Mark Richardson: Keep it Simple Stupid

The level of complexity in business today appears to be greater than ever. Advancements in technology have dramatically changed how clients approach and research the remodeling process. The shift from depreciation in homes to appreciation also impacted calls to remodelers from what was a scarcity in recent years to a dramatic increase now. Most people, including you and your clients, are time starved. The pace at which we operate allows for little time to reflect on important decisions and planning.

In general, what we do (remodel homes) is the same as we did 20 years ago; however, the business seems much more complicated.

Clear and effective thinking

Many of you have heard the acronym KISS (keep it simple stupid).

I often think of business like a pot of boiling water. Today’s pot is quite full and with a mixture of many different new ingredients. If you let the pot boil down, the excess and unnecessary ingredients are vaporized and you are left with the key elements at the bottom of the pot.

You can think about this metaphor in the context of today’s business environment. All of the noise, the challenges, the newfangled opportunities, and team suggestions are the boiling liquid. As you let it boil down, what is left? What really matters? What do you and your team need to focus on to achieve success?

All remodeling businesses were not created equal and most have experienced different results over the last few years. The following are a few of the basic ingredients that can be found at the bottom of the pot—the ingredients that really matter for most remodelers.

Is the phone ringing? Leads are opportunities for sales. Leads are the first date that could result in a wonderful client or project. Every business must have leads to make sales. With the changes in homeowner remodeling research processes and the need to get project done, you need to become very knowledgeable about how leads may or may not be coming in. Who is calling? Why are they calling?  How did they get your name? What kind of projects are they calling about? How do my numbers compare with last year versus five years ago? If you look at this subject like a camera lens, you will know more about the focus. With focus and clarity, you can now feel good about where you and your business may be headed. You can have a better understanding of how to invest moving forward. Leads are the first step in the pipeline and a great indicator of what is to come. While relatively simple, this can be where most mistakes are made, so make it a priority to invest the time into lead generation and knowledge.

Are you landing the planes? Sales are not the same today as in the past. Clients are buying differently. The time from conception to sale is greater for most businesses. The type of sale and projects are not the same as in the past. The average sales ticket is rising for most but the close rate is slipping for some. The better specialty salespeople and design-build salespeople are incorporating sales processes and techniques learned from each other’s dialect and worlds. Many of the dogmatic sales processes that worked a few years ago no longer get the results they should today. While sales can be a complex subject, it is also pretty simple. When selling is tougher, one needs to spend more time on sales training and techniques. When prospective clients are overwhelmed with choices, it is the salesperson’s job to reduce stress and simplify the sales and selection process. Now is the time to take inventory of your sales process and make the proper adjustments. This commitment and these changes may be very simple but will be the difference between being good or becoming great.

Am I making money? Making money is essential to all business. Many remodelers look at making money as the goal but don’t understand the basics. Making money is a result of what you do, not a product in itself. If you estimate your project and overhead costs correctly, sell what you forecast, and produce projects effectively, then you will make money. If you find one of the variables is off, then you need to adjust another accordingly to make the profit you expect. I know this may sound basic but it really is that simple. If after the first quarter your sales are behind by 20 percent, then what do you need to do? You can push harder on sales in the second quarter to catch up, you can produce projects more profitably, or you can make some tweaks in your overhead budget or expenses. The important message is you need to “act” to make money. You need to say to yourself, “Making money is not an option.” While this may be easier said than done, it is critical you make it a priority over much of the other noise.

In closing, KISS is not easy unless you make it easy. Take some time to boil things down to the basics. Take some time to really understand what is most important to your basic success, then invest your time accordingly. PR

What do you and your team need to focus on to achieve success?