Warren Buffett is famous for “embracing the boring” as an investment strategy. In Buffett’s case, this equates to sound companies with stable returns and modest dividends. As I reflected on his approach, I thought about the many remodelers who should apply his sage advice to their businesses.
Entrepreneurially focused contractors often chase shiny objects while ignoring the more mundane areas of their businesses. But embracing the boring can result in real benefits for any company. The following are some areas to consider.
1. Focus on key numbers that drive the business
Mostly these are leads, sales, gross profit, gross profit percentage, and overhead. Improving each of these by just a point or two will dramatically increase returns. Begin by spending a couple of hours per week analyzing and improving these numbers.
2. Examine your processes
These include lead generation, sales, production, and client retention. Make sure you write down each process step by step and involve others, challenging everyone on your team to suggest improvements.
Nine out of 10 problems in home remodeling result from miscommunication. If you focus on the top three to five most common issues, you can fix them. Whether the problems are internal or external, identify ways to communicate more effectively and you’ll really boost your company’s success. Again, this may not be as sexy as spending time on a new marketing approach, but it will help make the business healthier.
4. Keep up with products
Most remodeling businesses want to produce high-quality projects, yet they spend little time focusing on finding out about new products and new or improved installation techniques. By identifying a few areas and assigning them to different team members, you should see improvement. This has the potential to create tremendous efficiencies and improve the client experience.
5. Consider your people
When is the last time you asked your key people where they would like to be in their careers in three years? The good ones will leave your company if you can’t provide the right opportunities. Have you recently done a competitive analysis on compensation programs? Keeping your team top-of-mind will help prevent possible staffing problems down the road.
Just a few hours a week spent embracing the boring can create dramatic results for your business.