Get Rich Slow Scheme

In my first column for Qualified Remodeler in 2005, I referred to the remodeling business as a great get rich slow scheme. If 41 years (in my case) isn’t slow enough for you, I can’t help it. I want to talk about what it takes to implement a get rich slow scheme: how to start, grow, survive and finish at or higher than your target. It is much easier to talk about it than to make it happen, but what’s new about that? The truth is it can happen.

Remodeling as a business is easy to get into because it takes almost no risk capital. Of course that means there will be plenty of competition, as well. At times we have all complained about shoddy operators but frankly they can be an advantage to you by comparison. They are the bottom of the barrel and you should be at or at least on your way to the top of that same barrel.

The Parts

I like to separate the business into five parts: market definition and development; business planning, structure and execution; design, estimating and product development; field supervision; and product delivery and customer relations. I don’t believe you can leave any one of these parts out and wind up well off financially. Let’s take the steps apart and see if you agree.

Market definition identifies a need for you to fill. Once you have verified the need exists and has some longevity, you need to develop it so you can create a dominant position on which to build your company’s goodwill. It’s bound to be a struggle at first but once you reach critical mass, market-share maintenance will still be developing but at an easier pace. You have to check the definition of your market and adjust as the market changes; with care, you can be the agent of change rather than a follower.

Business planning, structure and execution sound easy, and they are unless you put them off as many good folks do. Nothing dilutes success more quickly than being in a hurry. The business plan is no different than an estimate; you wouldn’t start a construction job without plans and an estimate, and you shouldn’t begin a business period without a business plan. The here-and-now part of the business plan gives you a measuring stick of how things are going in the near term; the plan is updated and you prove how closely to the plan you can execute. The get rich slow part is a bigger, far-off bull’s-eye you check periodically. You can get to that bull’s-eye several ways, including through diversification, integration and flexibility, which can help enable that long-term goal. The important part of it is the small stuff. Don’t ever let anyone convince you the small stuff isn’t important. My wife was an airport executive, and her favorite saying was, “Sweat the details, and the big things will take care of themselves.” As you become better known in your market, your long-range goals will come into focus more easily because your future is more dependable. Inasmuch as you will need some kind of office or shop, buy or build one with additional space to rent to help defray mortgage payments. Own the building personally and lease it to your company. This will provide you with an income when you retire. The business has the same advantages of writing off the rent, and you can depreciate the building.

Design, estimating and product development speak for themselves. A general-purpose remodeling company probably should be a designer to facilitate the estimating and building process. As a design center, you control the client, creating realistic expectations from the start. It also provides the opportunity to determine you can’t satisfy the client so you can exit stage right. As much as we define and develop our market, we have to do the same for our product. Our product is much more than the sticks, shingles, cabinets and carpet. Our properly developed product is a system of which those parts are components. We then market the system.