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Business Success Quiz
The following is the quickest quiz you'll ever take. It will take you approximately 10 seconds. If you can answer "yes" to the following three questions, you don't need to read any further. Pat yourself on the back for you are a success in business. However, if some of your answers are "no," keep reading.
1. Do you make a good salary and a net profit that compensates you for the risks you take as owner?
2. Do you work 50 hours a week or less in your business?
3. Are you generally happy in your business?
The last question is undoubtedly the most important but is usually dependent on the first two. So let's start with money.
1. Can a remodeler make both a good salary and a healthy net profit of 5-10%. Absolutely. Is it easy? Not particularly. But it's not easy to be financially successful in any field. After working with thousands of remodelers, I have learned that turning this critical area around starts with convincing the owner that there is no use staying in their business if they can't make adequate money (the "stick") and showing them that others no brighter than they have conquered this problem (the "carrot").
Here is my prescription:
Read The E Myth Revisited by Michael Gerber
Read The Remodelers Guide to Making and Managing Money by me
Be sure you get monthly P & L's and a Balance Sheet and have them explained to you as many times as necessary so that you fully understand them and could explain them to someone else
Join a local association, go to every meeting, sop up every bit of learning available.
Start a monthly breakfast (or lunch, or dinner) club with non-competing remodelers and share information.
Find a Mentor in the community who is willing to help you. They may be another business owner, a father, a sister or whatever. Meet with them monthly.
Go to The Remodelers Show in late October and attend every financially oriented workshop.
Aim to meet other remodelers from around the country that you can stay in touch with by e-mail and phone.
Join a networking or roundtables group where non-competing remodelers from around the country meet once or twice a year to share the inner workings of their businesses.2. Can a remodeler keep to a 50 hour a week schedule - or less? Absolutely. And, listen carefully -- I have never seen a company falter whose owner cut their hours back to a reasonable level. You may have to hire help or stop doing some tasks or delegate better. But there is a way around your overwork. Plus, when you work reasonable hours, you will work smarter and better.
Here are some ideas:
Assess just how you are spending your time at work. You may even have to keep a two week log. Knowing where your time is going will quickly lead you to some solutions.
Consider what you could (and should) delegate to others in your company. Do you have a Production Manager and yet you still have significant involvement in production? Do you have the wrong person and that's why you aren't delegating? Or are you a control freak who has trouble letting go? Take the appropriate action.
Consider what you could (and should) subcontract out. Are you spending lots of time designing and drafting? Could that be transferred out to someone who would work on an "as needed" basis? Marketing is often easily subcontracted. If you, the owner, are doing the bookkeeping, look for an outsource for that. Figure your time as worth $50 an hour and if you are doing the work of a $15 an hour person, stop.
Are there time-absorbers that could be avoided with better prevention? For instance, sometimes production occupies an owner's time because he/she hasn't put a comprehensive sales package together.
Are you working 10 hour days and selling at night? This has two effects -- you are tired when you are selling and your hours go on overload. You have two choices. Stop selling at night or take compensatory time off during the day for the night hours. I recommend the first.3. Is it possible for a remodeler to really enjoy their work? Of course it is. Adequate compensation and reasonable hours are a great start. But sometimes they aren't enough.
Some ideas:
Assess just what parts of the work you do, you really enjoy. Is there a way to let you do more of that and less of what you don't enjoy? If you like to sell but hate to estimate, how can you delegate estimating?
Consider taking a special vacation meant to recharge your batteries.
Leave your phone number with the office but do not call them. Let them call you if there is an emergency.
Get away from your company and think how you can redesign your company to make you happier.
Hire a General Manager who will run the company day-to-day and will let you govern from the Board of Directors level. With good middle management, you'd be able to pursue other opportunities (this sounds much easier than it really is, but it is quite possible). Your company volume probably has to be $2 million or above to do this.
These are three of the biggest challenges in remodeling. But they
are very conquerable. Don't despair, just attack.
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Official Charity of 2008
Remodelers Advantage Inc.
535 Main Street, Suite 211
Laurel, MD 20707
ofc: 301-490-5620
fax: 301-498-6869
Info@RemodelersAdvantage.com