Process Improvement

Ep.104: [Unscripted Back-Up] How to Hit Healthy Net Profits in any Economic Climate with Mike Medford Sr.

Editor’s note: We’re all working from our homes, away from the friendly confines of the office and its podcasting studio. So we dug into the virtual vault to bring you this episode. We’re in an uncertain time for many remodelers, so here’s some advice that will help you weather any business climate.

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.

Time to Give Back

After more than 30 years of working with some of the finest Remodelers and Renovators in the business, we are facing new challenges in our industry. We want to give back to an industry that has supported us through good times and bad, and so we’ve created Build Aid, a free event to help support our members, associates, and friends in the remodeling community.

Join us on April 1-2 as we explore various ways your business can navigate these tough times, and position yourselves as a leader when the world begins to recover and re-build.
Click Here to Learn More & Register >>

Ep.102: Developing a Sustainable Niche to Support Your Passion with Wright Marshall

One of the strongest ways to differentiate your business in your market is to have a niche. 

Wright Marshall’s company, Revival Construction, has always focused on one highly specific niche and is constantly refining its team and systems to be the leader in that segment.

In this episode, Wright will share his approach with Victoria and Mark, and why following his passion for historic architecture helped him create a successful remodeling business.

In May 2000, Wright Marshall formed Revival Construction Inc. in Atlanta, GA, dedicated to renovating and restoring Atlanta’s older homes. The company focuses on classically designed whole-house renovations, and additions to houses built before WWII in the intown areas of Atlanta. Revival’s mission is to build beautiful homes and lasting relationships. Wright’s also a longtime Roundtables member.

Wright minored in architectural history in college, and planned to build for a while before going to architecture school. He didn’t go. Instead he concentrated on remodeling and building additions on older homes, allowing him to follow his passion for classical architecture and run a successful business. While there were other companies doing it in his market, they weren’t doing as well as he thought he could. Wright concentrated on providing a better customer experience in that niche, as well as: 

  • Determining if your passion can be a sustainable business
  • Working with architects
  • Why design-build doesn’t have to be in one company
  • Building your reputation in the niche
  • Defining success in hiring
  • Investing in estimating
  • The importance of discipline
  • Setting smaller, realistic goals
  • The advantages of finding your niche
  • And more …

You can also learn why Wright chose the name Revival for his company, and also get to hear a little bit of an Allman Bros. song. Also, give yourself a little time to look through Revival’s Project Portfolio — there are some beautiful examples of Wright’s work.

Become a Master

Our MasterClass courses are two-day sessions of rich, interactive information with plenty of hands-on instruction. We limit our classes to 12-18 people, giving you ample opportunity to work one-on-one with the instructors. All our instructors are well-known respected industry experts and some of the best in their fields of expertise. Learn more about our MasterClasses in marketing, the design process, bookkeeping, and project management.

Ep.98: How to Structure and Run a Profitable Design Department with Chris Landis

Jobs are won or lost during the design process. With so much on the line, it’s clear that your design department should be running at peak performance. But there are so many ways the process can get derailed.

It all depends on how you structure your design department, and what metrics you use to hold them accountable.

In this episode, Chris Landis discusses about how to build and run an efficient design department with Victoria and Mark.

Chris is a partner (with his brother Ethan) in Landis Architects/Builders in Washington, DC, and is a longtime Roundtables member. He’s a registered architect in four states (MD, DC, VA, NY). Chris graduated from Vassar College, and earned his M.A. in architecture from Columbia Architecture School. Chris is a member of the American Institute of Architects, and has 28 years of experience in residential architecture. He is a current member of the DC Historic Preservation Review Board and past president of the DC Metro area chapter of NARI.

Chris has a design department of nine people after 30 years in the business. When the company got to the point of having three designers, Chris hired a manager for that department to ensure that the work was standardized and high quality. He talks about how to set up your own design department for success and create a quicker process, including:

  • The metrics to gauge success
  • The designer’s role in his company
  • Recruiting and hiring for the department
  • Working back from net profit
  • When to hire a design manager
  • His three-phase process
  • How he charges for them
  • Figuring out a healthy close ratio
  • Taking on a design-only project
  • Why to conduct a feasibility study — sometimes
  • Working with design sub-contractors
  • And more …

Design can be a profit center, not a loss-leader, and you have to know how much you should be charging for it — even if you don’t.

