they should know that would help the driver find the right location for the delivery.  At the same time I think contractors should also be proactive by speaking up and offering advice if they know their job site is difficult to find or access.   Posting a job sign in a visible location could be helpful.  Also, if there’s no room to turn around to strategically drop a load where you want it, why not suggest that the driver back in from the street when you’re placing your order.

Bottom Line

By fostering a good working relationship, contractors and lumber dealers’ yard staff employees can both make their jobs and their day much more enjoyable.   And keep in mind; each has an opportunity to set the example for their peers.  Many thanks to the webinar attendees for sharing their thoughts!

 

Have a suggestion to add to the discussion?  Please share it by leaving a comment below.

 

 

Topics: Working with Vendors, LBM Related Topics, Production Considerations, Building Relationships

You Need a Target Before You Can Target Your Marketing

Posted by Shawn McCadden on Sun, Dec 23,2012 @ 06:00 AM

You Need a Target Before You Can Target Your Marketing

Target Customer for remodelers

 

Recently three of my consulting/coaching clients have started the process of updating their web sites.   All three of them had sites that were created several years back and have since sat on the web with few if any changes, updates or the addition on any new content. Only one had a blog. All three of them also came to realize that prospects were not finding their sites via search engines.   However those prospects were going to their sites to find out more about the remodelers after they already had a first meeting and became aware there was a web site to look at. As a result of my questions and little follow-up discussion with their prospects these remodelers came to realize they essentially had static on-line brochures that offered little to differentiate their businesses from other remodeling businesses. And, they also learned that their sites did not attract prospects or help them move them along to a decision during the sales process.

targeting remodeling customersI’m sure this story is true for many remodelers. If you’re one of them and you’re tired of never ending sales cycles, having to sell on price, working for people you’d rather say no to and you can’t seem to generate enough volume and or gross profit to have a healthy business; it’s time to decide who you want to target for prospects and start strategically marketing so they can find you and so you can convert them into customers.

 

Think of it like this 

The target below offers a shooter points no matter where the bullets land, as long as they land on the paper.  However, if the bullets land in the center the shooter will get far more points than if they hit somewhere around the perimeter.  The goal for the shooter should be to calibrate his or her weapon and then properly aim so the bullets hit the center each time.   The same holds true for remodelers.  If your margins are low because you’re not hitting the paper, or if you are and you’re only getting low scores, it’s not the targets fault and it’s not the weapon’s fault, it’s the shooter who needs to make the adjustments.

target customers for remodelers

 

Need help?

Remodeling customer demographicsOne resource remodelers can take advantage of for help with better targeting is their vendors.  Vendors who carry well known product brands know which demographic of customers buy different products based on their quality, benefits and related cost.   They also typically get support in this area from the product manufacturers and distributors they do business with.   If you establish a relationship with a good vendor who offers marketing help and support, it can be like having a whole team of marketing experts working on helping you find more and better customers.   The great part about it is that helping the remodeler helps the vendor, the distributor and the manufacturer all at the same time.  When something gets sold everyone one wins!

Recently I had a discussion about this topic with Marshall Baser, Business Development Manager for AW Hastings in Enfield CT.   Hastings is a distributer that specializes in the Marvin Window and Door brands.  Marshall and his team work with the vendors they supply to help remodelers and replacement contractors improve their businesses and therefore sell more.   One way they do so is to help contractors better target their marketing to the right prospects for the different price points of windows Marvin offers.  In addition to help with strategy, Hastings also helps vendors and remodelers attract quality leads through joint advertising that highlights the remodeler, the dealer and the products. If that has you excited you’ll love the fact that Hastings and their vendor partners typically share the cost of the advertising with the remodelers they work with. 

Marketing strategies for remodelersReady for the new normal?

Being successful and profitable as a remodeler is and will be different as we eventually enter into an improved economy with new and changing customer demographics.  Smaller remodeling businesses with fewer resources need to find ways to gain an edge in the marketplace.  I think Marshall summed it up really well for these businesses when he shared this advice:  "Contractors should consider aligning themselves with retail suppliers who truly understand them and their business.  They should get to know each other well, and create a strong business partnership with one another.  A quality retailer can be a tremendous resource helping the contractor improve their overall business volume and profitability through the products that they sell, as well as through the value added services that they offer, including targeting the right prospects for those products."

 

Topics: Working with Vendors, Sales Considerations, Differentiating your Business, Marketing, Mentoring/Coaching, Business Planning