As the old saying goes, when you’re up to your butt in alligators, it’s hard to remember that the objective is to drain the swamp. Likewise, it’s easy to get caught up in the current crisis and lose sight of the big picture of running your kitchen and bath firm.
It’s important to allocate some of your time to each of three different areas: your history, the present and the future. While it’s easy to get caught up in focusing on the present, you should set aside some time each week to focus on the other two areas that usually get put off while we deal with the pressing matters that present themselves to us each day.
Reviewing the Past
For kitchen and bath dealers and designers to be successful, they need to be careful not to repeat the mistakes of the past. Obviously, much can be learned by looking into the results and experiences that we’ve had with our businesses. We do this in several ways, one being the simple act of thinking about and discussing with the staff which projects have gone well and which have had problems.
Analyzing what caused things to go as planned and why plans fell apart will give you and your staff a feel for how to approach projects and client relations in the future.
Your financial records and reports are another area that provides solid information about the success or failure of projects and the overall trajectory of the business. This reporting should include a job-costing system that allows you to determine which jobs are profitable and evidence of any problem areas.
This job costing should provide a “feedback loop” for the person(s) responsible for estimating. This can be accomplished by having that person review the job cost reports each month, comparing the accumulated cost to the budgeted amounts. Another valuable practice is to have your estimators review and approve billings in order to establish knowledge of current costs for labor and materials that will go into future projects.
Past clients are also a valuable source for gaining a sense of how your business is doing and what the perception of your business is in the public eye. Former clients are critical to building your brand and providing both repeat business and referrals. For that reason, it’s a good idea to follow up with these clients with either a questionnaire or a personal interview to gauge what their view is of their experience with your company. Make sure you share this feedback (good and bad) with your employees and sub-contractors.
Consider developing a written history of your company. This is important to nurture the good will and traditions of your business and its reputation. It’s important for your employees and clients to know how your business has evolved and the lengths to which it has gone to satisfy customers and take care of its employees.
Anticipate the Future
If you’re like most small business owners, you find yourself facing a never ending series of questions and crises that must be dealt with immediately. It’s easy in this situation to put off that cash flow projection or staffing question until tomorrow. All too often, though, that process is repeated tomorrow and that promise to look ahead at the issues that aren’t quite as urgent just does not happen until they turn into this day’s crisis.
A good practice is to actually schedule a specific time each week, perhaps away from your office, to try to look ahead at those events, problems or issues that may be weeks or months in the future. Remember that doing something regularly a few times can become a habit!
Another area where anticipating is important is at the project level. Planning should really begin during the design phase of working with a client, making sure decisions are made and products are specified early on. Materials can then be ordered and a time line prepared for the work to be done. This, in turn, will allow subcontractors to be scheduled and conflicts avoided with other projects.
Being able to continuously look ahead is one of the most critical abilities that a project manager possesses. Too many project managers (and not just those in our business) simply fail to anticipate what is going to happen and turn themselves into “fire fighters,” never quite getting ahead of events. It’s necessary to focus on each job every day and worry about what’s going to be happening with that project tomorrow, next week and next month. If problems have arisen or unexpected complications are encountered, they must be dealt with immediately.
You, as a business manager, must be looking further ahead, making sure that the big picture issues are not ignored. Some of the issues that should be on this agenda include marketing, financial planning, personnel and equipment.
Marketing in the remodeling business is one of the grayest areas with which we have to deal. For the most part, the time horizon we’re dealing with is several months to years in the future. A remodeling project is not an impulse purchase, so marketing should be targeted at keeping your firm’s name in the public’s mind.
Thinking about what can be done to develop brand awareness of your business is a worthwhile investment of your time. Developing a plan to encourage former clients as a referral base is another important aspect of any marketing plan.
While all of this planning is important, it could all prove worthless without a clear, well-thought-out financial plan. It is critical to be able to project what payments must be made and what revenue is coming in to cover them. Knowing how cash flow will play out over the coming months allows you to time equipment purchases, delay discretionary purchases when necessary and/or arrange for bank financing if needed without having to go into “crisis” mode.
Don’t Ignore the Present
Financial monitoring is something that’s easy to put off, but paying attention to income statements, job cost results and cash flow projections is absolutely essential. Make sure that your accounting system provides you with all of this information on a timely basis.
Pay attention to your “gut” when it comes to what’s happening with your clients, your employees and your sub-contractors. If you’ve been in business through a business cycle or two, you will develop a sense for how things are going. If you are getting calls from upset clients or your employee morale seems to be off, don’t ignore it.
Worrying is an important part of managing a business. Make sure you employ this tactic to its fullest.