MasterClass: Design Process

You can learn how other successful companies manage their design business, and you’ll go home with new ideas to exceed your clients’ expectations and boosting profits on every job. We’ll be holding our next class here in Baltimore, May 18-19. You can find more details and register here: Building An Effective Design Process.

Ep.96: Tiered Growth: Understanding Metrics and Recognizing Signs to Set Profitable Sales Goals with Michael Hodgin

Most people would consider a company jumping from $1.5 million to $3 million in revenue a growing organization. However, when we look beyond gross sales, those numbers don’t necessarily mean it grew. It could even mean the company is less profitable — and ultimately less successful — than it was before. 

Michael Hodgin says planning for, and implementing, tiered advances are a better strategy for deliberate, healthy growth.

In this episode, Michael discusses his tiered increase growth strategy with Victoria and Mark. For healthy growth, he says you have to set and meet certain goals for sales, job costs, systems and performance before taking the next step.

Michael is a general contractor and business consultant living in the Rogue Valley of Southern Oregon. He started his first construction company as a one-man-show in 2000, eventually growing Coleman Creek Construction to include a successful team of 15. Michael joined Remodeler’s Advantage in 2016 in an effort to deliver the greatest possible value to his clients. Investing in the development of efficient systems for his own business inspired the creation of his consulting agency, Maestro’s Toolbox

Micheal says that your company’s gross sales should bump up to the next milestone only once your teams have mastered sales, pre-construction, and production systems at their current revenue level. That puts a company in a stronger position to handle the inevitable increase in workload. He talks about how to accomplish healthy, tiered growth for you remodeling company, including:

  • The infrastructure milestones to hit
  • Taking deliberate steps
  • The importance of setting goals 
  • Focusing on hitting those goals
  • Proving your success 
  • Nailing down all your job costs
  • Managing slippage
  • Building the foundation for growth
  • The metrics that tell you that you’re ready for the next step
  • Stepping away and delegating
  • And more …

Planning your growth, setting targets, and understanding why and how you hit them will spur the right kind of growth for you and your company.

EP.91: [Unscripted Back-up] Expert Panel at Extreme Business Makeover Shares Insight

As we wrap up 2019, we’re looking back at some of our more popular episodes and this one was a huge hit.

For our 50th episode in January, we gathered a panel of industry experts and took questions from the audience at the Extreme Business Makeover event. 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 directed the lively discussions with our panel. Panelists included:

  • Michael Sauri of TriVistaUSA Design + Build and the 2018 winner of the Fred Case Remodeling Entrepreneur of the Year Award.
  • Doug Howard, RA’s CFO and Director of Consulting Services, a.k.a. “The Fixer”
  • Judith Miller, Financial and QuickBooks “Guru”
  • Tim Faller, RA’s Senior Consultant and “Master of Production”

We covered 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 back in January, you need to listen to this episode.

And Don’t Miss THIS Year’s Extreme Business Makeover Event;
New Content, Fresh Ideas

On January 28-29, 2020 we will gather once again at the BWI Westin and present 2 days of interactive presentations, breakouts and expert panels (like the one featured in today’s podcast). We have Super Early Bird pricing in place until 12/15/19 so Click here for more information and Register Today!

Ep.82: What Can Be Learned from Success with Wayne Rivers

We’re just back from the 2019 Remodelers Excellence Week, Remodelers Summit, and Roundtables meetings, and our opening video was about thinking like a child, and allowing yourself to fail so that you can learn from what went wrong. It’s all a part of evolving as a business, as a person, and the art of growth.

Then we came across the latest video blog from our friend Wayne Rivers.

It dovetailed nicely with our main takeaways, while also turning the concept of learning from failure on its head. It’s devoted to learning from your successes, and then building on them.

So in this episode, we’re picking up the audio of his blog. If you’d like to watch the video, you can find it here.

Wayne is the co-founder and president of The Family Business Institute Inc. He has authored four books on the subject of family businesses, and is part of the peer group Victoria and Mark attend. Wayne has appeared on the Today Show, CNN, MSNBC, CNBC, BusinessWeek: WEEKEND, and on the Retirement Living Network.

