What makes a remodeling company successful? My partner Victoria Downing and I have distilled the key elements into what we call a success system. The system is made up of six habits -- that is, practices regularly undertaken. It's still a work in progress, but see what you think.
Habit One: Sound Financial Management. Right now, I'm working with a company owner who's drowning in debt. His books are nonexistent, and with no money to pay someone to get them right, we're flying blind. Is he charging the right price? Probably not, but we don't know. Is he selling the right number of jobs, and the right kind? Again, it's a guess. Tracking money in a $500,000 or $5 million remodeling company involves lots of time and cost, but without that information, nothing else matters.
Habit Two: Efficient Organizational Structure. The majority of remodeling companies are started by an individual owner, who usually does everything. At some point he or she hires field staff and perhaps an office person. It's a pretty simple organization and doesn't require much thought on how work is distributed and who's responsible for what. But expand to the point where you have 20, 40, or 60 employees, and now you need departments: administration, sales, production, design, estimating, marketing. How are the responsibility and accountability for making the company successful distributed in your company? In most, unfortunately, it all falls to the owner.
Habit Three: Effective Team Building. The remodeling business is a team sport, a fact that trips up many a remodeler. While staffing a company with "A" players may be harder than ever before, most owners simply don't give it the time and effort it demands. We hire the best of the available and then they sink or swim without a job description or a policy manual or training or coaching. This area includes retaining key employees. That means motivating them to do their best and to take responsibility for seeing that the right things happen in their area of influence.
Habit Four: Strong Leadership. This works hand in hand with effective team building. Great teams need great leaders. Great leaders create a magnetic vision that invites staff to participate with passion. Most of us have a mental picture of what an outstanding leader should "look" like. Inevitably, we underestimate our own ability to lead. I've seen great leadership from all types of personalities, from the quiet to the charismatic.
Habit Five: Enhanced Company Culture. All remodeling companies have an underlying culture. In small companies, it results from the owner's philosophy of how people (clients, staff) should be treated and what kind of environment they should work in. As an organization grows, that culture will be taken over by strong (but not necessarily good) natural leaders. A smart owner knows that to create a unique company, he or she must define, control, grow, and monitor its culture. An outstanding company culture transforms a successful company into a significant company.
Habit Six: Developing Systems. This habit must run concurrently with all of the above. All successful companies make success predictable through providing proven systems that help individual team members avoid errors and enhance client satisfaction. In all your operational areas, like estimating or design or sales, your company way of doing business should be defined, taught, and preserved until change is due. How can a company deliver predictable excellence if each employee is doing it his way?
These six key habits are prioritized, like the rungs of a ladder. The successful company works in all areas all the time. But to have a strong foundation, you should master one habit before making the next your focus. If you haven't mastered Habit One (financial), focus on that. I'd love to hear your feedback. --Linda Case, CRA, is founder of Remodelers Advantage Inc. in Fulton, Md., a company providing business solutions through a network of experts and peers. (301) 490-5620; [email protected]; www.remodelersadvantage.com.
