How Much Backlog Should Remodelers Have?

This is a question that Dennis asked that I answered live on The Remodelers Show – see the written answer below – hear me answer the question live here.

“How much backlog should we have before turning down small projects and only accepting projects that are $100,000 or more?” – Dennis

I know Dennis’s business and in normal times, that’s more the ideal project that he takes on – the bigger projects. With the pandemic, with COVID, with everything that is going on, he, like a lot of remodelers, has been a little bit more open to taking on some smaller projects. 

To answer Dennis’s question, I would say it depends on who I’m talking to. I know that some of my clients have more stomach for a shorter backlog than others. Some of my clients, if they don’t have 3+ months of backlog for their team of six people out on the field – they start to get nauseous! I have other clients that feel fine about having 5 weeks of work ahead of them.

The guy that needs 3+ months would have a very hard time understanding how the guy with 5 weeks of backlog is okay. So everyone has a little bit different stomach for how big of a backlog they want.

If you schedule out too far it can become a little bit of a sales problem where some people might not want to wait that long.

There’s a lot of different factors in play here. 

Dennis, my biggest thought for you is this: If a previous client approaches you about a small project, we are going to be much more open to taking on smaller projects and little things for them.. We want to continue to enhance and develop that relationship and trust that we have with our previous clients.. But if it’s a small project for someone we’ve never worked with before, and we’ve got a really strong backlog (which as we said means different things for different people), we might turn that down.

So my answer is that I want to know how many irons in the fire you have out there.. If you’ve got 6 things under design and development that you are feeling really good about and you’ve got two and a half months of backlog, and you think you are going to get from two and a half to four months of backlog in a hurry, my advice is different than if you said, “You know what, we’ve got two and a half months of backlog but I don’t have a lot in the hopper.” In that case, I might say to continue to push on those small projects.

So, it depends on multiple factors, but those are some things to think through.

The other thing I would encourage you to do is to really get clear with this month, next month, and the following month. We have a spreadsheet that helps you calculate your backlog. If you want a copy of that email Bailey (bailey@remodelyourmarketing.com) and ask her for it! 

Using this spreadsheet you can document all of your projects that are sold (not that you might sell) and how many labor hours you are expecting for each of those different projects. In the spreadsheet it’s got a formula that says, “Okay, based on the number of hours that you have sold and that are still remaining, and based on the number of guys you have out on your field, here’s how many weeks and months that you have as far as backlog goes.” 

When you have that and you’re clear on the amount of backlog you have, that helps you make a decision about which projects to take. 

When you’re unclear with that and you are just operating off of how you feel, not facts, then it’s a little riskier to turn things down.. But once you have the facts about your backlog, then you can make clearer and better decisions. 

If you want a copy of the backlog spreadsheet, Email Bailey at bailey@remodelyourmarketing.com and ask for the spreadsheet for the project backlog and we’ll send that over to you. 

Raise your mark-up 1% today!

I’ve been sharing some thoughts over in the Remodelers Community Facebook Group about ways to strengthen your business.

Here they are – I hope they’re helpful!

  1. Raise your mark-up 1% today! – You’ll still sell the job & it will lead to $1000’s of additional Gross Profit $’s this year. DO IT!
  2. During the sales process, always schedule your next meeting before you end the current meeting. Self-imposed deadlines!
  3. If you’re not doing it already, start charging for Design & Project Development. It’s a valuable SERVICE you’re offering!
  4. How you finish the job is more important than how you start it. Work hard to finish strong!
  5. Your previous clients are your most valuable marketing asset. Do you have a plan to stay in touch with them consistently?
  6. IF (that’s a big if) you’re not able to present your proposal in-person AT LEAST present it via Zoom. Emailing lowers close rate.
  7. Tell prospects your story and why you love what you do. Tell them about your team – how great they are. Build know, like, & trust!
  8. Get your step-by-step remodeling process in WRITING and practice presenting it to prospects. It’s really key!
  9. Be excited about their project! When you talk to a homeowner and you’re excited, that excitement is contagious.

Which one resonates the most with you? Email me at kyle@remodelyourmarketing.com and let me know!

P.S. – At 12:00PM EST – we’ll do Day 11 of The Remodelers Show! Visit TheRemodelersShow.com for more information on how to join in LIVE!

P.P.S. Have you checked out Remodelers AutoPilot yet? Try it for $1 – it will help you generate more repeat and referral work.

What our Remodelers AutoPilot clients are sending this month

We thought you’d like to see what our Remodelers AutoPilot clients are sending this month. Hopefully, this sparks some ideas on how you can reach out to your previous clients and/or helps you see the value of Remodelers AutoPilot (which you can try for $1)

We decided with everything going on this month, to give a few options to choose from:

1. Our standard email newsletter design and format.

2. Still Able to Complete Work Email – Simplified Format 

3. Focus on Smaller Projects and Handyman Work – Still Able to Complete Work – Simplified Format 

We had many folks try the shorter one, a long-time Remodelers AutoPilot client, Nancy Benson with Bencar Building Systems said:

BRILLIANT NEWSLETTER/EMAIL!

12 responses so far today.  A couple looking for work to be done; some followed up on proposals sent.

_______

Hope this is helpful to see! If you’d like to give Remodelers AutoPilot a try for $1 – sign-up here. 

P.S. You also get done-for-you social media posts each month (examples from this past month here)

Little Tax Savings

I was going through a Profit & Loss Statement with one of my clients.

[The image is a photo from the actual coaching call with Rick & Patty! Wanted this post to be as authentic as possible…]

Me: “Rick, you guys have been doing a lot of team meetings where you bring breakfast in and do training this year, right?”

Rick: “Yup! Just like you’ve been telling us to, coach!” [I added that last part – he really just said, ‘Yup!’]

Me: “Why am I not seeing hardly any expenses under this ‘Training/Employee Meetings’ line?”

Rick: “Oh, we’ve been putting all the food/drinks from those meetings under ‘Meals & Entertainment’”

We went on to discuss this:

Let’s say you spent $2000 on the food/drinks/etc. for those meetings.

Under ‘Meals & Entertainment’ – that $2000 is cut 50% – so now you have $1000 expense to deduct from your total revenue.

If it’s under ’Training/Employee Meetings’ you can deduct the full $2000 expense from your total revenue.

At a 25% tax rate – that’s an additional $250 of tax savings simply by correctly categorizing!

Note: There are some rules related to this – you need to invite all of your employees to the meeting, etc. (check with your CPA!) – BUT it’s a common little tax savings that I often see remodelers missing.

QUESTION: What are other (legitimate) little tax savings that your fellow remodelers should keep an eye out for?