CLARITY on the Expected vs. Actual Gross Profit Of Your Remodeling Projects

I recorded a screen share with my client, Nancy – it’s showing the steps that she takes in QuickBooks to have CLARITY on the Expected vs. Actual Gross Profit on the remodeling projects she’s doing.

When you put a proposal together for that kitchen remodel – you should clearly know how much Gross Profit (which is Selling Price – Materials/Sub-Contractors/Labor)

The expected Gross Profit should be clear.

And when you complete the job you should be able to clearly see the ACTUAL Gross Profit you made on the job.

Nancy sets this up in a clear and nice way in QuickBooks. It’s certainly not the only way to do this, but my hope is that there’s something in the video that you can grab and learn from that will help you bring clarity to your job costing.

Are you currently clear with your expected vs. actual gross profit or is this an area for you to work on? Would love to hear in the comments below.

 

Struggling with Scheduling Your Remodeling Projects?

A couple months back, Peter was sharing with his Remodelers Circle Mastermind Group how he goes about scheduling his remodeling projects using Team Gnatt. Several folks in the group found it helpful (including one fellow Circle member who has since implemented it with solid success!)

Peter and I hopped on a screen share a little while back to go over how he uses it – you can see it in the VIDEO. I hope you find it helpful and it gives you ideas on how to improve your scheduling.

In addition, Shawn did a great webinar on this topic (and using Team Gnatt) that you can find here.

 

This is your business

Home Remodeling: The most complex small business to own and operate?

I’ve been thinking about this over the last couple months.

Is a home remodeling business the most complex small business to own and operate?

  • Ever changing rules, regulations, and inspectors to deal with
  • Ongoing training and certifications to keep on top of
  • Keeping employees productive, trained, and happy. Always planning on who you need to hire/let go of next
  • Managing the relationships with your group of sub-contractors
  • Effectively marketing your business to generate a flow of quality leads
  • Having an effective and streamlined design and estimating process
  • Managing your sales pipeline and follow-up
  • Continuing to improve and work on a strong sales process from start to finish
  • The pressure of signing work and selling it at a solid markup while competing against a host of competition
  • Running job cost reports and then evaluating performance, and making adjustments
  • Understanding and consistently reviewing your Profit & Loss Statement
  • Managing risk – having the proper insurance
  • Managing cash flow, accounts payable and receivable
  • Being a leader. Setting the vision for the business. Setting annual goals and managing your overall business plan
  • The need to keep an eye on new products and ways of doing things more effectively
  • The need to buy tools/equipment and the tug of war on what to invest and not invest in
  • The hard work it takes to deliver a high-quality finished project on-time and on-budget
  • Oh, and you’re also in people’s homes – tearing them apart and putting them back together. It takes time, patience, and effort to manage the relationship and expectations of your clients

You’re running a very complex business.

More complex than your buddy who is a financial advisor, insurance agent, realtor, car salesman, lawyer, dentist, chiropractor, engineer? Yes. I think so.

Here’s the key to taming this beast:

You can’t effectively do it all on your own. You need to surround yourself with a team of people who can help.

Perhaps I (Kyle) can be part of your team to provide guidance, insight, accountability, and systems.

Please contact me if you’d like to get to know each other a bit more and discuss how I can help you.

—–

P.S. If you haven’t read my recent article in Remodeling Magazine you can read it here: To Make a Marketing Difference, Focus Less on What to Do and More on Doing It

The article was just posted on Remodeling Magazine’s website. I’d appreciate it if you could leave a comment on there with ONE item from the table that you are going to take action on and implement.

He was working long hours and making limited progress

blog post 3He was going crazy chasing every lead and never had enough time. He pulled out a blank sheet of paper when a new lead came in and didn’t have any formal process that he would take a new lead through. He wasn’t organized and didn’t differentiate himself from any other remodeler.

His sales pipeline was organized in his brain vs. in any type of reliable system. A lot of his time was spent trying to remember what he needed to get done and who he was supposed to follow-up with. This lack of a system resulted in a lot of leads falling through the cracks.

Two years after he finished a job for a client – if you asked that client, “Have you heard from them since your project has been completed?” Their answer was, “No. Not at all.” He wasn’t doing anything to stay-in-touch with his previous clients. This resulted in less repeat and referral work for his business.

All of this impacted his attitude. He was wore out. Didn’t feel like he was making progress in his business. Was always worried he was forgetting to get back to someone. Was usually behind on turning around leads, which hurt his close rate. All of that affected his cash flow and overall profit in the business.

When you are feeling overwhelmed and behind in your business – that affects life at home with the family and the precious (and in his case – limited) time outside of work.

He was working long hours and was making limited progress in really building a remodeling business that was systematic, organized, and driven by proven and solid processes.

In his case (and perhaps yours ) – he spent years trying to solve these problems himself with different forms or off-the-shelf software products.

There were other times he was so overwhelmed that he would just ‘bury his head in the sand’ and ignore the problems – hoping they’d go away.

After years and years – the problems above were still there and he didn’t have them solved.

He had a lot of leads coming in the door, because he did good and quality remodeling work for his clients. He had a good reputation.

What he didn’t have were any tools to help him quality leads, a clear and powerful sales process to follow, reporting to help him know what was working/not working – he was just flying by the seat of his pants without a clear plan/direction.

In the remodeling business – production is king. Doing a great job on that kitchen or bathroom remodel and getting it done in a profitable way is the most important thing…

BUT – if production is going well, yet you’re chasing every lead that is coming in, always struggling to get estimates completed, feeling behind, have a low close rate, and aren’t organized with your marketing efforts – you can be miserable and overwhelmed.

That’s what he was feeling.

Then he reached out to Kyle and signed up for some personalized coaching and his Remodelers AutoPilot program. Things quickly started to turn around for him.

If you nodded your head through everything above, let’s talk.