Linda Case is recovering from surgery. This month we are re-running her October 2001 column.
Having worked in and around remodelers for more than 35 years now, I've put together a list of some important truths about this business I'd like to offer for your consideration.
1. Running a remodeling business is not intuitive. Many times my clients will say, “If only I had a business degree.” Let me assure you: Most of business is learned by doing. As your company grows, you constantly stay on the learning curve. So be humble and gobble up knowledge by talking to peers, going to conferences, reading books, and listening to tapes.
2. Learning to read and manage financials is a piece of cake. Most new remodelers have P & L and Balance Sheet anxiety. You have to master this to succeed. It isn't as hard as you think. Take a course, or sit next to an accountant who speaks in four- to five-letter words. Do whatever it takes. Otherwise you'll find yourself burying your company.
3. Bad hires happen. You'll probably need to hire three to five people to get a superstar office employee, 10 to get a star field employee. When you first begin hiring, your batting average will be even worse. If you can't bear to fire, you'll never find those superstars in your lifetime. You'll make fewer mistakes if you develop job descriptions, a policy manual, interview questions, and an innovative, marketing-oriented recruitment program. Commit to hire the best — not the best of the applicants.
4. You can work on growing or on getting organized, but not both at the same time. Growth is overrated and growth is often terminal when you aren't systematized. If your company is doing enough volume to provide an income and some profit (see item two), get the business in order, then go for growth if that's your dream.
5. You can buy systems but you can't buy systematization.Your company should have the ability to take a problem and turn it into a solution through systematizing. Buying or borrowing someone else's solution is a great start. But adapt it to what you believe and how you want your company to run. Every job description should start with the employee's responsibility to improve and innovate the way the company does business.
6. Remodelers who care about their employees, care about their clients. You can't fake concern for clients and employees. It all comes down to whether you value and respect people—and probably whether you believe people are basically good and honest. If you don't, you should be working with animals or computers.
7. It doesn't pay to be a “good guy” when it comes to money. Money in business is as basic and primitive as food to the wild animal. Keep giving it away — because you don't like to discuss it, can't face confrontation, don't feel like you should charge for change orders on such a big job, don't want to lose the sub over his unexplained extras—and you aren't going to make any. Go for what's yours graciously but with perseverance and you'll be admired as a smart businessperson.
The learning curve may be steep in this crazy business. But once you've got things humming, your sturdy company will put your kids and your employees' kids through college. It will also build you, and them, a great retirement nest egg. It's worth learning. —Linda Case, CRA, is founder of Remodelers Advantage Inc. in Fulton, Md., a company providing business solutions through a network of experts and peers. 301.490.5620; email@example.com;www.remodelersadvantage.com.