Financial Management

Ep.50: LIVE from the Extreme Business Makeover in Baltimore

For our 50th episode, we gathered a panel of industry experts and took questions from the audience at the Extreme Business Makeover in Baltimore at the the end of January 2019. It capped off an intense two days of learning, sharing, and networking among the remodelers attending and our Remodelers Advantage team.

In this episode, Victoria and Mark direct the lively discussions with our panel. We were joined by:

We talk profits and payroll, cash flow, the owner’s role in a growing business, margins, staying top-of-mind in your marketing, smart lead qualifying, planning and making decisions on your job sites, and the power of asking “why?”  

It’s an insightful and all-encompassing discussion of how to run your business to get bigger margins, more profits, and creating a real life/work balance. If you missed it, you need to listen to this episode.

 

Ep.48: How to Hit Healthy Net Profits in any Economic Climate with Mike Medford Sr.

One of our core principles is that remodeling companies should make a good net profit, after paying the owners an above-average salary. When the economy’s booming, you can get away with a lot and still hit those goals, sometimes by accident. But the goal is to get those healthy net profits consistently, year after year, even in a downturn.

In this episode, Mike Medford Sr. talks to Victoria and Mark about how to do just that. Before seeing the metrics of the Top Ten Roundtables members a few years ago, Mike says his financials were always in flux. But then he took those figures and made them hard targets.

Mike Medford Sr. has been a home remodeling contractor for over 40 years. In 2007, he partnered with his son, Mike Jr. to form what is now Medford Design Build, with offices in Colleyville and Arlington, TX. Mike Sr. is the president of Medford Design Build.

Mike challenged himself and his team to hit the new fixed targets. He refined their processes, and challenged his team to hit those targets. By the next quarterly meeting, the company’s profits were rising. He talks about how he and his team made it happen, including:

  • Creating a profit-centric culture
  • How net profits will help you beat the labor shortage
  • Focusing your staff on gross profit
  • The importance of open books to the process
  • Setting up a bonus structure
  • Building time in to plan
  • And more…

Mike also talks about getting back to the art of contracting and how important that is to your margins.

Ep.46: Onboarding the Most Vital Roles in Your Company with Jackie Shaw

Your accounting is a vital part of your business. You’ve spent valuable time hiring a new accounting staff member. Now what? Too often, owners think the new hire will be able to sit down and get to work with no introduction to processes and policies of the business. This can be a costly mistake.

Accounting is the story of your business in numbers, Jackie Shaw tells Victoria and Mark in this episode. Properly onboarding a new accountant or bookkeeper will keep that story from becoming a tragedy.

Jackie, the founder of Get Organized! LLC, is one of the QuickBooks gurus who support our members — and they love her. She gets paid to clean up a lot of accounting disasters and has seen first-hand how quickly a new bookkeeper can destroy your books. She’s here to help you get the right systems in place so you don’t have to pay anyone to clean up after a bookkeeping hire goes wrong.

“A bookkeeper can kill a database in a week,” she warns. That’s why, Jackie says, when onboarding new hires, they must do everything the same way they were done before, and they need to study prior entries to figure that out. And you have to forbid them from making changes for at least a month. Other things you should keep in mind when onboarding and working with a new hire include:

  • Not making assumptions
  • Experience doesn’t mean competence
  • Why you don’t want your bookkeeper to take ownership of the books
  • The importance of financial SOPs
  • Why accounting can be like an archeological dig
  • And more…

Including the methods you can use to safeguard your company against embezzling. If you thought talking about accounting was going to be dry and boring, then you have to listen to this episode — it’s lively!

Ep.39: How NOT to Grow Your Remodeling Business with Judith Miller

The Great Recession gobbled up a whole slew of remodeling companies, but more of them fail during an economic expansion than during a contraction. Growth is great, but it’s risky, and knowing how not to grow will put you ahead of the game.

In this hot market, there are so many opportunities, you can get ahead of yourself too quickly for the health of your company. And that’s where remodeling company owners get into trouble by growing the wrong way. There are potential downsides, and to avoid them, you have to keep you basic best practices — and customer satisfaction and net profits lie at the center, says Judith Miller.

In this episode, Judith joins Victoria and Mark to talk about the ways to grow your company the right way.

Judith has been a facilitator for Remodelers Advantage Roundtables for more than 15 years. She’s a QuickBooks expert, the author of The Remodeler’s Ultimate Guide to QuickBooks, and has been a columnist for Remodeling magazine for more than 10 years. Judith isn’t just a financial guru, she’s a high-level strategist who understands that numbers prove your strategy. She loves the challenge of helping good remodelers become better every day.

When trying to grow, the biggest stumbling block is a lack of control, preparation, and not focusing on the best practices. Judith tells you what those best practices are, and how to grow the right way, while explaining the details, including:

  • The critical need for leadership
  • Why your financials have to be in order
  • The Top 5 things you need to do to build a strong, profitable company
  • The predictable stages of growth — and which is best to grow in
  • How large you can get
  • Why hiring a sales force is the riskiest transition
  • How to build a company you can sell
  • Why growing over 20% may be crazy
  • And more…

You’ll also learn why “The Whale” projects takes too many remodelers down. Click here to go to the Growth Sustainability Calculator we discussed in the episode.

And if you need QuickBooks help, or want bring in Judith as a consultant for your business, you can email her at jfmiller@remodelservices.com.

 

Want More Ways to Improve Your Business in 2019 and Beyond?

We are excited to announce that we are re-launching and re-branding our annual January event, formerly known as the Master Your Remodeling Business Workshop. The Extreme Makeover: Business Edition Event has been re-tooled and re-focused on providing growing remodelers and renovators with the tools necessary to improve their businesses in 2019 and beyond.

