When to Implement The Lead Carpenter System?
By Shawn McCadden
Certified Remodeler, Certified Lead Carpenter
Many contractors have asked me what volume of sales they should achieve before they implement the Lead Carpenter System. Like many other business decisions, it depends upon the reason you want to do it, but it also depends upon the company and the current condition of that company’s business systems. Without that information, answering the question based on assumptions could lead to disaster. Unless you and your company are properly prepared, failure of the Lead Carpenter System might be blamed on the system itself, rather than the business systems that are required to support it. The key is to adjust your business practices to support a true Lead Carpenter System, not adjust the lead Carpenter System to work within your existing business systems.
Get Your Support Systems Ready
Typically, as a professional remodeling company grows, it must constantly change and improve its business systems and procedures. To be successful requires the attention and awareness of the business owner or manager in keeping up with the anticipated and unforeseen realities of that growth. Some systems may become inadequate if they were designed to serve the old company’s way of doing business. These systems can occasionally be modified, but in most cases they require complete replacement or drastic re-design.
Some systems may not yet exist within the business and may become new requirements to successfully support growth. For most companies, the challenge is to be proactive about the changes so you can be prepared. Unfortunately, too many companies grow faster than the owner’s ability, vision or sometimes commitment to be prepared for the growth.
In reactive mode, it is difficult to find the time to create and implement the changes. Too much time is spent putting out the fires and dealing with the problems created due to the lack of that preplanning.
Think Profit Before Volume!
I don’t believe the decision to implement a lead carpenter system should be based on current volume, but do agree it is often the reason companies finally decide to do so. An overwhelming backlog of work and/or low profit seems to generate a desire to finally do something about how the actual work is produced. A better reason is to achieve a greater volume at a higher profit, right away! I suggest you implement the system to improve the efficiency and profitability at your current volume, regardless of what it is, before you plan to grow.
It could take a year or two to implement, but your patience might be rewarded in a variety of ways. During implementation at my company, I discovered four great reasons to use this approach.
- First, you will be making more money doing the same amount of work you’re already able to complete. (Perhaps, after discovering this option, you’ll decide not to increase volume!)
- Second, you’ll have the opportunity to save that money as a way of financing the planned growth.
- Third, you will be prepared for quick growth without sacrificing profit.
- Fourth, if your system is in place and tested, you will have more time to deal with the other issues related to growth.
When Will It Pay Off In Personal And Financial Benefits?
Use of the “already tested” system at my company increased our 1996 sales volume of $980,000 with a total of 8 office and field employees to a 2000 sales volume of $1,700,000 with still only 8 employees. During this time net profit margins remained the same 10% plus each year. The Lead Carpenter System is one of the many co-dependent systems that were implemented to prepare for growth, accomplish that growth, and to this day continues to support the current company structure for the new owner. Although every other business system we used was important and needed, next to our sales system, perhaps the best choice of systems to implement was the Lead Carpenter System for our production needs.
True use of the system shifts most of the project management directly to the lead in the field. The bonus to this plan at my company was the fact that I was no longer involved as an employee, and had the time and energy to pursue other interests.
Best Time to Implement
Overall, my best answer is to implement when you start your company. Initiating the company using the Lead Carpenter System allows the system to grow with the company, and when done well, the company grows because of the system. If the business owner understands and is committed to the Lead Carpenter concept before he/she opens the business, all of the other systems required of that business will somehow be influenced by and incorporate considerations to support lead carpenters.
My observation is that by operating in this manner, the system can evolve by default. Because it’s the only system being used right from the start, every success and failure can contribute to correcting or reinforcing your plan. If you’re working for another company and thinking about busting out on your own, you could take advantage of this option. Unfortunately, particularly for many of you who might be reading this article, this is not an option because you have already been in business for some time. If you think back about how your business got started, don’t you wish you started the Lead Carpenter System then?
Never Stop Implementing
Implementation of the system is an ongoing effort. Even if your system is the best you have observed in the industry, there is always room and the need for improvement. Products and building codes change, clients and subs come and go; the economy and demand for remodeling can swing very quickly.
Make it a point to have all employees observe the performance of the system and then share their opinions and suggestions. Your supporting business systems should provide you with the historic information needed to qualify the performance of your plan as well as your options for improvements.
Discuss those options with other remodelers you respect. Perhaps, as in my case, as you step back from the day-to-day operations of the business, your employees will become responsible for identifying and implementing changes.