Credit: Debra Thornton Photography
In my work with remodeling contractors, it is not unusual to see companies that have a lot of debt — sometimes in the hundreds of thousands of dollars.
Recently I spoke with a client, Tom, who said right at the beginning of the call, “As of today, we have no debt of any kind.” He and his wife had just paid off the mortgage on their office building. They had previously paid off the mortgages on their home and their rental property. And their remodeling company’s balance sheet shows that the company’s assets are much greater than its liabilities.
How did they do this?
OK, so your company is currently in debt. What can you do besides the above to help get out of debt sooner than later?
Raise your profit percentage goal and use the resulting money for nothing but paying down debt. I have a client who did this during the Great Recession. And it worked. He has no debt as of this year.
The other strategy that helps in doing the above is to become more skilled at sales. The better you are at selling, the less important price becomes. Doing so made a huge difference in the amount of money our company was able to make.
When is the best time to get started with some of these habits? Right now! Start today and get a jump-start on the New Year.
It is a lot more fun working in a company with no debt than the alternative. Give yourself that gift in 2013!
—Paul Winans, a veteran remodeler, now works as a facilitator for Remodelers Advantage, and as a consultant to remodeling business owners. Contact him at firstname.lastname@example.org.