The Path to Higher Profit: Strong Leaders & Good Numbers
After more than 30 years of working with remodelers around the country, I have encountered nearly every problem to confront a remodeling company: the dissolution of long-term partnerships, ineffective marketing tactics, sales systems that don’t produce results, unmotivated production crews, theft from overhead coffers, bankruptcy and terrible accidents on the job.
On the other side, I’ve seen phenomenal successes: great customer satisfaction, happy employees who are ready, eager and capable of taking over the company from the owners upon retirement, and substantial consistent profits over time.
Each outcome, success or failure, is the direct result of one key component; Strong Leadership.
Good, sound leadership imparts vision & motivation to employees who then implement tactics appropriate to each of the main areas of the company: marketing, sales, estimating, production and finance/administration.
At almost every Remodelers Advantage Roundtables meeting, we clarify the tactics necessary to reach the next level of success for each unique company.
These tactics typically apply to one or two main areas: For example, one portion of the company is working well; let’s say sales in the current economy, while production slippage results in less gross margin than budgeted.
November is the perfect time to be looking at your numbers for the past year, and then to be making appropriate plans to improve in the upcoming year. The numbers you are looking at provide “proof of concept.”
Want to know if your marketing is working, look at the number of qualified leads received every month. How about sales… look at sold volume compared to budgeted sales. Did you hit month-to-date and year-to-date numbers?
In every main area of your business, certain time-tested systems apply. Get these systems in place, establish goals for each and then test your assumptions AGAINST GOOD NUMBERS.
The Bottom Line
Talk all you want about volume, but until you meet the criteria for success in the other areas of your business, you’re not assured of increasing gross profit.
Strong leadership and a good team can build a growing company, however, as you grow, only effective systems implemented by good employees can produce consistent net profits. You will only know this if you have good numbers to analyze. Use them well and Good Luck!