Many remodeling business owners find themselves doing the majority of the field work and wearing estimating, sales, marketing, and accounting hats for their company. While many owners want to grow their business to the point that they spend less time in the field and more time dedicated to the ins and outs of the business, it is a difficult jump to make. During his 2020 International Builders Show education session “From Swinging a Hammer to Running a Business: How to Take Your Remodeling Company to the Next Level,” Kyle Hunt of Remodel Your Marketing shared several practical tips from remodelers who had successfully made changes to grow their business.
Hunt stressed there is no right way to successfully grow a business, but that there are many key principles exhibited by owners who are successfully able to grow their business and transition their role from the field to the office. One of the most essential traits of such owners is they wanted to make the jump and “relentlessly” implemented new ideas they believed would help them get to the next level, Hunt said.
Several fundamental changes to a business can help owners grow their company while reducing stress levels: raising markup, improving the sales process, and turning down “non-ideal work.”
“You have got to raise your markup to get from one level to the next,” Hunt said. “You have got to get more gross profit dollars [from projects]. [If you raise markup], there are more dollars there.”
A key to changing and improving the sales process is practice and review. Hunt said it is important to take time after a sales call to reflect on what went well, what didn’t go well, what could be improved the next call, and what could be avoided the next call. Improving the sales process can set more expectations for clients upfront and, as a result, help improve customer satisfaction.
Turning down “non-ideal” work is one of the most difficult things for business owners to do, according to Hunt. “Non-ideal” jobs are typically small, and the marginal profit on these jobs generally does not have a large impact on annual revenue even if there is a large volume of small projects. These “non-ideal” jobs typically incur a high opportunity cost and detract from time that could be allocated to larger jobs.
Hunt said another key for business owners to allow their business to comfortably grow is to allow themselves to recognize they need help with their numbers. It is often a source of embarrassment if owners don’t understand their financials or cannot read profit and loss statements. However, allowing this embarrassment to prevent education about the financial side of the business can cripple any chances to grow, according to Hunt.
While many key principles can help owners grow their business, Hunt said, it is important above all else to understand the why behind the growth. Understanding this can inform if growth is the right thing for the business and can serve as a strong motivator to take the business to the level desired by the owner.
“There’s not one right way of growing. You’re supposed to build a business you want to build and enjoy it,” Hunt said. “Are we enjoying the journey we’re on with our business and if not, how do we adjust it? You should evaluate each year why you want to grow or what you want to do.”
