Within a professional and growing remodeling business, it’s important that everyone is on the same page about the words we use and the meaning we assign those words. If each team member uses the same terms or words but assigns them a different meaning, those individuals, as well as their purpose for the communication, will suffer from what is called “mutual mystification.” We think we’re on the same page, but we’re not.
As the leader of your business, it’s your responsibility to manage accurate communication within your business as well as outwardly to the community you serve. The health of your business, and even the satisfaction of your clients, depends on your team’s ability to interpret and properly act upon what is discussed and agreed upon. And, because the remodeling industry is largely staffed by people who “learn as they go” from those who learned the same way before them, this puts added responsibility on you, the business owner.
The Future of Your Workforce
My first example relates to field staff who do the physical work at jobsites. As field staff age out of their jobs, we expect them to train and be replaced by the younger generation working under them. Use of the wrong words or definitions by those teaching this next generation can lead to serious challenges.
One common misuse of terms (and a personal pet peeve of mine) is to say you are pouring concrete. You should never pour concrete. Concrete should be placed as close to its intended destination as possible. By pouring, or in other words dropping concrete great distances, it is inevitable that the aggregate will settle to the bottom, compromising its quality, durability and strength.
I find it sad that many mature workers in the industry literally pour concrete and don’t know they are doing it wrong. Further, because it is what they were taught, they keep using the term pour as they teach and set the example for our future workforce. As a result, the next generation of workers will also do it wrong and use that wrong term to describe what they are doing. Are you pouring concrete at your remodeling business or are you placing it?
The Problem of Unearned Job Titles
How many carpenters know the difference between a mullion and a muntin? For that matter, how many of them can define either term? How many of them know what is meant by reading the grain on a piece of wood before they pass a plane across it? How many of them know how to properly sharpen that plane? I ask you: Should we really refer to them as carpenters if they do not already know these things? Shouldn’t they be called carpenters in training?
Calling someone a lead carpenter because they happen to be the most experienced carpenter at the site is also a misuse of the terminology. A real lead carpenter, if given the right job information, can manage and properly produce a project to the estimated budget as well as meet the required project schedule. To accomplish this, the lead carpenter orders all commodity materials and helps verify special-order details before they are placed.
They schedule and manage all the subcontractors as well as vendor deliveries. They manage communications with the client and handle most change orders right from the field. They manage, supervise and mentor their subordinates. If you refer to someone as a lead carpenter, but they cannot or will not do all these things, you are creating a misunderstanding.
Earning Profits Requires Accuracy
If you know your business needs a 40 percent gross-profit margin, but you think margin and markup are interchangeable terms, your business will quickly develop cash-flow problems, and profits will never happen. If you need a 40 margin, and you markup estimated costs by 40 percent, you will only realize just better than a 28 percent margin. Worse, some contractors see this as a 12-percent difference. Wrong again.
This is not a 12 percent difference; it is a 12 point difference that is actually a 30 percent difference. Having 30 percent less gross profit to cover overhead and profit not only eliminates profit, but it also leaves you way short on the money needed to even come close to break even on your overhead. This is why so many hard-working remodelers fail.
The Message You Send Clients
I’ll get right to the point on this one. I suggest you eliminate the word bid from your business. Never use it again. And never allow your staff to use it again. A bid is something that happens at an auction where the highest bid for an item you are selling makes you the biggest winner. When a client asks for a bid, they are often seeking the lowest price.
If you bid on work by trying to be the lowest price, you are likely to be the biggest loser. So, when you agree to put together a bid, you’re adopting a bid mentality; even worse, you are offering your business up as the potential biggest loser. Rather than offer a bid, why not offer a fixed-price solution.
Many of you will read this and decide I’m being too picky. I suggest that is short-term thinking—short term for the future of your business and your employees. Our industry is watered down by those who do not belong.
To help keep it professional, I ask you do your part to be a professional and help set the right example. Act like a professional, talk like one and make sure others under your leadership do the same. Maybe it will help to remember this old cowboy adage: “Just because there is a well-worn trail doesn’t mean whoever made it knew where they were going.” 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.