Today on Episode 42 of Remodeling Business Blueprint, David and Randall talk about some of the things you should review at the end of each year in your sales, production and marketing efforts. These metrics are priceless. They will simplify your budgeting and planning for the next year, and bring you real peace of mind.
Here’s an overview of the episode:
What should you review at the end of the year?
- Profitability per project type/project manager/type of client/season of the year/salesperson/designer and more
- Amount of gross revenue per project manager and per lead carpenter
- Gross profit per project manager and per lead carpenter
- What is your closing ratio?
- Has it improved this year? Gotten worse?
- How much is each salesperson selling, in gross revenue?
- What are the profit margin averages per salesperson?
- What is the customer satisfaction per salesperson? Use post-project surveys to find out.
- Can you improve your design process?
- Can you make it a profit center?
- Should you increase your prices?
- Should you get more strict with the ownership of the designs?
- Is the Lead carpenter system working for you? Are you using it?
- Should you add a supervisor?
- Should you add more supervisors?
- Dedicate someone to picking up material
- Create rules for picking up supplies. How many people does it take to pick up a 2×4? When should they pick material up, etc.
- How is your customer service and client treatment? Can that be improved?
- Go over any incidents that occurred during projects this year. Did a client get upset? Did the field staff cause any damage that could be avoided? See if there is a pattern. Who or what caused the problem? Can this be avoided in the future? How?
- Review warranties. Can they be extended? Are they too long? What are warranties costing you per year? Can this system be improved?
- Research your safety records. Look for patterns and personnel patterns.
- Marketing Strategies:
- What has worked – what hasn’t?
- Look at cost per leads (total dollars spent on marketing divided by the number of real leads you received)
- Return on investment per type of advertising media (use the Marketing Metrics Analysis spreadsheet in Resources below)
- ROI on social media
- Should you change your social media strategy?
- What should you try next year?
- What should you change in your production processes?
- Use more subcontractors and have them supply a substantial amount of the materials needed?
- Do you need more staff?
- How much more will you have to produce to pay the extra staff?
- How will this benefit the overall mission of the company?
- How profitable were you this year?
- Study the percentage of labor, material, equipment, and subcontracted work on each job. Which type of job is most profitable? After ascertaining that, look at all the factors that seem to have contributed to the profitability.
- Do you see a pattern? Are lead carpenters working out? What type of client is the best? What type of job is the most profitable? Should you use more subcontractors? Should you have more in-house staff working on the job? Should you start bundling your services and products (upselling)?
These are some of the things you should review at the end of each year. When you spend the time to review these metrics, you will be far ahead of most other remodelers, and you can start the next year with a shout, not a whimper.
Marketing Metrics Analysis – a spreadsheet to help you analyze which advertising method is working for you (Premium Scientific Remodeling System Members only)