Ideally, you have a plan for maximizing your company's success in 2008. Ideally, your staff helped you create the plan, put it on paper, and roll it out in an all-company meeting before the year began.
Realistically, the situation is probably somewhat different. For many remodelers, the truth is that you were so busy with the day-to-day of 2007 that you kept putting off the big picture. Once again, the urgent trumped the important.
It's not too late. Act quickly, and you can still work through the key steps of developing and communicating a strategic plan. You don't need fancy software, a 200-page description, or a bank loan. But you do need to figure out — at a minimum — what will constitute success for your company this year.
Start by establishing an ideal bottom line net profit. (I suggest 8% to 10% of total volume. Remember that net profit is tabulated after owner pay.)
Then calculate the total volume and gross profit needed to achieve that bottom line.
Next, develop a behind-the-scenes program that outlines how every employee and department will adopt the mindset of owners, will monitor progress at regular intervals, and will, in the end, help make the plan a reality.
SETTING THE STAGE Here's a real-life case study of how a relatively small remodeling company (two owners and four staff ) created its first company-wide strategic plan.
Robin Burrill and Rob Mathews, the married co-owners of Curb Appeal Renovations, in Keller, Texas, did the initial work themselves. Usually I advise remodelers to involve the entire company in every stage of strategic planning, but a key position (office manager) was in transition, and, this being the first such plan for the company, the owners wanted to set the stage.
Burrill and Mathews reviewed their company's vision, mission, and core values, and then created budgets and projections based on a 25% growth rate through 2010. Recognizing that they represented just a third of their company, the two then brainstormed ways to get the full staff on board. They decided on an all-day “summit” with three goals: to get staff buy-in on a growth plan for 2008; to teach employees key financial parameters; and to elicit the participation of all staff in meeting challenges and creating solutions. Employees were told to mark their calendars for a fun and exciting day.
CASHING IN Conducted by a third-party business coach, the summit began with the announcement of a reward system for participation. Each employee who volunteered an idea or comment would get a poker chip. The person with the most chips at the end of the day would receive a prize.
- A detailed review of the highlights of 2007;
- A SWOT (strengths, weaknesses, opportunities, threats) analysis of the company;
- A review of the company's vision, mission, and values, along with how they apply to each employee's job;
- A review of plans for 2008;
- And an overview of the company's financial management. This was done by playing a budget game that explored where revenue was spent and how little went to the bottom line, even in good years.
At the end of the day, the poker chips were counted. Employees had earned between 220 and 360 apiece, and — in a surprise twist — all received that amount in dollars. Overall, the day's outcome “was better than we could have imagined,” Burrill says. “Everyone thanked us for making them a part of the plan.”
Today, Curb Appeal Renovations is incorporating key goals and suggestions from the summit into every discussion and meeting it holds. Quarterly “mini-summits” have been planned to keep everyone on track. And next year's summit has been scheduled to last two days.
—Linda Case is founder of Remodelers Advantage in Laurel, Md., a company providing business solutions through a network of experts and peers. 301.490.5260; linda@remodelers advantage.com; www.remodelersadvantage.com.