In addition to Judith Miller, this 2-day event will feature well-known speakers such as Victoria Downing, Tim Faller and Mark Harari and bring in new faces like Doug Howard and the 2018 Fred Case Award Winner, Michael Sauri. For more information and to grab Super Early Bird discounts, CLICK HERE.

Ep.32: Industry Insights with Rick Strachan

If you’re curious as to where the remodeling  industry is going and the key opportunities for the future, Rick Strachan of Hanley Wood has your answers.

In this episode, Rick breaks it all down with Victoria and Mark, telling you what will drive growth, and how to face the coming challenges. You’ll get the big picture, detailed information to help you make strategic decisions for your future, and more numbers than you can shake a stick at.

Rick has worked in the media and information business serving the construction industry for 35 years, and for the last 26 years has been with Hanley Wood’s Remodeling Group. He is a founding member of the Harvard Joint Center Remodeling Futures Program, and is a past board member and former chairman of the Home Improvement Research Institutes Remodeling Professional Committee. He has also received NARI’s President’s Award for service to the industry.

The biggest drivers of remodeling, now and for the near term, are the Baby Boomers. Rick tells you what you need to know about this generation’s buying power and habits, as well as:

  • The predicted habits of Millennials in the remodeling space
  • The phenomenal growth in the industry and why the future looks bright
  • How to address your labor shortage
  • Why product and materials costs will escalate, and how to deal with it
  • Why HGTV isn’t all bad for business
  • What our aging housing stock means for you
  • And much more…

This episode is as close to fortune-telling as we can get. If you have any questions for Rick, you can email him at rstrachan@hanleywood.com. For more information about Hanley Wood and its news and information about the remodeling industry, go to their website.

Summit Partners

We are proud to partner with Rick and his team at Hanley Wood on producing the Remodelers Summit and we’re excited to get down to New Orleans for this year’s event. We only have 5 seats left for Summit so if you haven’t registered yet, please do so ASAP. You do NOT want to miss this year’s event!

Ep.31: How to Successfully Use Cost-Plus Pricing with Josh Baker

The Cost-Plus Pricing model seems to go completely against common sense, but it’s a concept that we’re getting more questions about from our membership. One contributing factor is that consumers increasingly demand transparency when purchasing products and services — and homeowners are coming to expect it when undertaking a remodeling project. But so many remodelers don’t understand it. Can Cost Plus be your new pricing model?

Josh Baker, co-founder of BOWA Builders, has been using Cost-Plus Pricing for more than 20 years. In this episode, he talks to Victoria and Mark about its pros and cons, and why it’s a cornerstone of his company’s success.

Josh founded BOWA Builders in McLean, VA, with college friend Larry Weinberg in 1988, serving the Washington, DC, metro market. As the leader of BOWA’s sales and marketing team, Josh helped to quickly grow the company’s revenues from $250,000 to nearly $40 million in just 20 years. As chief revenue officer, Josh’s focus is on growth and managing an energetic, productive sales team. Recognized nationally as an expert in the industry, Josh is quoted regularly in publications, including The Washington Post, Better Homes & Gardens, and Remodeling, and is a frequent speaker at local and national industry meetings.

Cost-Plus Pricing can be a differentiator, but it can also frighten some remodeling business owners — as well as some clients. Josh explains how to present the concept to clients, and what it will take to implement it profitably, as well as:

  • What jobs are suited to the Cost-Plus Model
  • Weighing the risks and rewards
  • The necessity of pinpoint accuracy in estimating
  • Why not to apologize for your costs
  • The time it takes to do well
  • Why you need a sophisticated, expert sales staff to make it work
  • And a whole lot more…

Josh stresses that Cost-Plus Pricing isn’t for everyone, or for every job. Listening to this episode may help you decide if it’s the pricing model for you, or for some of your projects. Check out BOWA’s website for more about the company, and if you have questions about Cost-Plus Pricing, send Josh an email at josh@bowa.com.

 

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Ep.30: How to Create a Financial Plan with Sacha Millstone

Business plans, marketing plans, any plan serves as a map to a goal. Your financial plan is no different.

You need to set your goal, write it down, and commit to it. Our Roundtables members do this regularly for their businesses. But too many people get anxious when it comes to looking at their personal financial plans, says guest Sacha Millstone, a financial planner and wealth manager.

Sacha discusses how to get past the anxiety about your personal financial planning with Victoria and Mark in this episode.

Sacha started the The Millstone Evans Group in the Washington, DC, area in the late 1990s, and now has a team of 10, with offices in Washington, DC, Denver, CO, and Boulder, CO. She has helped hundreds of clients achieve their financial goals by creating a written plan and helping them put it into place.

When you’re running a small business, you can get so absorbed in your work financials that you avoid looking at your personal situation. But you have to, says Sacha. And while you can do a financial plan to get you to retirement, it’s difficult. There’s so much emotion around money that you may need someone to advise, coach, and hold you responsible.

There’s so much good advice in this episode! You’ll learn:

  • The magic of compound interest
  • Why not to use the word “budget”
  • Where your investments are — and what to add
  • Why insurance — especially for yourself — is so important
  • How to mitigate risk in your investments
  • What the Monte Carlo analysis is
  • And a whole lot more…

You’ll also hear why Victoria’s idea of summer fun for kids includes financial quizzes. This episode breaks down the importance of financial planning for remodeling business owners in ways that will make you think differently about the whole subject. It’s never too late to plan.

For more information about Sacha, her business, and how she can help, go to the Millstone Evans Group’s website. If you have questions, drop her an email at sacha.millstone@raymondjames.com or give her a call at (800) 201-4554.

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