Open-book management — where a company opens its financial data to its employees — has been a buzzword since it was coined in the early 1990s. It’s a proven way to keep employees up to speed on how the company is faring as a whole, engaging them on their contribution to the bottom line and the company’s success.
NewDay Development has taken the open-book concept a step a further, using it with clients. Louis Krokover, president of the Encino, Calif., remodeling company says the approach works well with clients who want the job done but who need more information before “pulling the trigger.”
Already using open-book management with employees, Krokover instituted the concept with clients to help offset the negative effects of the economy. “We show clients things we never did before, like our material and overhead costs,” says Krokover, who uses supplier quotes to develop detailed cost evaluations showing what it will cost to complete a job.
“We show the clients those costs and detail exactly how we include the overhead and profit margin to come up with a final bid for their project,” says Krokover, who also reveals information such as contractor and subcontractor reputations and years in business.
Krokover calls the open-book strategy effective, particularly in California, where lower home values have left many consumers uncertain about their remodeling aspirations. “If we can shave $20,000 off the job through cost analysis, we stand a better chance of getting the job.”
—Bridget McCrea is a freelance writer based in Dunedin, Fla.