By Sal Alfano. The economic boom of the 1990s gave remodelers quite a ride. Although the economy has slowed nationally, remodeling markets are local and many are still going strong. And in areas where new work has slowed, busy remodelers are still working full speed ahead to complete their backlog.
We all know the upside -- the housing industry has single-handedly kept the American economy from sinking into the doldrums. But a lot of remodeling companies that took advantage of the boom to expand their market are beginning to learn that bigger isn't always better. All growth is painful, but rapid growth hurts most. Cash flow suffers because production can't keep up with sales. Schedules fly out the window because there isn't enough manpower to keep everything going. That leads to a drop in customer service and satisfaction that can seriously threaten a company's reputation.
Through all this, the hapless company owner begins to feel a bit like Alice at the mad tea party. Their days become a frantic but hopeless race to complete backlogged sales calls, calm down overworked subcontractors, and soothe irritable customers. The pain of growth ceases to be a metaphor and actually begins to affect flesh and bone. There is no single solution, but this month's feature "Growing Up Smart" and the accompanying Reader Panel are good places to start looking for possible answers. Among the strategies you'll find are the following:
Slow down. More revenue doesn't always mean more profit. In fact, efficiency almost always slips during periods of rapid growth. Getting too big too fast means a lot of money will pass through your company but not much will stick around.
Delegate. Remodelers are reluctant to relinquish control, but there is no other way to survive rapid growth. Identify existing employees who can take charge of some portion of the workload, then cut them loose. You'll be surprised how well people perform when you show a little confidence in them.
Get professional help. Sometimes, the business is bigger than we are. Instead of trying to go it alone, invest some of that "extra" revenue in a good business consultant. You can't solve everything at once, and often an outsider can help to identify the best places to start.
Share your burden, brother. Believe it or not, yours is not the only company experiencing rapid growth syndrome. Just talking with other remodelers can relieve some of the pressure you're feeling and give you a new perspective. And who's to say that one of your so-called competitors won't give you some inspiration.
As a last resort, I'm all ears. Let me hear from you.
Sal Alfano, Editor-in-Chief