You can take the following quiz in approximately 10 seconds. If you answer yes to the three questions, you may not need to read any further. If any of your answers are no, you should keep going.
1. Do you make a good salary and a net profit that compensates you for the risks you take as owner?
2. Do you work 50 hours a week or less?
3. Are you generally happy in your business?
The last question is undoubtedly the most important. How you answer it usually depends on how you answered the first two. So let's start with money.
Can a remodeler make both a good salary and a healthy net profit of 5% to 10%? Absolutely. Is it easy? Not particularly. But financial success is difficult in any field. After working with thousands of remodelers, I've learned that turning this critical area around begins with convincing an owner that there's no point in staying in business if he can't make adequate money and that others no brighter than he have conquered the problem.
How? Get monthly P&Ls and a balance sheet and have them explained so that you understand them. Join an association and go to every meeting. Find a mentor. Go to the Remodelers' Show and attend every financial workshop. Aim to meet remodelers from around the country who you can stay in touch with. Join a networking or roundtable group. And read The E-Myth Revisited by Michael Gerber and The Remodelers Guide to Making and Managing Money by me (sorry).
Stop Burning the Midnight Oil
On to the second question. Can a remodeler keep to a 50-hour-a-week schedule or less? Absolutely. I've never seen a company falter whose owner cut hours back to a reasonable level. You may have to hire help, stop doing some tasks, or delegate. Here are some hints for getting your hours under control.
- Assess how you spend your time. Keep a two-week log. Knowing where your time goes will quickly lead to solutions.
- Consider what to delegate or subcontract out. Marketing is often easily subcontracted. Maybe designing and drafting could be transferred to someone working on an as-needed basis. If you're doing the bookkeeping, look for an outsource.
- Are there time-absorbers that could be avoided with better prevention? For instance, sometimes production occupies an owner's time because he or she hasn't put a comprehensive sales package together. Are you working 10-hour days and selling at night? Stop selling at night or take compensatory time off during the day for the night hours. I recommend the first.
Happiness is ...
The third question is, as I said, the toughest. Is it possible for a remodeler to really enjoy his work? Of course. Adequate compensation and reasonable hours are a great start. But sometimes they aren't enough. Take a look at the work you do and consider what part of it you really enjoy. Is there a way to let you do more of that? Here are some other suggestions that might make you happier in your job.
- Consider taking a special vacation meant to recharge your batteries. Leave your phone number, but don't call the office.
- Get away from your company and think about how you can redesign it to make you happier.
- Hire a general manager to run the company day-to-day while you govern from the board of directors level. With good middle management, you'll be able to pursue other opportunities. (This sounds much easier than it really is, but it is quite possible.) Your company volume would probably have to be $2 million or above to do this.
These are three of the biggest challenges in remodeling. They're very conquerable. Don't despair. Just take action.
--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.