Welcome to that dry spell in the remodeling business. It happens to every growing company, regardless of size. It often arrives just after the busy holiday season. The team worked nonstop to get that big kitchen finished just in time for the customer's holiday party. Fantastic! That is, until they got back to the office with nothing to do.
Some contractors like to think they will look forward to the downtime that follows a heavy season. But in reality they're panicked over the lack of work on the books for the next two months.
If this sounds familiar, then I invite you to examine the difference between having goals and setting strategies. It could be the key to changing a bad habit.
Set a Strategy The first of Stephen Covey's “seven habits of highly successful people” (from his book of the same name) is to begin with the end in mind. Professionals in our industry try to follow that advice, but just having goals will not suffice. The problem for many business owners is that after making a little progress, if they don't see the end in sight, they work on more immediate and tangible things. It reminds me of a saying: “If you always do what you have always done, you will always get what you have always gotten.”
Without a clear strategy, it's easy to set yourself up for disappointment. To change things, I suggest you work backwards from your goal and identify each step required to achieve it. The result is a blueprint by which you can measure your success.
Hammer Out the Details In the case of this dry spell, why not reverse the scenario? Make it a goal to have eight weeks of remodeling work booked for January and February of next year. I'll use kitchen and bath renovations as an example of how to work backwards to develop the following strategy to actually get there:
Step 1. The products you need for kitchen and bath projects typically take four to six weeks to secure from your vendors. That means all contracts must be signed at least eight weeks before the anticipated start date. This allows time to finalize customer selections, submit purchase orders, and receive materials. Minus 8 weeks.
Step 2. Your selling cycle typically takes three weeks from the time you meet a prospect until the time you receive a signed contract. Minus 11 weeks (8 + 3).
Step 3. You decide to use a direct mail campaign, sending postcards to targeted neighborhoods of homes 15 to 25 years old, assuming these kitchens and baths are ripe for renovations. To improve your results, you refine the mailing to households with a combined household income of $125,000. You don't have the time or the staff to create or mail these postcards, so you choose a vendor, who suggests allowing two weeks to create the artwork and copy for the postcards. Minus 13 weeks (8 + 3 + 2).
Step 4. Remember to account for holiday time and the number of days when your vendor's or your business is on hiatus. Minus 14 weeks (8 + 3 + 2 +1).
See Results in Revenues You now know that if you set a plan in motion in mid-September, you might very well end up booking eight weeks of work for January and February. You can also budget accordingly so the money required to pay for the marketing is ready when you need it. Not only does it jump-start the next year, but also it shows the difference that step-by-step planning can make on the bottom line — a process that can also be adapted to reach a variety of other business goals.
Given this strategy, a modest marketing investment and a timeline for execution produced definitive results. And instead of a dry spell, your business looks like a well-oiled machine.
—Shawn McCadden, CR, CLC, recently sold his Arlington, Mass.-based employee-managed design/build remodeling business. In his second career, he is Director of Education for DreamMaker Bath & Kitchen by Worldwide. Send e-mail to [email protected].