Characteristics of Successful Companies
Even though we have several weeks still in October, it’s time to begin planning for 2012. We believe strongly that the companies who plan are the companies who are most successful. Just like planning and preparation are the keys to bringing a job in on time and on budget, so are they the keys to a successful company.
Remodelers Advantage founder, Linda Case, and I just completed a seminar on Targetting Profitability at The Remodeling Show in Chicago and we highlighted several characteristics that we see in the most successful of our many members. Here’s our list:
You and all your staff are Committed to “live within the company means.”
This means creating a budget and sticking to it!
You have an adequate Markup policy applied to all jobs and change orders.
You’ve proven your plan on paper and are confident that your company’s pricing policy will deliver every one of the gross profit dollars your company needs in the coming year. Once you know that the plan is workable, stick to it! Understand that each time you sell a job for less Gross Profit than your plan says you need, you’re taking one step away from a successful year.
Your company has a bias toward Planning before taking major actions.
Like we said above, the companies that plan are the companies that have the most profit, are the most efficient, and have employees that are happier. It’s the thrashing around without a plan that adds stress and anxiety for everyone.
Your company has a proven ability to Implement across the company.
It’s fabulous to have the ability to come up with ideas and direction but only if you can implement the tactics that actually bring an idea to life. At each meeting, wrap it up by reviewing the action items, who is reponsible, and the deadline agreed upon.
Your culture includes Accountability for results on the part of every team member.
Give responsibility to your team members and hold them accountable for making things happen. This doesn’t mean abdicating your responsibility — it means training, monitoring, and helping your top team members focus on the most important activities and meet their commitments.
You have built a company culture that embraces Continuous Improvement.
One thing I’ve learned since being a business owner is that this is a journey, not a destination. We are always looking for ways that we can deliver more value to our members. You and your staff should be doing the same.
You have key Information feedback loops in place.
These feedback mechanisms are typically an array of accurate and timely reports which deliver exactly the information that helps you make the best decisions for the company. The reports you should be reviewing regularly begin with:
- Profit and Loss Statement
- Budget to Actual Reports
- Balance Sheet
- Marketing Statistics
- Job Cost Report(s)
And there are many more that you may find very useful. This is just a start. You may not have any of these available to you now but that shouldn’t stop you from getting started. To me, the most important starting point is also the most important report you can create and that’s your Company Budget. Without this important planning document, your results will be a shadow of what’s possible.
Start today to embrace your role as a business owner and begin creating your 2012 budget (if you haven’t already).
If you’re ready to take your business to the next level — or if you’re a business owner who’s tired of working alone –it’s time to join a group of smart business owners who are facing the same challenges you are. Whether you’ve been in the business 20+ years and want to talk business with other experienced business owners . . . or if you’re just starting and want to share with other young entrepreneurs, we have the group for you. That’s the beauty of having the industry’s largest, longest-running peer group for motivated remodeling company owners! Give us a call today to learn how you can join us. 301-490-5620 X106