marketing calculated with a target profit
margin? If not, your prices are likely lower
than they should be.
¡ Installation capacity: You are selling more
jobs and your backlog has grown, but so
have customer complaints due to delays
and perhaps slipshod workmanship. Are
you properly ramping up your operations
to match the revenue growth?
¡ Slower cash flow: is relates to installation
capacity. If it takes you longer to get jobs
complete, delays in invoicing and payment
will arise as well.
GROWTH CAN be fool's gold. Profitable
growth is hard-won, requiring careful plan-
ning and execution. If it were easy, everyone
would do it.
I recall being somewhat surprised last fall,
at the time, when Washington, D.C.-based re-
modeler David Merrick, CR, said he planned
to deliberately reduce his top line in 2017.
His goal is to take home the same amount
with less risk and less time spent on it. Makes
sense to me.
At Qualified Remodeler, we celebrate revenue
growth via our annual Top 500 list, which
will be published in August. Most Top 500
companies are managed well enough to ensure
that more revenue means greater profit, but
there are exceptions to the rule.
My hope is that you and your business
partners, as you enjoy the fullness of a robust
remodeling market in 2017, take the time to
ensure the extra profits you deserve.
|
ver go to an industry conference
or meeting and come back with so
many notes and ideas that it takes
several days afterward to fully pro-
cess them? Better question: How about all the
side conversations you had with speakers and
industry friends when you were there? Do you
have a way to process those, or do you hope
they just stick with you?
I ask because I keep going back to conversa-
tions I had with company owners and industry
experts at our Top 500 Live conference held
earlier this spring. So much of the conversa-
tion was about revenue growth. And this is as
it should be. But there was also a consistent
undercurrent of how best to achieve profitable
growth. What is the point of driving revenue if
less of it is falling to the bottom line? Millions
are being put at risk each month to operate
your businesses, so at what point does it make
sense to simply close up shop, take the invest-
able revenue, and invest it in equities or other,
more liquid assets with less risk? Kind of gets
you thinking, or at least it should?
IN AN ARTICLE published in our April issue,
consultant Brian Smith of Dave Yoho Associates
put it this way: "Too many companies put en-
tirely too much emphasis on top-line growth and
not enough emphasis on bottom-line growth."
e article, "Was 2016 Really the Great
Year that Might Have Been?" can be found
on our website and offers a list of signs that
your growth might be hurting you.
¡ Marketing: You spent more on marketing
and drove more leads, but your cost-per-lead
rose and your conversion rate dropped.
¡ Price: Are all of your expenses fully load-
ed with every expense related to sales and
Chasing
Revenue Can
Cost You
E
6 May 2017 QR QualifiedRemodeler.com
EDITORIAL DIRECTOR'S NOTE
Patrick L. O'Toole
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