This is editor-in-chief Craig Webb's editorial for the June issue of REMODELING. What's your view? Write it below.
Whenever I meet one of our industry’s experts—someone who has met hundreds if not thousands of remodelers—I ask the same question: What percentage of the country’s remodeling company owners know what a budget is, much less use one? Again and again, I get the same answer: No more than 5%.
That’s astounding. It also helps explain why so many remodeling companies go out of business. I used to think businesses with revenues topping $1 million surely had financially smarter people manning the wheel, but then I heard about a $22 million remodeling company where the cost of goods sold gobbled 95% of cash flow. Even with revenues that put him in the top 1% of all remodelers, that owner was a dead man walking.
Why? Because most remodelers would rather work in their business than on it. I’ve heard business consultants declare at remodeling events that people’s personalities fundamentally don’t change. At those same events, I’ve heard other consultants say that if you want to succeed, odds are you’ll need to change your personality from one that loves to work with your hands to one that loves to sell. It’s a conflict that a large percentage of remodelers never resolve.
We accept that most remodeling company owners start off with a yawning gap between management skills possessed and management skills required. If you’re in this situation and strive to learn those skills, that’s great: We’re here to help. But many others among you show scant desire to learn. And it’s to this group that I have a proposal: Close your business and go work for someone else.
For many of you, budgeting is a sure path to migraines. Why be remodeling’s equivalent of the guy in that old Dunkin’ Donuts commercial, dragging yourself out of bed every day and wearily proclaiming “Gotta make the donuts?” Particularly when there’s much more joy to be had figuring out how to install a kitchen, build a curbless shower, or add an elegant dormer. Yes, it feels good to be your own boss, but in too many cases you end up being slave to a business, not its master.
Meanwhile, demand arguably has never been greater for talented, professional tradespeople. Owners of well-run remodeling businesses would love to hire you as project managers and lead carpenters, and these smart owners have figured out that it’s worth paying good salaries to attract and keep good people—especially right now, when they have more jobs lined up than we’ve seen in years and indications are that demand for remodelers will rise consistently through the rest of this decade. By working for them, they gain top talent while you gain a lot more hours in the day.
Running your own business has its allure but also its responsibilities, first among them that you strive to run it like a business. If working in the office is the worst part of your day, hand it over to a person who enjoys it. If marketing and prospecting and selling are chores rather than fun for you, go work for a company where other people are eager to do that stuff.
And if making people’s lives better through hands-on remodeling is what makes you happiest, give in to your desire. Close your shop and work for someone else.