For many remodelers, work slows to a near standstill during the last week of December. Clients either head out of town leaving critical decisions hanging or are too preoccupied with the holidays to give their project the attention it deserves.
Instead of struggling against the current, consider using it to your advantage by shutting down for the last week of the year. Closing your doors for a week doesn't mean you won't get anything done. In fact, it's a perfect opportunity to close out your accounting and spend some time evaluating the year gone by and planning for the year that's fast approaching.
Revenue. Use the past year's sales record to set targets for the coming year. A good estimate of how much business you think you'll do in the coming year will help you set your pricing and assess your manpower needs. If you do all the selling yourself, increasing volume may force you to either add sales help or delegate other management duties.
Expenses. You'll be surprised at how many "profit leaks" a year-end review will uncover. Start by looking for change order work that went uncollected because it was unauthorized or undocumented. You may have to eat this year's losses, but don't start another job until you have a change order system in place that your crews and subs understand.
You're probably losing money on labor, too, and you need to find out why. The cause could be as simple as too many trips between jobsites and the supply house. Or it could be a more complex problem on the sales side -- overly optimistic labor estimates, for example. You can get a handle on both types of problems with a good time sheet -- one that's filled out daily and records where each employee is working and what they are doing. If you don't have one, use the holiday shutdown to put one in place.
Marketing. Most remodelers either don't do enough marketing or start marketing after it's too late. Get a jump on the coming year by looking at the pattern of last year's sales. When did they surge and when did they slump, and what changes can you make in your marketing program to flatten the curve? If you're relying completely on word of mouth to generate leads, this sales review will be a real eye-opener.
You can't afford to ignore this part of your responsibility as company owner. A little bit of time spent looking back over past performance will help you get the new year started on the right track.
Sal Alfano, Editor-in-Chief [email protected]
