Have You Ever Flown a Profit Simulator?
You don’t need a huge transformation in your remodeling business to see a huge transformation in the results you achieve. In fact, improving productivity and efficiency by only a few percentage points can rock your business world—in a good way.
This is what we demonstrate to remodelers the first time they work with us, either as University students, Roundtables™ members, at the Master Your Remodeling Business Workshop or by conducting a business review. It’s wonderful to see eyebrows raise when these busy business owners realize the impact that this little difference can have on their lives.
If you’re working too hard for too little money, you should look at three areas:
1. Sales Price
When we meet remodeling company owners for the first time, they are inevitably selling their work for less than they need . . . that is, if they want the benefits that come with a successful business.
If you’re saying to yourself, “I can’t charge more in my market. My clients already tell me I’m expensive.” I’m here to tell you that this is head trash. I can take you to any market in the US and most in Canada and introduce you to dozens of remodelers who ARE charging more in your market and living better than 90% of their competitors. It CAN be done – and we can prove it.
2. Overhead Expenditures
There’s nothing wrong with overhead. . . IF you can sell enough at the right price to cover these expenses AND create a net profit that is over and above your salary. If you’re not sure if your business plan allows you to do this, learn how to create a budget to see. You might need to pare back on the overhead expenses for a time until you can ramp up sales.
3. Production Efficiency
It absolutely kills me when I see a remodeling company producing work for more than they estimated the costs to be. After all of the work you’ve done to attract the prospect, qualify the lead, sell the darned thing, estimate it and do all of the work to organize the project, it’s terrible to then earn less money than you need and deserve.
So, if you can consistently produce your projects on budget or with less than a 2% variance either way, you’ll be in the catbird seat. (and if you don’t know if your jobs are being produced on budget, shame on you. Call us, we can help.)
The best remodelers I know focus on improving these three areas by a few percentage points each month, each quarter, each year. These small improvements can deliver a bang for every hour you invest.
It’s amazing how the dollars can pour in when these three areas are in alignment.
Want to see for yourself?
Click here to use our Profit First Simulator. Play around with the numbers, change the overhead, the net and the gross profit by a percentage or two and see how your life can change. Specifically look at how increasing that gross profit can reduce the volume that your remodeling company needs.
But before you go…
I’d love to hear from you! Let me know your thoughts in the comments below.