Last month in this space, I reviewed a series of market projections for 2014 from Harvard University as well as the industry’s leading associations.
Laying Down the Law: Rules for Your Customers
If you're like most remodelers I've met, you find certain aspects of your business exciting and intellectually stimulating, but other aspects have far less appeal.
If you're like most remodelers I've met, you find certain aspects of your business exciting and intellectually stimulating, but other aspects have far less appeal. If I were to hazard a guess, I would think that dealing with your customers is a double-edged sword: You just love when they hand or mail you checks and praise your work but feel less joy about some of their other contacts (e.g., complaints). So maybe it's time to establish rules for your customers to live by. They'll work so long as you enforce them.
You've probably heard the joke about remodelers being Wednesday night's entertainment: When nothing is on television Wednesday night, people call a remodeler to come over to the house and entertain them for the evening. Every remodeler I've met has had this feeling after a sales call. So stop having that feeling by instituting this first rule.
Rule No. 1: No evening sales calls. "But how will I see my customers?" you ask. Simple. When you think of your company as a professionally run business, your customers and prospects will treat you professionally. No evening appointments? You'll be shocked how many customers will rearrange their schedules to meet a remodeler (with standards) they want to hire.
Rule No. 1 pertains to lifestyle and your happiness, so let's add a rule to fatten your wallet.
Rule No. 2: All work performed outside the scope of your contract must include a signed and priced change order form. How does that affect all those "while you're here" lists your customers give you? It changes them from out-of-(your)-pocket expenses to mini profit centers because each change order is fully priced as a separate job.
The fee for each change order should be collected upon completion of the change order, not as an add-on at the end of the job. You don't want your final payment resembling the annual budget for a Third World country. It's tough to collect a check that big, and you're apt to negotiate down to avoid offending your customer. Which brings us to Rule No. 3.
Rule No. 3: Explain to your customers that remodeling is not your hobby, it's your job. You have to feed and shelter your family from the income you generate from this business. Every hour your employees spend working on a task that was not included in the original agreement comes out of your profit. You expect to be paid in a timely manner, with your final payment reflecting a small percentage of the work performed. And it will be paid in full upon substantial completion of the project.
Your contract should be designed to protect you as well as your customer. If your customer won't sign the rules under which you conduct business, then find a customer who will. Otherwise you'll never make a profit as a remodeler.
Room for one more rule? Let's make this one relate to your future.
Rule No. 4: Expect satisfied customers to provide referrals. When you finish a project and the job went well (meaning you made a reasonable profit with only the standard amount of aggravation), solicit prospects. Let your customers know that your success is based on their satisfaction as well as their involvement. If they were satisfied with your work and want to see you return to their home in the future to perform additional projects, it's in their best interest to ensure that you work profitably in the interim. That means helping you find other good projects.
I occasionally listen to a Sunday morning radio show about auto repairs. The host always uses the phrase, "Good mechanics aren't expensive; they're priceless."
Take that attitude to work tomorrow and let your customers experience it. Let them see that good remodelers aren't expensive; they, too, are priceless.
Stan Ehrlich can be reached at email@example.com.