Wayne talks about how overlooked, yet powerful, success can be as a teaching tool. Instead of always concentrating on what didn’t go right, he tells you how to learn from the good, including:

  • What you can learn from the Blue Angels
  • Why to focus on the process more than the outcome
  • Conducting a post-mortem on every project, good and bad
  • Analyze for successes and failures
  • Realizing that success is almost always a team effort
  • Why to benchmark in every department and process
  • Getting an outside perspective and objective opinion
  • And more …

There are opportunities for learning and improving everywhere — you have to look for them and then build on them.

Click here to take a look at our Summit kick-off video.

Ep.77: Recession-Proofing Your Company with Dave Edwards

It’s easy to be successful in a great economy. You can get away with a lot of bad habits, lack of systems, and high overhead when jobs are large and margins high. But when the economy contracts, job sizes shrink, and margins erode, those bad habits can have a huge affect on the health of your company.

Focusing on the right things when times are good are key to recession-proofing your business.

In this episode, Dave Edwards talks to Victoria and Mark about the lessons he learned and the changes he made to create a healthy company following the last recession, and how that positions it to survive and even thrive in the next downturn.

Dave is the founder and president of Earth Bound Homes, a home-building and remodeling company in San Jose, CA. Before he joined Remodelers Advantage Roundtables in 2014, Dave spent 12 years learning all the different ways to not build and run a profitable construction company. 

His path to recession-proofing his company came after watching other remodelers and builders go out of business in the last recession. After his company almost went bankrupt in 2011, he joined Roundtables and also went to counseling. He talks about his path to success in business and in his personal life, and how he has built a company that can withstand an economic downturn, including:

  • Focusing on others’ happiness as the key to achievement
  • His metrics for success — it’s not all about money
  • Recognizing when someone else has better ideas, and running with them
  • The Stop/Start meeting to improve the company
  • How to bill like a lawyer
  • Making project management a source of income
  • Working with a tight subcontractor market who need extra management
  • Helping architects get their project packages together
  • Identifying bad habits and how to fix them
  • How unbilled labor can cut into your profits
  • Why he cut his field staff to boost his revenue
  • Getting the best people and keeping them happy
  • The power of diversity in company culture
  • And more …

Dave says the three big ways to ensuring your company’s survival are figuring out how to live on your salary as a business owner, banking your cash to be able to pay and retain your team during a downturn, and reducing your mark up to still be profitable.

Ep.76: [Unscripted Back-Up] Managing Your Customers with Chip Doyle

It’s time for another Unscripted Back-Up. It’s a chance to revisit some of our best and most informative episodes. They’re jam-packed with information you can use — so if you missed it the first time around, here’s your chance to catch up.

This is one of our most popular episodes, and digs in to a part of your remodeling business that few people really consider — managing your clients. 

If you — and especially your designers — aren’t managing those customers you’re wasting time and losing out on potential profits, says Chip Doyle.

In this episode, Victoria, Mark and Chip discuss how to speed up the hand off from design to production. Effectively managing client expectations, setting clear goals and deadlines, and guiding clients intentionally, gets you out of having projects park in design and selections. 

Chip has been in the sales industry for 29 years, and training with Sandler for nearly 17 years. He’s a sought-after speaker and co-authored Selling to Homeowners The Sandler Way. Chip has a licensed training center and trains companies of all sizes in Pleasant Hill, CA, helping them reach their full potential, exceed expectations and continue to grow.

Empowering designers to guide, and ultimately lead, clients through the design process can increase your profits by 25 percent. Some of the ways to get there include:

  • Cutting design time in half, without cutting corners
  • Giving designers the right role models
  • Managing “genius attacks”
  • Setting clear meeting goals and timely next steps
  • The importance of deadlines — for clients
  • Getting projects through that would otherwise stall
  • The traits to look for in a designer — toss the DISC assessment
  • And much more …

Need More Help?

If your designers, project managers, and other customer-facing team members need guidance on how to deliver excellent client services effectively, Chip is leading a course, Client Management Training for Designers & Architects, to address it all. It’s not a sales course, it’s specifically designed to give your team members the skills they need to get selections and designs past the bottleneck and into production, while creating and excellent customer experience.

