Operating a kitchen and bath design firm is hard work and time-consuming, particularly in these challenging economic times. There are so many details to manage and communicate – in lead development, estimating projects, developing specifications and contracts, ordering product, scheduling work, invoicing clients and job costing, just to name a few of the necessary processes. If these are done poorly, you lose profit – sometimes, a lot of profit.
Now imagine for a moment if there was one comprehensive, automated management system available that was specifically tailored to our industry. A system where you would only have to enter client data once and have it automatically integrate with other functional processes. A system that could be accessed by staff people from any location – home, job site or the beach. A system that integrated well with your Quickbooks accounting software.
And a system that was easy to learn, with responsive technical support. With these appealing features, an investment in such an automated management system would yield the following major benefits.
- Enhanced Control & Visibility of Operation. One of the most difficult tasks in running any operation is having accurate information at hand to make the best business decisions. The key is utilizing an automated system that minimizes possible user error while maximizing the stream of data being collected. This mainly boils down to two critical elements: simplicity and validation.
Simple systems follow logical paths already familiar to staff in their day-to-day activities. When you provide comprehensive tools that are simple, your staff more readily embraces these tools.
“Validation” means your system has some intelligence to know what kind of data is supposed to be entered and where. By implementing a management system designed specifically for our industry, the validation can be quite complex, providing significantly more accurate data. Dropdown menus in many cases can be used to give the user a choice rather than free reign. This ensures your entire team is entering and comparing data in an ‘apples to apples’ scenario. You can make one change to your Lead Sources and know everyone is working with the same list, and not using outdated sources.
Implementing a system that provides a simple interface that guides the user using workflows familiar to our industry, and providing validation of data as it is entered, is your first step toward clear visibility of your business operations. The resulting benefits are endless. For example, knowing how a staff member is performing compared to your best performers. Or easily determining where your leads are coming from, how much they are costing you and what the average sale and closing percentages are per source. Or having a clear view of which months going forward the value of substantially completed jobs will exceed your firm’s break-even point.
- Increased Efficiencies & Staff Productivity. Efficiency, although always critically important, is put under a magnifying glass in economically trying times like today. The most costly part of our business is payroll. Providing the right tools for your team to automate redundant tasks, give easy, quick access to information (visibility) and allow remote accessibility can help you get the most productivity out of your staff.
There are hundreds of redundant tasks your staff members perform on a daily basis that eat up valuable time. The right management system can automate many of these tasks, freeing up your staff to work on items that demand human interaction and generate increased revenue. Sometimes, automating these tasks can completely eliminate human error altogether. Automating certain systems can also allow you to do much more than what a typical employee could get done in a day. An efficient management system can also be configured to automatically keep in touch with all of your customers, or can help create new clients by communicating with your prospects.
How much time in your company is wasted due to not having the information you need at the time you need it? How much gas is wasted when additional appointments are required because what you needed was back at the office? How many opportunities could you have won over if you had everything your company has to offer with you at all times? A good Web-based management system will allow you to create estimates and contracts in a client’s home, provide instant access to prior projects to show “Before and After Photos” and even create targeted reference lists on the spot.
In today’s tough economy, it is all about running “lean and mean.” There are only so many cuts you can make to your staff and still perform the services your clients require. The right automated management system will help you get the most out of your staff and time, as well as identify flaws in your process that rob you of significant profit.
- Improved Staff Accountability. The most successful companies in this industry are those that have mastered the art of creating a sense of family, where each staff member treats your company as if it’s their own. The only way to grow your company is to delegate projects and tasks to competent staff members. By implementing a management system that tracks all aspects of your business, you can provide your staff with a clear picture of their responsibilities and be able to track who is, and who is not, meeting those responsibilities. With increased accountability comes increased pride in their work, as your staff will recognize good work.
One example of how a management system can help with accountability would be “Appointment Resulting,” which forces each salesperson to provide information as to what is happening with your precious leads. Another is “Communication Logging/Tracking” to ensure your employees are corresponding with customers in a timely fashion and important calls do not slip through the cracks. According to Consumer Affairs, the biggest complaint between homeowners and contractors is a lack of communication.
Of course, “Job Costing” is probably the biggest example of accountability when driven by a comprehensive management system. You can easily view errors, slippage and miscalculations. But even your fanciest Excel worksheets won’t give you the information as accurately and as fast as you could use it. That’s because they are still only as good as the data that’s being entered into them, and the access that person has to it. By implementing a full management system, your application has all of the data, from all of your staff, regarding every aspect of your business. As a result, the automated management system presents you with a clearer picture of how your business is operating.
- Increased Profitability. Profitability is certainly the key ingredient for any successful firm. Retained earnings furnish the capital to finance growth or survive a recession like this one. It doesn’t take much to understand that if you are losing money on your jobs, increasing volume is not going to make it up. Handsome profits are not stumbled upon; they are highly calculated by solid planning. Your markup over job cost must involve all aspects of your business, and must be fluid as things change.
A full management system should combine data and knowledge from all departments, so you really know the correct markup to cover overhead and desired net profit. Your prospects and clients will notice your superior professionalism and be more inclined to purchase your services at the prices you deliver to them.
However, we all know the money is made in sales and lost in production. The key to any management system is to squeeze as much juice out of that orange as you can. The right tools contain the arsenal your sales personnel need to get the most for your projects, while providing the functions your production team needs to get that project in as much under budget as possible – without compromising quality. Of course, this approach creates increased accountability. The right management system can help you incentivize your staff, so profitability also becomes their main concern.
- Greater Business Value. Most kitchen/bath dealers I know are striving for a comfortable exit when they decide to retire from the business. Indeed, a premium price for your business is by far the most overlooked benefit in regards to automated management systems. Yet it can make the single, biggest impact on your sunset years. A prospective buyer of your company wants to know there is still going to be a profitable company in place after you leave. A proper management system contains the flow and structure that allows your business to be marketable, because the vital data that is required to operate it is not stuck in somebody’s head.
After all the years of the hard work you put into building your business, do you want to sell your phone numbers, or would you rather sell a profitable business? It’s no secret which one will get a much larger multiple of earnings than the other. A savvy buyer is going to want to see that there’s something substantial behind the product you sell and your past clients. In this context, product alone is hardly a way to differentiate your company. And past clients only show that, when you operated the business, they were the result.
An automated management system can create a scalable and replicable product in your workplace and out in the field. It will have a clear flow and visibility of how your business operates. It represents a comprehensive tool that allows the new owner to easily add staff as the business grows, and makes staff more accountable and efficient. Having standardized and automated business systems will significantly reduce unproductive time with new hires. These benefits are incredibly important to any potential buyer of your company, particularly a white-collar executive from outside the industry with financing capability in place. Indeed, this can be a major contributing factor in determining your company’s value.
Is such a management system available today? After months of concerted research on behalf of my group’s needs, I have happily identified the most comprehensive management software that (1) is tailored closely to the kitchen/bath field and (2) has proven to me that it delivers these top five benefits, If you want to experience first-hand the potential value of this software, please drop me a line and I will refer you to the appropriate party to arrange a demonstration.