McCadden: Designing/Building a Sustainable Remodeling Business

by Kyle Clapham

A successful and long-lasting remodeling business doesn’t happen by accident. If that is what you seriously want for your business, you can’t leave it to chance or just assume it’s going to happen.

Instead, you must be strategic and purposeful in its design and construction. Unfortunately, too many remodeling business owners go through this evolution at what I refer to as the “Lumberyard School of Hard Knocks.”

Lacking experience and ignorant of what to expect, the evolution can take much longer than anticipated, and many business owners ultimately fail to achieve their vision.

To help you better design, plan and accomplish the business you would like to have, I have identified five key business considerations you must explore. Consider these all to be cogs in the machine you must build. Like any efficient and sustainable machine, these individual cogs must be well thought-out and properly constructed.

In addition, I have added a few words of wisdom from what I learned attending the Lumber Yard School of Hard Knocks. I hope what I share here helps speed up your path and prevents common but avoidable disappointments.

As the business grows, you can’t do it all yourself. The business will need an experienced management team that has helped create—and faithfully follows—a strategic and sustainable business plan. Rather than constantly reinventing the wheel every day, the right management team seeks out and implements industry best practices.

To support continued growth—and because employees come and go—the management team must also continuously identify and mentor a bench of strong leadership within the team in each department. In this area I learned it is better to hire the employees who can grow and be ready for the future of your business.

Don’t make the mistake of hiring just to solve today’s demands. Hire employees who can and want to grow into the positions and roles you have identified that the business will need to fill as it grows.

When the business is very small, the business owner may be able to keep track of the money in and money out without a formal bookkeeping and accounting system. However, before the business grows in any significant way, it should already have a strong financial system in place that predicts, tracks and analyzes the cost of doing business and producing projects.

The financial system should also include an estimating system that facilitates timely and accurate “what-if” project-pricing abilities to help assist prospects and sales staff during your sales process.

As your business grows, your financial system will help you come to realize and confirm the project and customer types that are most enjoyable as well as profitable for your business. To attract those targets, and quickly eliminate those who do not qualify, the business must have a marketing strategy and marketing delivery system that consistently identify and attract your target prospects.

If you do this well, you will save yourself and your sales team a lot of time on sales calls explaining how you do business to people who should already know how you do business before you get there.

Before your business adds its first salesperson, the owner must have an established and tested sales system that can not only be taught to new hires, but one that can also be used to measure and hold each salesperson accountable to the desired process and expected outcomes.

In addition to your marketing strategy, your sales process must prequalify that a prospect’s purpose, budget and decision-making process are a match with what you offer as well as how you have decided to do business. The idea is to have a sales process in place that provides a consistent approach and results for those prospects who become clients.

Your business will need a design system that properly identifies and documents the information needed by the client, as well as the project team, and ultimately serves as a communication tool to make sure the design and final project serve the client’s purposes within the agreed budget and timeline. Here you must decide if it is practical for your business to offer such a service. I quickly discovered early in my career I was not a designer.

To accomplish what my business needed in this area, I found subcontracted design professionals willing to join and complement our way of doing business, making up for the shortcomings of our team. As the business grows, bringing design talent on staff can become a practical option.

Because the owner can’t keep everything in their head, and to avoid the risks of micromanagement, your business will need a communication system and process that uses technology to create, capture, manage and distribute timely and accurate business and project information between team members, trade partners, design professionals and the client.

Communications is a broad umbrella in a remodeling business. Examples can include project specs, payment schedules, legal contacts, sub agreements, job descriptions, documentation of processes, timecards, sales compensation plan(s), profit-sharing plans and many, many more.

I hope you noticed that the physical production of your work is not in my top five. Producing the work is typically what a remodeling business owner is already good at. However, before you can delegate production to others, my list will already need to be in place.

Keep in mind the most common reason a small business fails is because the business owner allows the business to grow faster than the systems required to support that growth. Now, you can’t claim ignorance if and when it happens to you. QR

Shawn McCadden is a speaker, business trainer, columnist and award-winning remodeler with more than 35 years of experience. He can be reached at shawnmccadden.com.

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