Since the election there’s been a lot of speculation about how the new administration will affect the remodeling industry. If remodelers are anything like the rest of the country, opinions are split about 50-50. About half are hoping that less regulation and lower taxes will make their lives easier and their businesses more profitable; the other half worry that we’ll throw the baby out with the bath water, and that lower standards will mark a return to the Wild West.
We’ll have to wait and see. But I think it’s unproductive to point to external forces as the reason a business succeeds or fails. My experience both in the industry and as an informed observer tells me that four factors that are entirely under your control will have a much greater effect on a company’s fate. Get better at any one of these and your company will be in position to win no matter what happens comes Jan. 20, 2017.
1. Know your numbers. Remodelers are good at construction math, like adding dimensions or calculating discounts, but many (dare I say most?) are winging it when it comes to pricing their work or keeping track of revenue and expenses. You don’t need to be an accountant, but you do need to understand how accounting works—not just the software, but what the numbers mean.
If you don’t know where to begin, start with Michael Stone’s blog or read his book, Markup & Profit Revisited. Another good book is A Simple Guide to Turning a Profit as a Contractor, by Melanie Hodgdon and Leslie Shiner. And all three authors are available for a personal consultation as well.
2. Learn how to sell. Being comfortable talking with strangers is a prerequisite for making a sale, but there’s a lot more to it. Solving a homeowner’s problem usually wins the sale, but most remodelers are too busy talking about their company to hear the homeowner tell them what kind of help they really need. The result is a lot of wasted time and missed opportunities, or, worse, a race to the bottom on price.
Think you can improve without outside help? Don’t bet on it. One of the most effective training programs for remodelers is Sandler Training, which has in-person trainers in most major markets and also offers online follow-up. Or attend our Extreme Sales Summit next September. Other options are out there as well—but doing nothing is not one of them.
3. Commit to marketing. Referrals are the main source of leads for most remodelers, but they don’t happen by themselves—at least not for long. The solution is marketing, some of which is easy and some of which is hard, and all of which is too often ignored. Change that by getting advice from a professional marketer who knows this industry. Then avoid making the three most common mistakes: not spending enough on marketing, not measuring the results, and not continuing to market even after winning some work.
4. Join the club. As the business of remodeling gets more complex, you can’t afford to operate in isolation. Most of the successful company owners I have known have at one time or another regularly met with their peers as part of a formal program, like Les Cunningham’s Business Networks or Victoria Downing’s Remodelers Advantage. Most are also members of one or both of our industry’s professional associations, the National Association of the Remodeling Industry and NAHB Remodelers. Some also meet informally with friendly noncompetitors to make sure they don’t miss anything.
Making these improvements won’t be easy and it wont be cheap. But it’s something you can control regardless of how you feel about the election.