By REMODELING Magazine Staff. When my husband and I started our remodeling business in 1978, he was a craftsman and I knew some bookkeeping. There were no resources we were aware of to help us learn how to run a remodeling business. We felt like lone wolves. Somehow we muddled through and kept our family afloat. But it wasn't easy. I remember Paul working all day on a site, then estimating and meeting with potential clients at night.
By 1989 Paul had stopped working in the field. But it still felt as if we were just steps ahead of a boulder rolling downhill. We were working hard every day but rarely thought about a bigger picture.
Around this time, we began to work with a local business consultant. We knew it was going to be expensive, but we felt -- and our experience confirmed -- that we didn't have the expertise or discipline to bring our business to the next level. The consultant helped us create a business plan and the systems to track progress. He was a great resource. Then he moved to another state.
Real life models
At that point, we knew the benefits of an outside perspective. So we decided to join a peer group. We'd learned about these at trade shows. Who else but a group of people running similar businesses could understand the challenges and opportunities we faced every day?
I'll never forget our first meeting. We were introduced to a dynamic group of remodelers from around the country who had absolutely no reservations about revealing the state of their companies, including all the financials. They shared the good, the bad, and the ugly. These people talked the same language we did. They freely gave and received feedback regarding all issues. For the first time, we had real life models for our company.
At this first meeting, we also got to see up close how another remodeler ran his company. We met the employees, toured the office, and were given a binder full of his paperwork. There were forms and procedures we could adapt for our use. There was some extra time before the meeting ended and we each had an opportunity to ask for help on specific issues. We put it out to the group that we wanted to raise our gross profit, which at the time was 25%. Their answer was simple: Just do it. Start charging 27% and see what happens. That was 1994. Paul, as our salesperson, edged it up incrementally over the years and we now routinely earn a 40% gross profit.
The true rewards
Believe it or not, increasing our gross profit is among the secondary benefits we've reaped. We have a library of forms from other companies and with that have created (and continually revise) our own systems and procedures. We've learned the importance of working on our company as opposed to in our company. We've learned to look ahead. Paul works 45 hours a week. I work 32. We're also away from the business more than three months a year going to peer group meetings, other industry events, and taking vacations. Our involvement with peer groups has a lot to do with the ability of our staff to function effectively while we're out of town.
In the short term it's not cheap to belong to a peer group. In addition to the annual fee, there are travel expenses and the cost of being out of the office. However, the long-term payback can be invaluable. Can you imagine a higher income, fewer hours, and a more balanced life -- not only for you but for your staff as well? On top of that you'll have the opportunity to visit cities all over the country and get an up close perspective of how other remodelers do what you do. Most importantly, you'll develop friendships with people who will be as caring, honest, and open as you are. That, you can't put a price on. --Nina Winans, CR, is vice president of Winans Construction, Oakland, Calif.