Ep.69: How to Protect and Grow your Business with Performance Testing with Corbett Lunsford

Physics and chemistry affect the interior of every home, every day. Performance testing can enable remodelers to predict and prevent health, safety, and comfort issues, earn more for your work, and predict and prevent callbacks, claims, and lawsuits.

As a remodeler, you have two choices. You can test for and design performance controls into your projects to predict and prevent side effects. Or you make assumptions and hope for the best.

You might make problems worse, and take the heat for it. 

In this episode, Corbett Lunsford talks about home systems, performance, and testing with Victoria and Mark. Home performance is the invisible “stuff” that happens inside a home — how it feels, smells, and sounds. 

Corbett loves investigating invisible dynamics using high-tech techniques and tools. He’s the co-host of the PBS series Home Diagnosis, the Building Performance Podcast, and the author of Home Performance Diagnostics: the Guide to Advanced Testing.

Every remodeling project will affect how a home works — for better or worse. Building inspections are about the static state — what’s there all the time. Performance dynamics have to do with all the actions of the house while it’s working. You need testing to be able to predict that. Remodelers deal with and interfere with these dynamics as part of their work — there will be changes. Corbett says the first tests to do are a blower-door test, using infrared cameras to pinpoint roof leaks and moisture detection, and other reasons why home testing can improve your projects, business and client satisfaction, including:

  • Tuning a home like an instrument
  • Taking the guesswork out of the home performance
  • How pressure issues can cause mold and mildew
  • Why home interiors affect health
  • Atmospheric draft, water heaters, and range hoods
  • Charging more for optimizing home system performance
  • Testing for the invisible dynamics
  • Load calculations and energy models for HVAC choices
  • Why testing also makes homes more energy efficient
  • The marketing opportunities for you
  • The power of statistics
  • And more …

Corbett warns that your clients may know about the importance of performance testing because they’re watching home-improvement shows like his — and you have to stay ahead of what the general public knows or lose credibility. As a first step, you can download his ebook, Proof Is Possible: How to Keep an Eye on Your New Home Construction or Home Improvement

You can also see his tiny house and more on his YouTube channel: https://YouTube.com/c/HomePerformance.

Ep.67: Kicking Off Slippage Awareness Month with Tim Faller

Here at Remodelers Advantage we set aside the month of June to focus on an issue that plagues most service-based businesses, but can be a critical metric in looking at the success of a remodeling firm. This is our third annyal “Slippage Awareness Month” and this year you’ll see content submissions from our consulting, sales, and production experts here at R/A. Enjoy!

Every remodeling business owner wants to add more money to the bottom line. Reducing slippage is the lowest-hanging fruit to pick in your quest.

In this episode, Tim Faller talks to Victoria and Mark about reducing slippage in your remodeling company. Slippage occurs when your estimate is lower than the real costs of the job. Reducing it takes a change in mindset throughout the organization.

For 17 years, Tim has worked with hundreds of remodeling companies to improve profits by creating smooth, efficient production systems. As a Senior Consultant and Master of Production for Remodelers Advantage, Tim’s field and business ownership experience is vital to his additional role as facilitator for Owner and Production Manager Roundtables Groups. He’s also  a published author and popular industry speaker, Tim is co-host of The Tim Faller Show, a weekly podcast focused on “Improving The Bottom Line Through Production Training.”

The biggest challenge in reducing slippage is getting your whole team involved in the effort. Tim says slippage is too often brushed off with “It is what it is.”  That’s where the change in mindset comes in — the attitude should be “It is what we make it.” Slippage is controllable, but it takes a company-wide awareness and work to corral it through realistic and accurate estimating,  job scheduling, and building in time to de-bug a job before it starts. He talks about the ways to reduce slippage in your processes, including:

  • Finding the slippage
  • The perfect planning process
  • Building in time, and how much
  • Developing a critical eye, not a critical attitude
  • Why realistic estimating geared to your team is key
  • Why you need long-term, short-range, and daily planning
  • Killing schedule creep for better net profit
  • Building extra time into the schedule
  • Figuring out days-per-job overhead
  • Controlling the client
  • Doing change orders properly
  • And more …

Cutting slippage is possible — and will make a big difference in the health of your business.

 

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